LONDON (ShareCast) - (Sharecast News) - Packaging business DS Smith said on Tuesday that trading in the year to 30 April 2019 has been in line with its expectations, with ongoing growth in corrugated box volumes and market share gains.
The company said the performance was driven by its resilient FMCG-focused customer base and strong position in the e-commerce packaging market. All regions have seen growth, with particular strength in the UK, Italy and Poland, partially offset by some volume weakness in certain export-led markets such as Germany.

DS Smith said group margins are expected to progress further in the second half of the financial year, while operating cash flow generation should be stronger than in the comparable period last year.

The US business continues to perform well, with strong margins and returns ahead of the company's acquisition case. Meanwhile, integration work on the Europac business is going well and the group said it was "very pleased" with progress to date.

Chief executive Miles Roberts said: "The financial year ending 30 April 2019 has been one of substantial progress. The acquisition of Europac has significantly enhanced our European operations and the group has also been strengthened strategically and financially by the agreed disposal of our plastics division we announced in March.

"Notwithstanding the current economic uncertainties, this progress, together with our focus on the stable FMCG market, and enhanced cost and efficiency improvements position the business well."

Broker Peel Hunt said this was "a very much as expected update with performance in line with expectations."

"The stock has been in the doldrums in recent months reflecting the debate around input prices and the balance sheet. This short statement demonstrates how the business continues to outperform and this is not reflected in a 4/2020 price-to-earnings multiple of 9.8x and yield of 4.6%."

At 1030 BST, the shares were down 2.8% at 362.30p.

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