Any readers who bought into Smurfit Kappa Group (SKG) following its transfer to a London premium listing earlier this year would surely be satisfied with a return on capital employed of 15.4 per cent at the half-year mark. And although revenues were broadly flat on a year ago, SKG - Europe's largest corrugated packaging group - managed to drive adjusted profits up by 12 per cent, all the more impressive given higher-than-expected input costs.
Although SKG isn't immune to fluctuations in the price of raw materials, it is better protected as its packaging plants source most of their raw materials from its own paper mills. The advantages of this were reflected in positive free cash flow generation in the face of net working capital outflow and increased capital expenditure.