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Packager DS Smith says stocking up on spare parts ahead of Brexit

Credit: REUTERS/STEPHANE MAHE

Packaging products maker DS Smith Plc said on Thursday that it had made plans for contingency stocking of spare parts as it readies for Britain's planned exit from the European Union, but expected disruption to its operations to be "relatively contained".

Adds details on results

June 13 (Reuters) - Packaging products maker DS Smith Plc SMDS.L said on Thursday that it had made plans for contingency stocking of spare parts as it readies for Britain's planned exit from the European Union, but expected disruption to its operations to be "relatively contained".

The company, which makes corrugated cardboard, recycled paper and plastic packaging, posted a 31% rise in full-year adjusted pretax profit, but said box volumes growth slowed due to previously flagged weakness in certain export markets during the second half of the year.

"We saw some volume weakness in certain export-led markets in the second half of 2018/19, including Germany, but we expect this to improve during the current year," Chief Executive Miles Roberts said.

The company raised its medium-term margin target to 10%-12%, after recording margins of 10.2% this year, beating its 8%-10% guidance range.

DS Smith, which bought Spanish rival Europac for 1.9 billion euros ($2.15 billion) last year, also raised its savings target from the deal to 70 million euros ($79.1 million) from 50 million euros.

DS Smith supplies packaging products to companies including Amazon.com Inc AMZN.O, British fashion chain Next Plc NXT.L and brands such as Aldi, Tesco Plc TSCO.L, Primark, Auchan and IKEA.

($1 = 0.8850 euros)

($1 = 0.7879 pounds)

(Reporting by Justin George Varghese in Bengaluru Editing by Saumyadeb Chakrabarty and Gopakumar Warrier)

((justin.varghese@thomsonreuters.com; Tel: +91 80 6749 3486; Reuters Messaging: justin.varghese.thomsonreuters.com@reuters.net))

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