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