DS Smith wary despite bright first quarter

8th Sep 2009 07:16

Cardboard and paper supplier DS Smith enjoyed a better than expected first quarter's trading, but is still concerned about the level of demand overall while input costs are rising.'Overall trading in the first quarter of financial year 2009/10 has been ahead of management's expectations as described at the time of the group's full year results in June,' it said. The better performance reflects a slower erosion of selling prices and a faster reduction in operating costs.Cost savings of £26m will be achieved this financial year it added, while a sustained reduction in working capital is contributing to lower debt levels and reduced financing costs.Smith added that as the uncertainty of demand levels runs across the majority of it market sectors, and with increases in input costs above its original expectations, it is too early to be certain that this better first quarter performance will be sustained for the full year.