DS Smith de­nies that plas­tics sell-off was due to en­vi­ron­men­tal con­cerns

The Daily Telegraph - Business - - Business - By Jack Torrance

PACK­AG­ING gi­ant DS Smith has de­nied plans to sell its plas­tics divi­sion are a re­sponse to con­tro­versy around the ma­te­rial’s en­vi­ron­men­tal im­pact as it un­veiled fur­ther bumper prof­its.

Ex­clud­ing the plas­tics busi­ness, pre­tax prof­its rock­eted 27pc to £162m in the six months to Oc­to­ber as new ac­qui­si­tions and higher prices spurred 15pc growth in rev­enues to £3.1bn.

Miles Roberts, chief ex­ec­u­tive, re­but­ted sug­ges­tions that the sell-off was a re­ac­tion to the back­lash against plas­tic, in­sist­ing that the divi­sion, which makes crates and bag-in-a-box pack­ag­ing, was a “very nice busi­ness”. “The un­der­ly­ing de­mand is very strong,” he said.” The busi­ness con­tin­ues to grow and is prof­itable. It is quite a big mar­ket. We’re a good player, but we see bet­ter op­por­tu­nity for us to in­vest in our core busi­ness of cor­ru­gated boxes.”

FTSE 100 mem­ber DS Smith has grown rapidly in re­cent years thanks to boom­ing de­mand for card­board boxes from on­line re­tail­ers in­clud­ing Ama­zon, one of its key cus­tomers.

It has also been bat­tling a spike in raw pa­per prices and grow­ing wage and en­ergy bills, but Mr Roberts said it had now passed that to its cus­tomers.

Growth in the num­ber of boxes DS Smith sold fell to 3.2pc from around 5pc last year, but Mr Roberts said that re­flected a “knock­out, un­be­liev­able per­for­mance” thanks to new con­tracts.

The per­for­mance failed to re­verse a re­cent slide in the com­pany’s shares, how­ever, and they were down an­other 4.3pc at 312p in morn­ing trade.

DS Smith’s takeover of its Span­ish ri­val Europac is ex­pected to com­plete this month.

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