Confident DS Smith hikes divi by 41.3%

23rd Jun 2011 07:05

Recycled packaging firm DS Smith overcame a sharp rise in input costs to grow pre-tax profits by 86% last year.Profit before tax in the year to 30 April rose to £102.2m from £55.0m the year before, on sales that rose 19.5% t £2,474.5m from £2,070.6m. With the effects of the recent acquisition of Otor stripped out, sales rose 10.0% year-on-year.The company said cost synergies from the September acquisition of Otor are expected to be €13.0m, up from previous guidance of €10.3m, with the cost savings expected to be delivered by April 2013, one year earlier than originally anticipated.Net debt increased by £111.5m to £351.0m due to expenditure of £203.2m to purchase Otor (including acquired net debt), partly offset by strong operating cash flow and funds raised through the issue of equity in July 2010.Adjusted earnings per share climbed 36.0% to 18.9p from 13.9p the year before, while the full year dividend has been hiked to 6.5p from 4.6p."The strong performance was achieved in the context of significant increases in input costs, which we have been dedicated to recovering. The result is a business now delivering a return on capital above its cost of capital, which is a critical milestone," claimed group chief executive, Miles Roberts.Trading in the current financial year has started "very well", Roberts added. --jh