DS Smith on the takeover trail

PACKAGING maker and office supplies wholesaler DS Smith is in acquisition mode, armed with strong market positions, an improving cost base and a healthy balance sheet despite the downturn. 'We are well-placed to make attractively priced bolt-on acquisitions to complement organic development,' said new chief executive Tony Thorne.

Thorne was chief operating officer until today when he took over from Peter Williams, who becomes deputy to chairman Anthony Hichens until Williams retires in September.

Thorne said his cost-cutting plans for the second half include the loss of about 100 jobs at the Spicers wholesale office stationery business, most of these at the 11 UK sites. But he said he sees no need for many more people to go.

Pre-tax profits for the six months to 27 October fell by more than 9% to £35.8m before £700,000 of one-off items and amortisation.

Hichens said it was 'extremely difficult' to forecast second-half trading. The interim dividend is unchanged at 2.8p a share although earnings per share are off 0.6p at 7.7p.

Packaging performed well but operating margins fell from 4.2% to 2.5%. Operating profits fell more than a third to £6.7m at Spicers, which was hit by development costs in Britain, Spain and Germany.