Germany drives growth for DS Smith in first half

5th Dec 2013 07:18

- H1 revenues up 25 per cent- EPS up 30 per cent- Smiths sees 'substantial' opportunities for growthPackaging company DS Smith continued to gain market share and improved profit margins in the first half of the year.Pre-tax profits jumped 52% to £85m on sales up 25% to £2.08bn in the six months to October 31st, leading to a 30% gain in earnings to 11.2p per share.Results gained from having a full six months of July 2012 acquisition SCA, versus four months in the comparable period, with like-for-like corrugate box volumes growing more than double target rate at 2.2%.Chief Executive Miles Roberts said: "The good volume growth reflects market share gains from a strengthened customer proposition, driven by innovation and removing complexity and cost from our customers' supply chain."At the same time as gaining share and growing volumes, we have also improved our EBITA margin, despite the headwind due to recent input cost increases which we are recovering as expected, with the usual lag."The FTSE 250 group had a particularly good performance in its chief areas of focus, Germany and Central and Eastern Europe, which were eyed as having good potential following the SCA purchase.The only region to see falling sales was the UK, where revenues dipped 1.9% to £480.8m after the disposal of two sites and a tough trading environment, although operating profit has improved 9.5% to £27.7m.Looking forward, management noted that corrugated packaging is a cost-effective, reliable and fully recyclable material and as such it sees "substantial opportunities for growth".The dividend was lifted 28% to 3.2p per share.OH