SHARES in cardboard maker DS Smith fell 5.9 per cent yesterday after it announced it expected earnings to be hit this year due to a weaker euro and difficult economic conditions in Europe.
Although DS Smith posted good results for the last financial year – pre-tax profits more than doubled to £167m, up 104 per cent from £82m – its shares fell sharply after it said profits for the current year would be hit by foreign exchange movements.
DS Smith announced that its operating profit was up 23 per cent to £307m from £249m, while revenue rose 10 per cent to £4.03bn.
However the firm, which manufactures and supplies recycled packaging to a wide range of companies, including Procter & Gamble and Nestle, gets over 70 per cent of its revenues from overseas.
It warned the strength of sterling was also likely to have a negative impact on it in 2014/15, with a change of just 1 cent impacting on pre-tax profits by £1.2m.
DS Smith chief executive Miles Roberts said it had a“strong set of results”, despite challenging conditions, and that it had been boosted by costs savings from its £1.35bn acquisition in 2012 of Swedish rival SCA.