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FTSE 100 packaging firm DS Smith (SMDS) grew revenues by 4% in the first half of the financial year, reporting a “record” performance despite economic headwinds.

For the six months to October 31, the company’ revenues increased to £3.18bn, mainly due to market share gains by multinational FMCG and e-commerce customers. 

DS Smith European operations saw good organic profit growth, while though described as good, US performance was offset by the impact of export paper pricing. 

In Northern Europe, including the UK, revenues fell 7% to £1.22bn as organic corrugated box volume growth was mixed. Growth in the UK and Nordic region continued “driven by our strong FMCG focus”, the business added.

In Southern and Eastern Europe revenues were up 25% and down 1% respectively. Sales in the US fell 7% to £317m as corrugated box volumes were below average.

Sustainable packaging solutions were “increasingly valued” by customers, the company added, reflected by good pricing and a return on sales increasing by 110 basis points to 11%.

Pretax profits jumped 30% to £213m during the year. 

In March, the company decided to sell its plastics division to Olympus Partners for $585m. It now expects net proceeds of around £400m from the sale which will complete around the end of 2019.

The plastics business, which traded as a discontinued operation, saw revenues broadly flat in the period, though adjusted operating profits rose 14%.

DS Smith said that, assuming current macro-economic conditions prevail, it expects “an acceleration of volume growth in the second half of the year which, together with the resilience of our business model, supports our expectation of further growth in the year”. 

CEO Miles Roberts commented: “Our leadership in e-commerce and sustainable packaging solutions has enabled us to perform well despite a difficult macro environment and volatility in paper pricing. The continued growth in margin and strong pricing discipline has been particularly pleasing as we deepen our relationships with FMCG customers and grow market share.

“We continue to capitalise on the strong long-term growth drivers of fibre-based packaging, with our industry-leading innovation driving differentiation in the market.”

DS Smith shares opened 4.7% lower at 361p.

Morning update

The FTSE 100 opened down 0.1% at 7,178.36pts.

Fallers included Britvic (BVIC) down 2.8% to 936p, Tate & Lyle (TATE) down 1.3% to 725.20p and Smurfit Kappa (SKG) down 1.9% to 2,650p.

Early rises saw Marks & Spencer (MKS) rise 0.6% to 192.3p, Fevertree (FEVR) up 0.6% to 2,170p and Sainsbury’s (SBRY) up 0.4% to 214.30p.

Yesterday in the City

The FTSE 100 closed the day in the green, rising 0.4$ to 7,188.50pts recovering from yesterday’s slump.

Among the risers, Associated British Foods (ABF) closed 1.3% higher at 2,503p, Ocado (OCDO) was up 2.7% to 1,226.50p, DS Smith (SMDS) closed 2.5% higher at 377.60p and Sainsbury’s (SBRY) rose 0.7% to 213.40p.

Fallers included Diageo (DGE) down 1.2% to 3,079.50p, British American Tobacco (BAT) down 0.5% to 2,970p, Coca Cola HBC (CCH) down 1.2% to 2,495p and Morrisons (MRW) down 1.5% to 192.60p.