Paper and packaging got exciting last year when DS Smith (SMDS) spent £1.3bn on Swedish rival SCA Packaging. Since then, the benefits have far exceeded initial expectations and the share price has just hit a record high. With a decent first quarter behind it and further savings coming through, chief executive Miles Roberts is brimming with confidence.
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Of course, the European market is difficult right now, and it will take between three and six months to pass higher costs on to customers. But volumes during the three months actually exceeded Smith’s target of GDP plus 1 per cent, driven largely by Italy, France and Germany. In fact, analysts at Investec Securities see potential for upgrades both later this year and for 2015.
