Packaging operations boost DS Smith results
office products wholesaler, has announced improved interim results
for the six months to 31 October 2002.
DS Smith, the UK-based international packaging manufacturer and office products wholesaler, has announced improved interim results for the six months to 31 October 2002.
The company said that a significant cost cutting programme had led to a 25 per cent increase in its pre tax profits. One of the main reasons for its improved margin was the careful regulation of its paper buying prices, which meant that operating margins were improved from 5.9 to 6.6 per cent. In direct relation to this the company's pre-tax profits rose from £35.1 million (€55.1m) to £43.9 million.
Although company CEO Tony Thorne announced that the results were pleasing, he also said that there was still reason for concern over certain of the company's markets. He voiced particular concern for the area of corrugated board and paper, where pricing uncertainties could lead to future fluctations.
On an operational level, the company announced that its packaging and plastics divisions were the currently the strongest areas, which was helping to maintain the momentum of the slowly improving office services division.
The company's liquid packaging and dispensing operations, including its bag-in-the-box wine containers, saw strong growth, in part driven by July's £17.5 million acquisition of German company Zewathener.
Commenting on the half year results, chairman Antony Hichens said:"Against a background of challenging market conditions, our continuing emphasis on operating improvements produced a substantial profit advance in the seasonally stronger first half of the financial year. We met our key objectives of further profit growth in packaging and the rebuilding of profitability in office products.
"We will continue to concentrate on driving operational performance across the group and improving results in office products. Demand in many of our markets remains weak and in corrugated and paper the outlook for prices is uncertain. Despite this tough market environment we are confident of making encouraging progress over the year as a whole."
Overall the company's net debt was down from £255 million to £217 million, and the refinancing of £325 million in banking facilities expiring next December was "well under way".
