Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Consumer goods and e-commerce boost cardboard maker DS Smith

Published 09/12/2021, 07:29
Updated 09/12/2021, 08:21
© Reuters. FILE PHOTO: The logo DS Smith is pictured inside the carboard box manufacturing company DS Smith Packaging Atlantique in La Chevroliere, near Nantes, France, April 25, 2019. REUTERS/Stephane Mahe/File Photo
SMDS
-

(Reuters) -Cardboard maker DS Smith delivered an 80% surge in first-half profit and a higher dividend on Thursday, helped by strong demand from consumer goods makers and the e-commerce market.

The London-based company, which provides packaging, paper and recycling services, has navigated pandemic-led disruptions by tapping growing demand for recyclable boxes while also benefiting from the boom in online shopping.

Pretax profit at DS Smith, whose customers include Amazon (NASDAQ:AMZN), Nestle and Unilever (LON:ULVR), rose to 175 million pounds ($231 million) in the six months ended Oct. 31, from 97 million pounds a year earlier.

"We are continuing to benefit from a very dynamic market with demand for packaging for different retail solutions evolving rapidly ... Our supply chains have remained secure and the significant increases in input costs have been mitigated," Chief Executive Miles Roberts said in a statement, referring to higher prices for, for example, logistics and paper.

DS Smith shares were up about 3% in early trading.

Results were bolstered by strong growth in vaccine-advanced markets like the United States and Southern Europe, where the company also recently invested in developing more sites to process cardboard and paper demand.

The company increased its interim dividend by 20% to 4.8 pence per share, and said it was confident about delivering a "significant improvement" in profitability during the second half of the fiscal year, in line with its expectations.

"We think the company is managing the extreme cost pressure well, and see the lack of any downgrades to expectations as a positive," JP Morgan analysts said in a note, lifting their target price on the stock by 4 pence to 588 pence.

© Reuters. FILE PHOTO: The logo DS Smith is pictured inside the carboard box manufacturing company DS Smith Packaging Atlantique in La Chevroliere, near Nantes, France, April 25, 2019. REUTERS/Stephane Mahe/File Photo

First-half revenue rose 16% to 3.36 billion pounds, with box volumes up 9.4%.

($1 = 0.7572 pounds)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.