DS Smith H1 profit jumps, plans sale of plastics arm
Source - SMW
Packaging company DS Smith reported a 27% increase in pre-tax profit and said it was exploring opportunities for the sale of its plastics division as it remained confident about the company's future prospects.
Pre-tax profit from continuing operations, excluding its plastics arm, climbed to £162m in the six months to 31 October as it sold more boxes at higher prices.
After conducting a review of its plastics business, the company found it was an attractive asset with good prospects. The division continued to trade well, with revenues up 2%, although short-term profitability has been impacted to some extent by higher polymer prices.
Looking forward, the outlook remained positive, the company said, noting that the recovery of paper price increases was now complete.
"Our short-paper business model is robust and designed to deliver good returns throughout the paper cycle, and we have a clear trajectory to reduce net debt / EBITDA into line with our medium term target of less than or equal to 2.0x," the company said.
Further, the growth drivers for packaging, such as e-commerce, sustainable packaging and the more sophisticated requirements of customers and retailers remained, continuing the long-term trend of structural growth.
At 8:01am: (LON:SMDS) Smith DS PLC share price was -3.15p at 323.15p