The company has published its full year results for 2016/17 up to the end of April 2017, in which it reports an 18% growth in revenue to £4.7 billion and a 31% increase in profit before tax to £264 million.
According to DS Smith, 2016/17 has yielded ‘particularly good growth’ from its UK business, “which has seen more benefit from e-commerce customers”, as well as growth in Central Europe and Italy.
Focusing on the UK, the company claims that its UK division has seen “strong volume growth in a competitive market environment”, which it claims is driven by success in the area of e-commerce as well as a good operating performance by its major sites.
The UK business has reported a total revenue of £962 million, posting an operating profit of £94 million, both of which are up 11% compared to 2015/16.
The company notes that this growth has been partly supported by a devaluation of sterling during the year, as well as a period of ‘volatility’ in fibre input costs – which likely includes a fluctuation in waste paper prices, a trend that has continued in recent months.
DS Smith has also announced today the agreement to acquire 80% of the share capital of Indevco Management Resources – the holding company for the Interstate Resources Group – the US-based corrugated packaging manufacturer. The venture represents DS Smith’s first business acquisition within the US market.
It is anticipated that the acquisition will be worth around $920 million (close to £722 million).
Paul Clarke, innovation, integration and development manager at DSSmith, who was previously managing director of DSSmith competitor, Smurfit Kappa Recycling UK, is expected to play a key part in the development of DS Smith’s new American operation.
Commenting on the results, Miles Roberts, DS Smith’s group chief executive, said: “We are delighted to report another year of good growth for DS Smith, delivered through a combination of acquisitions and organic development. We have expanded our customer offering during the year both geographically and through our continuous focus on innovative solutions for our customers and delivered against all our medium-term financial targets.
“This progress has continued into the new financial year. Full recovery of the recent paper price rises is progressing as well and as expected.
“Today’s announcement of our intended acquisition of Interstate Resources Inc. in the US offers a very exciting opportunity for us to grow ad support our customers’ needs over a wider geographic area.
“Although economic conditions remain uncertain, our innovation-led offering, the scale of our operations, and the momentum in the business gives us confidence in further growth and sustainable returns in the years ahead.