Profits have unraveled at DS Smith, as the packaging company today announced a fall in profits before tax of 26 per cent on a reported basis to £91m for the six months ended 31 October 2015.
Revenue at the company dropped one per cent on a reported basis to £1.95bn, although this had increased by six per cent on a constant currency basis.
Although analysts at JP Morgan Cazenove pointed out that the outlook of the business was positive and earnings were in line with expectations, share price for the company fell after the results were released, dropping more than three per cent in the morning.
“We are pleased with performance in the first half of this financial year,” said Miles Roberts, group chief executive of DS Smith. “We have continued to grow volumes in excess of the market and GDP, with our value-added offering again driving progress in margins and returns.”
Trevor Green, head of UK equities at Aviva Investors, which is one of DS Smith’s top 10 shareholders, remarked: “The company continues to gain market share in Europe and improve its returns, which is a healthy formula to deliver. Even with currency headwinds the company has managed to hit recently upgraded returns targets, highlighting the success of the current strategy.”
Roberts continued: “Our outlook remains positive as the business continues to grow, despite the ongoing challenging economic environment in some markets.”