Packaging company DS Smith PLC (LON:SMDS) said on Tuesday it delivered “good” like-for-like volume growth in the year to date and is confident about the outlook as it makes progress in its strategic review of the plastics division.
In a trading update for the first quarter, the group said trading remains in line with expectations and margins have improved on lower input costs.
DS Smith announced in June that it would start a review of its plastics division amid global efforts to cut back the use of the material due to the impact it is having on the environment.
The company said progress with the review has been “positive”.
It also said Corrugated Container Corp, the US-based corrugated packaging business which it completed the acquisition of at the start of June, has been well-received by customers.
In early June, the company announced that it has agreed to buy Spanish rival Europac for €1.9bn to strengthen its position in western Europe’s fast-growing packaging market. To help fund the acquisition, the group proposed a fully underwritten rights issue to raise £1bn.
READ: DS Smith confirms launch of £1bn cash call to part fund acquisition of Spanish rival Europac
DS Smith continues to expect the deal to buy Europac to be completed in the fourth quarter.
"I am pleased with our momentum in the year to date, in a period when we also announced a significant acquisition and associated equity fundraising to expand our position in the important Iberia region," said chief executive Miles Roberts.
"The corrugated packaging industry continues to demonstrate excellent growth prospects, driven by changing shopping habits, e-commerce, and the ever-increasing relevance of sustainability. DS Smith is in a strong position, as a market leader, to capitalise on these opportunities, and the board looks to the future with confidence."
Shares rose 1.6% to 500p in morning trading.