DS Smith wraps up productive half-year but shares dip

International packaging business DS Smith plc (LON: SMDS) saw its share price dip on Thursday, despite booking an impressive set of fundamentals during the half-year.

The Group’s revenue rose 4% year-on-year to £3.19 billion. This lead a jump in adjusted operating profit of 15% and profit before tax of 31%, up to £351 million and £213 million respectively.

DS Smith shareholders enjoyed similar success, with the Company’s adjusted EPS up 5% to 17.4p, and their interim dividend per share rising 4% to 5.4p per share.

The Company celebrated ‘Record Group profitability’ despite economic headwinds. It added that it saw good organic profit growth in its European division, while progress in its US business was offset by the impact of export paper pricing.

Elsewhere on Thursday, Bigblu Broadband plc (AIM: BBB.L), Clipper Logistics PLC (LON: CLG) and AJ Bell PLC (LON: AJB) all saw their share prices dip, despite reporting good financial progress.

DS Smith comments

Miles Roberts, Group Chief Executive

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. Assuming current macro-economic conditions prevail, we anticipate 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.”

Investor notes

After a slight recovery, the Company’s shares were down 5.70% or 21.60p, to 357.30p per share 05/12/19 15:16 GMT. Analysts from Peel Hunt reiterated their ‘Buy’ stance on DS Smith stock. The Group’s p/e ratio is 11.38, their dividend yield stands at 4.54%.

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.