DS Smith boxes clever on German strength

Germany's fast-growing manufacturing industry isn’t just underpinning the Teutonic titan’s strong economy; the sector is also boosting profit at Britain’s corrugated box makers.

DS Smith unveiled pre-tax profit of £85 million for the first half of the year today, up 52% on the same point in 2012. Germany’s manufacturing sector accounts for one-fifth of the country’s economy, and goods orders rose to one of its highest levels in two-and-a-half years in October, meaning companies need more boxes to transport their wares.

The number of corrugated boxes that DS Smith sold in the six months to October grew by 8.5%, which the business said was particularly down to demand from Germany. Chief executive Miles Roberts said: “The good volume growth reflects market share gains.”

Outside cardboard boxes, DS Smith’s plastic container division saw revenue soar 9% to £166.3 million although profit was flat at £13.6 million. Overall group turnover rose by a quarter to nearly £2.1 billion, as DS Smith continued to reap the rewards of last year’s acquisition of Sweden’s northern Europe-focused recycling business SCA Packaging.

On top of all that good news, investors were also cheered by a 28% hike on their interim dividend to 3.2p on every share they own.