DS Smith warns on paper unit

PACKAGING firm DS Smith yesterday sounded a cautious note on its paper unit, warning that higher costs would weigh on trading.

DS Smith said that performance in its paper arm continued to be poor, and it would remain cautious on the profit outlook for the business thanks to higher input costs and growing capacity in the European paper sector. The FTSE 250 firm said it was looking at reducing exposure to the business.

A solid performance in packaging and a strong showing by its recent acquisition SCA Packaging, has kept profit in line with expectations, it said yesterday.