DS Smith H2 ahead of expectations

28th Apr 2010 08:24

Shares in packaging manufacturer and office products wholesaler DS Smith rose sharply after it said second half trading has been slightly ahead of management's expectations."The group's profits have been underpinned by the steps taken to reduce costs, raise productivity and generate cash, but in recent months we have also benefited from higher than expected sales, particularly in Office Products," said DS Smith in a statement.In the group's first half statement in December 2009, DS said that exceptional cash restructuring costs of £4.5m would be incurred in the year. It now expects there to be an additional £9m of non-cash exceptional costs.Demand for corrugated packaging in the European market is recovering, the group added, although it is still below the level at this time in 2008. Plastic Packaging has continued to achieve the better profits noted in the first half, benefiting from restructuring and sales into new markets. Spicers sales have been better than expected, with profits now expected to be in line with last year.