Packaging group DS Smith trading in line with expectations

The group, which has sites in Smethwick and Willenhall, said trading since May 1 has been driven by pricing momentum and good cost control.

Corrugated box volumes declined slightly in the first quarter on a like-for-like basis, as expected and against growth of 13 per cent in the comparative quarter. It continues to expect growth of at least two per cent for the full year.

The group said almost all input costs, including energy, have increased significantly, and that energy cost increases are being “substantially mitigated” by efficiency initiatives and a long-term hedging programme.

DS Smith backed its outlook for its 2023 financial year, with an expectation of a "significant" improvement in performance.

Miles Roberts, group chief executive, said: "We have started the financial year very strongly, despite the current macro-economic conditions. We are focusing on ensuring the highest levels of security of supply and customer service and are very pleased with the ongoing support we receive from both our customer and supplier base.

"Whilst the industrial sector is showing some weakness, our FMCG business remains resilient.

"The increased profitability and cash generation is being driven by improving efficiency and cost increase mitigation as well as successfully continuing to raise packaging prices. Overall returns on capital remain within our medium term target.

"As we enter the second quarter, we are very mindful of the challenging economic environment in which we operate and the impact it has on both our customers and colleagues. However, our operating plans and progress to date continue to give us confidence in our outlook for FY23."