DS Smith results prove benefits of acquisition of rival SCA unit

Michael Bow
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CORRUGATED cardboard packager DS Smith boosted its first half profits by 62.5 per cent, helped by its acquisition of rival SCA Packaging, it said yesterday.

The company, which snapped up SCA earlier this year for €1.6bn (£1.3bn), said the buy had helped increase first half revenues to £1.67bn up from £1bn.

This sent pre-tax profit from continuing operations before exceptional items and amortisation soaring to £106.1m.

The Maidenhead-based business, which was set up in 1940 to make cartons before listing in 1986, makes recycled packaging and competes with rival Smurfit Kappa.

“We are pleased with the strategic, operating and financial progress made in the first half, particularly against a challenging economic backdrop,” Miles Roberts, group chief executive said.

The company also raised its interim dividend to 2.5p per share from 1.9p yesterday.

Weak demand and over-capacity in the European paper sector has proved a challenge for DS Smith and its rivals.

The business yesterday said it was taking steps to deal with the cyclicality of the paper market on the business to get better return on capital, but did not give specifics.