DS Smith sees demand pick up amid online shopping surge

The firm, which has two sites in the Black Country, saw an improvement in box volumes, which rose by five per cent year-on-year in November.

However, pre-tax profit for the continuing operations fell 54 per cent to £97 million for the six months ended October 31 2020, hurt by lower prices for boxes and weak industrial demand. Revenue also shed nine per cent to £2.8bn.

DS Smith said it "experienced a very difficult economic environment due to the impact of Covid-19" over the period.

DS Smith has a packaging site at Langley House in Summit Crescent, Smethwick, and a paper and plastics recycling depot at Rose Hill Industrial Estate, Willenhall.

Including e-commerce, the fast-moving consumer goods (FMCG) sector accounts for nearly 83 per cent of the company’s box business volumes.

DS Smith, which supplies packaging products to Amazon, Nestle and Unilever, said it plans to construct packaging plants in Italy and Poland to meet future demand.

CEO Miles Roberts said: “I am really proud of the commitment, professionalism and flexibility of our employees in this extraordinary time, keeping all our plants operational and responding to our customers’ needs throughout the period. This has enabled the group to perform well in the context of an unprecedented environment.

"Quarter one was particularly impacted by Covid-19, but pleasingly we saw real momentum in corrugated box volumes and profitability through quarter two. We have maintained our track record of winning market share through our fibre-based offering focussed on FMCG and e-commerce customers, where the seasonal period has seen solid growth.

"We are as excited as ever about the structural growth drivers for corrugated packaging with a number of trends accelerated by the Covid-19 pandemic. We are well positioned to capitalise and are announcing today the construction of two new state-of-the art packaging plants in the fast growth regions of Italy and Poland to supply the burgeoning FMCG e-commerce sector.

"While the economic and political environment remains uncertain due to Covid-19 and Brexit, we see continued momentum for our business, underpinning confidence in continued performance in line with our expectations for the year."

DS Smith also said it has decided to resume the payment of dividends, declaring a 4p a share dividend for the first half.