Smurfit Kappa (SKG) celebrated its recent elevation to the FTSE 100 by hiking its final dividend by a fifth to 57.6¢ (49.2p) per share, but shareholders will be just as impressed by the packaging group's resilience in the face of higher input costs and adverse currency impacts.
Smurfit said it experienced volume growth across its core markets in Europe and the Americas, along with a resilient box pricing environment. Although year-on-year revenues were flat, profitability was buoyed by investments in high-return capital projects the group made over the course of 2016. This is evidenced by a 50 basis point increase in the cash profit margin to 15.1 per cent.
Cash profits crept up by 3 per cent in the group's European markets, as prices held firm and corrugated volumes improved over the previous year. For the Americas, cash profits were 11 per cent to the good at €339m, driven by the impact of recent acquisitions and a 20 per cent rise in volumes, particularly noticeable during the fourth quarter. So, despite challenges on a number of fronts, Smurfit managed to drive up overall adjusted operating profits by 6 per cent, to €830m.
Investec expects cash profits of €1.23bn and EPS of 213¢ for the 2017 year-end.
| SMURFIT KAPPA (SKG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,176p | MARKET VALUE: | £5.14bn | |
| TOUCH: | 2,173-2,176p | 12-MONTH HIGH: | 2,211p | LOW: 1,424p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 985¢* | NET DEBT: | 117% | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 7.34 | 319 | 107 | 28.0 |
| 2013 | 7.96 | 294 | 82.2 | 40.8 |
| 2014 | 8.08 | 378 | 106 | 55.4 |
| 2015 | 8.11 | 599 | 173 | 68.0 |
| 2016 | 8.16 | 654 | 189 | 79.6 |
| % change | +1 | +9 | +10 | +17 |
Ex-div: 20 Apr Payment: 12 May £1=€1.17 *Includes intangible assets of €2.48bn, or 1,048¢ a share. | ||||
