In a pre-close statement today for the year to 30 April, international packaging company DS Smith announced that profits would be at the upper end of expectations on sales of around £3.7bn - an increase of 90% on 2011/12.
Following the acquisition of SCA Packaging last year, the company have been able to make better than expected savings of 40m Euros.
Miles Roberts, Group Chief Executive, said:
"We are delighted with the substantial operating, financial and strategic progress made in the past year, in what has been a transformational period for the Group and our people. Looking ahead, whilst the European packaging market remains competitive, we expect to make further significant progress. Our Packaging businesses continue to grow as we leverage our enlarged and strengthened geographic footprint and further develop our commercial proposition, particularly with our largest pan-European customers.
We look forward to delivering further substantial progress in the coming year."
Mr. Market likes this statement and the shares are up 6% to 230p in morning trading. At the halfway point last December, the board felt confident enough to increase the interim dividend over 30% to 2.5p - if this is repeated for the full year, the dividend will increase from 5.9p (adjusted) to 7.6p and giving a forward yield of 3.3%.
SMDS was a new addition to the income portfolio last year - as usual, just a ‘half’ - maybe its time to top up to a full holding weight but I will probably wait for the full year results to be rolled out in June.
As ever, please DYOR.