DS Smith has reported a boost over 60 per cent to both its revenue and pre-tax profits in its first half results announced today (6 Dec). The group, a leading supplier of consumer goods packaging and the second largest manufacturer of corrugated products in Europe, announced a 61.6 per cent increase in revenue to £1,671.8 million, while profit before tax was up 62.5 per cent to £106.1 million.
The enhanced performance was underpinned by the £1.3 billion acquisition of SCA Packaging on 30 June, and by around 1 per cent organic growth. The integration of the two businesses has delivered £10.5 million of cost synergies and £47.9 million of cash synergies in the first half. The acquisition has also seen DS Smith reposition itself with a broader pan-European reach.
The results noted a weaker performance in paper with weaker trading conditions, and both pricing and volumes suffered due to a decline in demand and overcapacity in the market.
However, the plastic packaging business delivered "strong growth" with revenue up 13.6 per cent and operating profit up 31 per cent, and increases in underlying margins.
Group CEO Miles Roberts said, "Though markets remain challenging, we are well placed to create further significant value for our investors through the robust performance of our corrugated and plastic packaging businesses, allied to acquisition synergy benefits that are ahead of our initial expectations.”
He added, “We are developing and investing in group-wide capabilities for innovation, design, sales and marketing. With these factors working together, we are starting to see growth in customers across the enlarged business.” (6 Dec)
© 2012 - ESM: European Supermarket Magazine
