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DS Smith

DS Smith says financial performance in line with its expectations but flags up uncertain economic conditions

The FTSE 100-listed firm said it has seen ongoing growth in corrugated box volumes and market share gains, driven by its resilient FMCG (fast-moving consumer goods) focused customer base

Corrugated cardboard
DS Smith pointed out that group margins are expected to progress further in the second half of its financial year ending 30 April 2019

DS Smith PLC (LON:SMDS) shares fell on Tuesday after the packaging group flagged up current economic uncertainties although it said its financial performance has continued to be in line with its expectations.

In a pre-close trading update for the year ending 30 April 2019, the FTSE 100-listed firm said it has seen ongoing growth in corrugated box volumes and market share gains, driven by its resilient FMCG (fast-moving consumer goods) focused customer base and strong position in the e-commerce packaging market.

READ: DS Smith to sell two packaging businesses in North Western France and Portugal to International Paper

The group added that all regions have been in growth, with particular strength in the UK, Italy and Poland, partially offset by some volume weakness in certain export-led markets, including Germany.

It pointed out that group margins are expected to progress further in the second half of its financial year ending 30 April 2019 and operating cashflow generation is expected to be stronger than in the comparable period last year.

The company said US business continues to perform well with strong margins and returns, while integration work on the Europac business is going well and it is very pleased with progress to date.

Miles Roberts, DS Smith’s group chief executive said: “The acquisition of Europac has significantly enhanced our European operations and the Group has also been strengthened strategically and financially by the agreed disposal of our Plastics division we announced in March.”

He added: “Notwithstanding the current economic uncertainties, this progress, together with our focus on the stable FMCG market, and enhanced cost and efficiency improvements position the business well."

The group said it will report its results for the full year to 30 April on 13 June. In late morning trading, shares in DS Smith were 2.8% lower at 362.10p.

Quick facts: DS Smith

Price: £3.30

Market: LSE
Market Cap: £4.53 billion
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