DS Smith reports 21% rise in full-year profit driven by acquisitions

19 June 2018 (Last Updated June 19th, 2018 11:57)

Packaging company DS Smith has published a 21% rise in full-year profit for 2017/18 as a result of acquisitions and a positive currency translation effect.

Packaging company DS Smith has published a 21% rise in full-year profit for 2017/18 as a result of acquisitions and a positive currency translation effect.

The company’s group revenue jumped to £5.765bn from £4.781bn last year, while operating profit increased 14% to reach £361m.

Adjusted profit before tax surged to £473m from £391m in the previous year.

Despite high input cost caused by an increase in the prices of paper and other operating costs, the company has noted that it is gaining market share and showing strong margin performance.

“DS Smith is reporting a strong set of numbers for the full year, showing that we are continuing to succeed in a very dynamic market.”

Acquisitions made during the period include Interstate Resources in the US, and EcoPack and EcoPaper in Romania.

DS Smith group chief executive Miles Roberts said: “DS Smith is reporting a strong set of numbers for the full year, showing that we are continuing to succeed in a very dynamic market.

“Through our close customer relationships and innovation, we are capitalising on secular underlying growth trends such as the rise in e-commerce, desire for sustainable products and the evolution in consumer shopping habits.”

The company, which operate across 37 countries, has reported a hike in closing net debt to £1.68bn year-on-year due to outflows on strategic acquisitions and borrowings.

The jump in revenue has also been attributed to strong economic growth in Europe and in particular, growth in e-commerce, as well as recovery of paper prices in the region.

In a statement, DS Smith said: “Like-for-like corrugated packaging volumes in the region have been strong, with both France and Iberia gaining market share with pan-European and e-commerce customers, offsetting continued flat market conditions in Benelux.”

Earlier this month, DS Smith made a proposal to acquire Spanish packaging firm Europac for €1.9bn to strengthen its presence in Western Europe.