The paper recycling and packaging business has issued a trading update for the period from 1 May 2016, announcing that performance is ‘in line with expectations’, following five acquisitions in 2015/16 and further gains expected in 2016/17.
In June, DS Smith revealed that its total year-on-year revenue was up by 6%, with pre-tax profits also up 1% to £201 million (see letsrecycle.com story).
Volume growth remains good according to the company, particularly among its European customers who continue to benefit from ‘increased scale and coverage’. The business’ operating leverage is meanwhile reflected in the return on sales and average capital which have shown improvement on the prior financial year.
Since the start of the new financial year, DS Smith reports it has been focused on continuing to invest ‘organically’, aided by its acquisitions ‘in attractive geographies and market segments’. In its June statement, the company stated that corrugated box volumes have grown 3.1% on a like-for-like basis, with good growth in Central and Western Europe.
Portugal
Elsewhere, the firm’s proposed acquisition of Gopaca – a corrugated packaging business in Portugal – is expected to expand DS Smith’s position in Iberia and ‘complement’ operations already established in the region. Also announced in June, the acquisition is likely to be completed during the first half of the year.
As in-store marketing spend continues to increase, DS Smith has also invested significantly in display products and services, the company claims. In June the firm acquired Creo, based in the south east of the UK, as well as recently completing the acquisition of Deku-Pack, located in Denmark.
Both businesses are focussed on FMCG, retail and media markets and ‘significantly’ build on the company’s capability to service the sector.
“Our recent acquisitions, together with the customer and market opportunities for growth, give us confidence for the future”
Miles Roberts, chief executive
DS Smith
‘Pleased’
Miles Roberts, Group chief executive, said: “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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