DS Smith trading statement

DS Smith Plc has issued a trading update in respect of the period since 1st May 2016. The company said it has made good progress since the start of the year and performance has been in line with its expectations. Volume growth remains good, particularly from pan-European customers who continue to benefit from an increased scale and coverage, and reflecting continued investment in quality, service and innovation.

The company goes on to say that return on sales and return on average capital employed have both shown further improvement versus the comparable prior year period, reflecting the benefit of operating leverage and the strength of its business model.

“Since the start of the year, we have continued to invest organically and acquire businesses in attractive geographies and market segments, including e-commerce and display, building on the five acquisitions completed in 2015/16,” said Miles Roberts, Group Chief Executive. “The proposed acquisition of Gopaca, a well invested corrugated packaging business in Portugal, will expand our position in Iberia and complement the operations we have in this important region. The transaction, announced in June, is expected to complete during the first half of our financial year.”

He continues, “As in-store marketing spend continues to increase, we have invested significantly in display products and services. In addition to our organic investment, in June 2016 we acquired Creo, based in the south east of the UK and we recently completed the acquisition of Deku-Pack, located in Denmark. Both businesses are focussed on FMCG, retail and media markets and significantly build on our capability in this important and growing market segment.”

He concludes, “We are pleased with our start to the year and the momentum within the business, as we continue to grow organically and by acquisition. Notwithstanding the increased political and economic uncertainty within Europe, our outlook remains positive. Packaging has ever increasing relevance in a dynamic retail and consumer environment and our recent acquisitions, together with the customer and market opportunities for growth, give us confidence for the future.”

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