DS Smith upbeat as record demand fuels profit

DS Smith said financial performance would improve as the packaging company reported a sharp rise in first-half operating profit and an increase in the interim dividend.

Adjusted operating profit rose 20%, or 26% excluding currency movements, to £276m in the six months to the end of October as reported revenue increased 16% to £3.36bn. Pretax profit rose 80% to £175m.

DS Smith increased its interim dividend by 20% to 4.8p a share.

The company said demand for corrugated boxes hit a record as people ordered goods online and the COP26 climate conference prompted more interest in sustainable packaging. Supply chains remained solid and the company was able to increase prices to offset rising costs, it said.

Miles Roberts, chief executive, said: "In a challenging operating environment, I am pleased to see good progress. Our supply chains have remained secure and the significant increases in input costs have been mitigated by effective hedging of energy cost, our long term supplier agreements and raising packaging prices.

"This underpins our confidence to deliver a significant improvement in profitability during the second half of this year in line with our expectations and towards our medium-term targets."