DS Smith surges on acquisition as it posts 31% jump in profit
FTSE 250 packaging company DS Smith reported a 31% rise in full-year pre-tax profit on Thursday as it announced the acquisition of an 80% stake in US packaging and paper producer Interstate Resources from Merpas Co for $920m.
FTSE 250
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16:59 26/04/24
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16:59 26/04/24
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Smith (DS)
340.00p
16:40 26/04/24
In the 12 months to the end of April, pre-tax profit jumped to £264m, on revenue of £4.8bn, up 18% on the previous year, or 6% at constant currency. The company attributed revenue growth to the contribution from organic growth and from acquired businesses.
DS Smith declared a final dividend of 10.6p per share, taking the total dividend for the year to 15.2p, up 19% on the year before.
Chief executive Miles Roberts said: "We are delighted to report another year of good growth for DS Smith, delivered through a combination of acquisitions and organic development. We have expanded our customer offering during the year both geographically and through our continuous focus on innovative solutions for our customers and delivered against all our medium-term financial targets.
"This progress has continued into the new financial year. Full recovery of the recent paper price rises is progressing well and as expected."
DS Smith also said it was buying 80% of Interstate in a deal that will see it take on around $226m of the business's debt, with an option to buy the remaining 20% of the company over five years. It intends to part fund the acquisition through a placing to raise £285m.
Roberts said: "We have seen significant customer pull for our innovative packaging solutions in the US and are excited by the opportunity to grow and support our customers' needs over this large and growing market. It is a further important step in our strategy, further building a higher quality, higher margin group with more growth potential. We very much look forward to working with all the employees, customers and suppliers of Interstate Resources."
At 0820 BST, DS Smith shares were up 7.7% to 478.30p.