DS Smith wraps up year with robust revenues as price recovery offsets economic pressures
Packaging specialist DS Smith has navigated difficult economic conditions with rising revenues and a boost in profits.
The company has enjoyed a 21 per cent growth in sales, which have climbed to £7.24bn, while operating profit has spiked 23 per cent to £616m and profit before tax has soared 64 per cent to £378m.
It has also cut net debt to £1,484m – to a ratio of 1.6 to earning before interest, taxes, depreciation and amortisation, down from 2.2 last year.
Earnings per share have climbed to 30.7p, with dividends jumping 24 per cent to 15p.
The strong headline results were powered by strong profit momentum through the second half of the financial year – with a six month operating profit of £340m.
Price recovery successfully offset increased input costs and supply chain disruption from the pandemic and Russia’s invasion of Ukraine.
Europac has continued to deliver a robust operational and financial performance, and its US expansion is also developing – with EBITDA growth of 31 per cent.
DS Smith will also maintain investment in growth project, with the new greenfield site in Italy now operational and Poland currently being commissioned.
Miles Roberts, Group Chief Executive, said: “It has been another year of volatile trading conditions where we have worked through the tail-end of the pandemic and, more recently, the tragic events of the Russian invasion of Ukraine. These difficult periods have again brought the best out of all of our colleagues at DS Smith, demonstrating their resilience, compassion and commitment.
For the year ahead, the firm expects corrugated box volume growth currently expected to be 2-4 per cent, with sustained price recovery and cost management offsetting inflationary costs.
Laura Hoy, Equity Analyst at Hargreaves Lansdown said: “DS Smith used the pandemic as a springboard and it is impressive how far it has come. The group’s using some of the excess cash running through the business to fund expansion, while the rest goes toward paying down debt and rewarding shareholders. For now it looks like the group’s got the balance right.”