Trade Resources Market View The Announcement Comes as Corrugated Firm Said Its Revenues to Be Close to £3.7bn

The Announcement Comes as Corrugated Firm Said Its Revenues to Be Close to £3.7bn

The announcement comes as the corrugated firm said it expects its revenues to be close to £3.7bn for the full-year to 30 April.

SCA's former Shenstone facility produces point of sale and point of display products made from cardboard. PN understands that it employs around 80 people.

Speaking to PN this morning, Roberts said that reorganisation plans were ongoing for a number of sites at the moment and SCA's former Shenstone facility was included in this and mulitgraphics site in Bradford.

Facing challenges

He also said that at any one time assets would have to be assessed and the "right locations" had to be found with the "right capabilities" and "right competitiveness". He said this resulted in investments and closures.

Roberts also told PN that he recognised the markets were challenging at the moment, especially in Europe. He said: "Packaging has always been intense in terms of competition.

"The market is challenging but DS Smith is up to meeting that challenge."

In a statement as it enters the close period at the end of its financial year to 30 April, the company said that its full-year earnings will be towards the higher range of expectations after a "transformational" year.

Having acquired Swedish rival SCA Packaging for £1.28bn last June, nearly doubling the size of the group, revenues will rise 90% over the prior year and cost synergies from the new addition of €40m versus original guidance of €25m.

Roberts also praised the people who worked for DS Smith and said he was "absolutely delighted with progress that has been made" with the company following the SCA acquisition.

Packaging business growth

In DS Smith's pre-close statement, Roberts said: "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."

Elsewhere, the group's core packaging businesses have delivered underlying volume growth in line with its medium-term financial target of gross domestic product growth plus 1.0%, with the original DS Smith business continuing to outperform.

DS Smith also said that the acquisition should now deliver a return above the cost of capital in the 10 months to 30 April, a year earlier than originally announced.

The business continues to generate strong cash flow and management expects the ratio of net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) to fall to 2.0 times or below by year end., according to the firm.

Source: http://www.packagingnews.co.uk/news/ds-smith-confirms-reorganisation-plans/
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DS Smith Confirms Reorganisation Plans for Several UK Sites