DS Smith says trading in line

In a trading statement for the period since 1 May ahead of its annual general meeting, the company said volume growth remains good, particularly from pan-European customers who continue to benefit from its increased scale and coverage, and reflecting its “continued investment in quality, service and innovation”.

Smith said its return on sales and return on average capital employed have both shown further improvement versus the comparable prior year period, thanks in part to operating leverage and the strength of its business model.

Since the beginning of the year, the company continued to invest organically and acquire businesses in geographies and market segments it deems attractive, including e-commerce and display, building on the five acquisitions completed in 2015/16.

DS Smith said the proposed acquisition of Portuguese corrugated packaging business Gopaca will expand its position in Iberia and complement the operations it has in the region.

The transaction, announced in June, is expected to complete during the first half of its financial year.

DS Smith said it has invested significantly in display products and services. In addition to its organic investment, in June 2016 it acquired UK-based Creo and recently completed the acquisition of Denmark’s Deku-Pack.

Both businesses are focussed on fast-moving consumer goods, retail and media markets and the group said they significantly build on its capability “in this important and growing market segment”.

Chief executive Miles Roberts said: "We are pleased with our start to the year and the momentum within the business, as we continue to grow organically and by acquisition. Notwithstanding the increased political and economic uncertainty within Europe, our outlook remains positive.

“Packaging has ever increasing relevance in a dynamic retail and consumer environment and our recent acquisitions, together with the customer and market opportunities for growth, give us confidence for the future."