The DS Smith group’s interim management statement reports that trading in the third quarter of financial year 2007/08 was in line with its expectations. “The group has maintained its significant year-on-year progress, benefiting particularly from the recovery of higher input costs in paper and corrugated packaging.”
The statement continues: “The industry supply and demand for recycled corrugated case material (CCM) is in reasonable balance and the pricing environment in both CCM and corrugated boxes has remained firm. Input costs of energy and waste paper, which are at historically high levels, have recently experienced further rises. Our UK Paper and Corrugated Packaging segment continued to perform well while the Continental European Corrugated Packaging segment, which is a net buyer of CCM, has made good progress in recovering the input cost increases which have squeezed its margins.”
DS Smith intends to invest £37M in the recently acquired New Thames Paper Mill, enabling it to produce high quality lightweight recycled CCM from January 2009. The acquisition and investment will “materially strengthen the long term competitiveness” of DS Smith’s important UK Paper and Corrugated Packaging business, and give the group “a significant capability in the growth segment of high quality lightweight CCM”.
The group continued to grow revenue well in plastics packaging and the returnable transit packaging sector made good progress, but liquid packaging and dispensing “was affected by competitive pressure in Europe”.
The preliminary results for the financial year to April 30 2008 will be announced on June 26 2008.
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