DS Smith said it had a strong start to the trading year despite challenging economic conditions in a concise update released on Tuesday.
The packaging specialist indicated that although inflation pressures persist, they were fighting back with pricing and cost control strategies.
“Selling cardboard boxes might not be the most exciting business model in the world, but DS Smith’s resilience in tough conditions continues to hold it in good stead,” said Matt Britzman, analyst at Hargreaves Lansdown.
“There wasn’t much to go off from today’s short trading update, investors and analysts will have to wait for this morning’s call to delve a little deeper, but everything looks to be progressing as planned. There was positive news on volumes, which saw some weakness last year as demand in the group’s end markets came under pressure from the cost-of-living crisis. That pressure still exists, but de-stocking from its customers is easing which should improve the volume picture as the year progresses.
“Being a key supplier of packaging to giants like Amazon and Tesco puts DS Smith right at the heart of the evolving e-commerce trend. Economic woes mean the valuation’s moved down to levels that look pretty attractive, chuck in a decent yield and what’s not to like?”