Two months since it issued an “in-line” trading statement, DS Smith PLC (LON:SMDS) issued another, albeit with more emphasis on improved margins and cash generation.
Management said it expects the return on sales and adjusted operating profit in the half-year to be “materially ahead” of the same period of 2017 once the final numbers are totted up, following the recovery of increased input costs earlier in the year and good volume growth in the group’s fast-moving consumer goods-focused business.
READ DS Smith says trading in line with expectations with 'good' like-for-like volume growth
Meanwhile, the integration of Interstate Resources, which it acquired in May, continues to go “very well”.
Cash flow in the half-year period is expected to “significantly ahead” of the same period of last year.
"We are very pleased with the performance in the half year, in particular, the margin development, and the continued excellent progress and integration of Interstate Resources,” said Miles Roberts, the chief executive of DS Smith.
“We continue to see strong customer support to our innovative sustainable packaging, responding to the dynamic requirements of our customers. We expect good ongoing volume and market share growth, look forward to the completion of Europac and view the future with confidence," he added.
Shares in DS Smith opened 4.4% higher at 397.1p.
#DSSmith (SMDS LN) released a pre-close trading statement in which they said "The regulatory process for the proposed acquisition of #Europac (PAC SM) continues to be in line with our expectations, with completion of the acquisition expected by the end of the calendar ... 1/2
— ESHK_EventDriven (@EventDrivenESHK) November 6, 2018