Online boom makes a packet for DS Smith
THE boom in online shopping boosted demand for DS Smith’s cardboard boxes and paper packaging and yesterday made it the biggest riser on the FTSE 100.
In a trading update at its annual meeting, it said volumes had grown ‘very strongly’ since the start of May, ahead of the same periods in 2020 and 2019, and that current trading was strengthening in line with expectations.
The surge offset ‘significant’ rises in paper prices and costs such as energy and transport.
The US and southern European markets saw ‘exceptionally strong’ growth alongside deliveries of fast-moving consumer goods – items such as cosmetics, packaged foods, drinks and toiletries.
The pandemic caused an explosion in online shopping as lockdowns forced people to rely on home deliveries.
Chief executive Miles Roberts said it was ‘ideally positioned’ to benefit and the group remained ‘confident about the prospects’. It plans to expand, with manufacturing sites in Italy and Poland due to start operations by April.
Shares rose 2.8pc, or 12.6p, to 462.3p, while rival box maker Smurfit Kappa climbed 0.7pc, or 29p, to 4305p.
The FTSE 100 lost 0.53pc, or 37.81 points, to close at 7149.37, while the FTSE 250 dipped 0.62pc, or 150.87 points, to 24.097.48.
The new package of tax increases announced by the Government appeared to have spooked investors, particularly a 1.25 percentage point rise on tax paid on income from dividends.
Takeover speculation at telecoms giant BT was fuelled further after the boss of Deutsche Telekom (DT), one of its biggest shareholders, said it was weighing the options for its 12pc stake in the firm and expected movement within the next 12 months.
DT chief Tim Hoettges said the German group was ‘entertaining all options’ regarding its interest in BT. His comments following the purchase of a 12.1pc stake in BT by French-Moroccan billionaire Patrick Drahi’s telecoms firm Altice in June. BT dipped 0.1pc, or 0.15p, to 164.65p.
On the way up was infrastructure engineer Renew Holdings, which surged 3.4pc, or 27p, to 820p as it upgraded profit forecasts on the back of strong demand for its services and a positive outlook for the UK market.
Maker of wall and floor tiles Victoria found firm footing, rising 2pc, or 5p, to 250p as it said trading continued to be solid and inflationary pressures around raw materials had abated from earlier in the year.
Science Group bounced 3.5pc, or 15p, higher to 450p after raising £18.5m in a placing of around 4.1m shares at 450p each, a 3.4pc premium to its price on Monday.
Mining minnow Kazera Global also rose 7.3pc, or 0.1p, to 1.48p after inking a deal to sell tantalum, an element used in electrical circuits, from its mine in Namibia to Chinese firm Jiujiang Jinxin.
Among the fallers, broker TP ICAP slumped 10.7pc, or 21.06p, to 176p following a gloomy set of half-year results that saw it swing to a £2m loss in the six months to the end of June from a £45m profit in the same period last year.
The firm blamed the challenging trading conditions on ‘quiet’ markets and ongoing disruption caused by Covid-19.
James Fisher & Sons, a provider of submarine rescue and marine engineering services, was also underwater, sinking 6.6pc, or 67p, to 953p as the pandemic continued to batter its businesses. The group reported a half-year profit of £9.2m, down 39pc year-on-year.
Meanwhile, AIM-listed communications firm Gamma tumbled 10.7pc, or 250p, to 2085p despite reporting a 32pc jump in half-year profits to £37m. The shares appeared to have succumbed to profit-taking, having risen nearly 16pc in the last month.