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(Alliance News) - Packaging firm DS Smith PLC on Wednesday reported like-for-like business growth in the third quarter and added that it is yet to be affected by the coronavirus spread.
DS Smith shares were 3.9% higher a 335.00 pence each in London on Wednesday morning, making the stock the FTSE 100's best performer.
In trading since November 1, like-for-like corrugated box volume growth rose, "as expected". This was "despite continued uncertainty in the macro-economic environment".
DS Smith's third quarter ended in February, and its current financial year runs to the end of April.
DS Smith reported "good performances" in the UK, Iberian Peninsular and eastern Europe.
"It has been especially pleasing to see the ex-Europac packaging operations performing well and our leading FMCG and e-commerce businesses growing strongly over the important Christmas period, although countries with exposure to export led markets, including Germany, continue to remain subdued," DS Smith added.
In North America, the company said it is "very pleased" with the progress and initial customer reaction from a box plant which it opened in the US state of Indiana in November.
DS Smith said: "Our domestic US business remains robust, although the negative impact of lower US paper export prices remains ongoing, due to reduced demand from China. However, our increasing packaging capacity at the new site will progressively reduce our exposure to this market."
In February, DS Smith said it completed the sale of its Plastics division to private equity firm Olympus Partners and its affiliate Liqui-Box Holdings Inc, in a GBP450 million deal.
The company added on Wednesday: "The net cash proceeds of approximately GBP400 million, after taxation, transaction adjustments and expenses, will be used to reduce financial gearing in line with our medium-term target of net debt/earnings before interest, taxes, depreciation and amortisation at, or below, 2.0 times. The sale reinforces our commitment to being the leading supplier of sustainable fibre-based packaging solutions.
Chief Executive Miles Roberts said: "The group has delivered a robust performance during the period within a challenging macro-economic environment. Whilst we continue to monitor events and work closely with all our suppliers and customers, we have not to date seen any material impact to our business from coronavirus."
By Eric Cunha; ericcunha@alliancenews.com
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