DS Smith starts year well after annual profit drops

DS Smith said the current financial year had started well as the packaging company reported a sharp drop in annual profit caused mainly by higher costs and lower prices during the early stages of the pandemic.

Pretax profit for the year to the end of April fell 38% at constant currency to £231m from a year earlier as revenue dipped 1% to £5.98bn. DS Smith declared a final dividend of 8.1p a share, taking the annual payout to 12.1p a share. Adjusted operating profit fell 24% to £502m.

The FTSE 100 group said momentum in packaging volumes built during the second quarter when growth was 8.2% leading to a strong improvement in profitability. Inflationary pressures also built, including for old corrugated cases, energy, transport and labour.

"The current year has started well, with the volume momentum of the final quarter of FY21 continuing into this year," DS Smith said. "While there remains uncertainty in the overall economic environment, demand is strong and we expect to make good progress this year."