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(Alliance News) - DS Smith PLC on Tuesday said it continued to perform in line with expectations over the past four months, giving it the confidence to plan to pay an interim dividend.
The London-headquartered packaging business told its annual general meeting that it has progressed well since the beginning of May, with performance continuing in line with expectations, despite the economic challenges that resulted from Covid-19.
Geographically, DS Smith said Northern European region has continued to perform well, with "pleasing" recovery momentum in Southern and Eastern Europe since May.
The company also said it is encouraged by the progress in North America, in particular in attracting new customers.
"This gives added confidence in an improving North American divisional performance for the year," DS Smith said in its AGM statement.
Meanwhile, supply chains have remained robust which has allowed all of the company's plants to remain operational.
DS Smith said its strong commercial offering continues to help mitigate the ongoing lower pricing environment. The company said, as expected, the impact of lockdowns on recycling infrastructure and the associated short-term impact on old corrugated containers pricing has reduced to more normal levels.
Given the performance over the last quarter, and an improved clarity in the outlook, combined with a strong financial position, the company said it intends to declare an interim dividend for the half year to the end of October.
"While the macro-economic outlook remains challenging, we are pleased to see volume growth in August and the reduced old corrugated containers costs," said Chief Executive Miles Roberts.
"Our customer focus, strong cost control, cash generation, and liquidity profile, together with continued performance in line with our expectations, gives us confidence for the future," Roberts.
DS Smith shares were trading 5.7% higher in London on Tuesday at 288.50 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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