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Long-serving DS Smith CEO Miles Roberts is to stand down from his role as the box maker reported a drop in revenues and profits amid weak demand.

He will step down after serving 13 years with the company. A formal notice period will start on 1 December 2024, meaning he will retire later than 30 November 2025.

DS Smith said this timescale would give the company an appropriate amount of time to identify and appoint his successor.

A thorough recruitment process will be conducted and Roberts will remain as a director of the company and CEO throughout.

Chair Geoff Drabble said: “There will be plenty of time to thank Miles properly when he leaves, but he has served the company exceptionally over the last 13 years and has transformed the group into what it is today. He will be much missed by both the board and his colleagues within the wider business.”

Roberts added: “I have enjoyed every moment of my career with DS Smith and it has been a pleasure to work with my colleagues and the company’s customers, suppliers and other stakeholders.

“After 13 years this seemed like the appropriate time to make this announcement, so that a proper succession and orderly handover process can take place. In the meantime I remain fully focused on continuing to develop and strengthen our business and leadership in the circular economy”.

The announcement comes as DS Smith has posted interim results showing a sharp slowdown in first-half sales and profits.

The group said overall market demand continuing to be weak, leading to a decline in like for like box volumes of 4.7% year on year.

However, it noted that destocking amongst its customers is now largely over, and it is beginning to see signs of volume improvement, with the second quarter performance being better than the first, albeit remaining below the comparable prior period.

The largest decline in volume was in Northern Europe, which includes the UK and Germany, where we have a greater weighting to industrial and e-commerce customers, respectively. Eastern Europe was relatively resilient, with North America delivering volume growth for the period.

For the six-month period, revenue declined to £3.5bn, down 18% on a constant currency and reported basis driven by declines in box volumes (£142m) and lower selling prices (£615m).

Packaging prices were down £273m, approximately 9%, with the balance reflecting lower external paper, recyclate and energy sales.

The impact of box and other volume declines led to a £39m reduction in adjusted operating profit, which fell from adjusted operating profit of £418m to £365m.

The decline in sales price was almost completely offset by a reduction in raw material costs and cost mitigation actions, which led to an overall decrease in costs of £602m, with a reduction in raw materials costs of £360m and cost mitigation initiatives and reduced other costs totalling £242m.

Roberts commented: “I am pleased with the performance for the first half of the year. Our focus on value-added packaging solutions to predominantly fmcg customers, together with the benefit from our self-help productivity initiatives and flexible supply chain has driven a robust profit performance.

“Our Q2 volume performance was improved versus Q1 and we expect this trend to continue with H2 volumes stronger than H1, sequentially and on a like-for-like basis, as we continue to win market share.

“While we anticipate markets to remain challenging, we remain focused on our customers and our costs and expect to deliver full-year results in line with management expectations. Looking forward, we remain confident in our business model and our capital and operational investment programmes which drive innovation, growth, improving productivity and environmental efficiency.”

DS Smith shares were down 1.2% to 296.9p this morning.

Morning update

Shares of Chapel Down, England’s leading and largest winemaker, have begun trading on London’s AIM market this morning.

Andrew Carter, CEO of Chapel Down, said: “We are pleased to announce Chapel Down’s admission to trading on AIM, a move which reflects the maturity of the business and the ambitious growth plan we are committed to delivering in the years ahead. Chapel Down has greatly benefited from its AQSE listing over the past 20 years as it has grown from a startup in an embryonic industry into England’s leading and largest winemaker with a consistent track record of profitable growth.

“We believe that a move to AIM will attract a wider pool of investors to participate in Chapel Down’s growth as the leading producer in the world’s newest global wine region and as we continue to pursue our well progressed and fully funded plan to double the size of the business in the five years to 2026.

“In November we confirmed a record 2023 harvest, with tonnage 86% higher than 2022 and 75% higher than the previous record posted in 2018, which is creating great excitement within our business, and will underpin our strategic ambition to double the size of the business by 2026 as we continue to build Chapel Down’s position as England’s number one and most celebrated winemaker.”

Elsewhere, vaping specialist Chill Brands has updated the market on its UK and US distribution.

Since releasing its vape products to the UK market during August 2023, Chill Brands has now made sales to more than 475 independent retail stores throughout the UK, including franchised branches of Premier, Spar and Nisa Local.

The company has reported a positive trend in reorder rates from independent retailers, with stores placing reorders within around two months of first carrying the brand (depending on their initial purchase amount), reflecting continued demand for Chill Zero nicotine-free vape products.

In addition to these independent stores, the company has received an order that will see its Chill Zero products stocked in an initial 150 of WH Smith’s 1,700 stores.

In addition, Chill Brands is in advanced negotiations to place Chill Zero in another major UK retailer and will provide a further update upon confirming an order, which is expected during December.

Meanwhile, Chill Brands has received a purchase order for its nicotine-free vape products from Smoker Friendly, the largest dedicated chain of smoke shops in the United States. Starting in 2024, Chill Zero products will enter an initial 60 stores of Smoker Friendly’s many US locations.

On the markets this morning the FTSE 100 is down 0.3% to 7,493.7pts.

Risers include Nichols, up 4.2% to 1,047.4p, Glanbia, up 3.9% to €15.88 and THG, up 1% to 79.2p.

Fallers include Pets at Home, down 2.9% to 304.6p, Just Eat Takeaway.com, down 2.9% to 1,233p and SSP Group, down 2.4% to 229.1p.

Yesterday in the City

The FTSE 100 ended yesterday up 0.3% to 7,515.4pts.

However, British American Tobacco was a major FTSE faller, dropping 8.4% to 2,279.5p after it announced it was taking a £25bn one-off hit as it writes down the value of its traditional cigarette brands in the US.

Other fallers included Nichols, down 5.2% to 1,005p, Glanbia, down 3.8% to €15.29, PZ Cussons, down 1.5% to 144.6p, Bakkavor, down 1.4% to 83.4p, Diageo, down 1.4% to 2,774.5p and Imperial Brands, down 0.8% to 1,848p.

Risers included Just Eat Takeaway.com, up 4.3% to 1,270p, SSP Group, up 3.5% to 234.6p, Kerry Group, up 3% to €76.9p, Greggs, up 2.5% to 2,524p, Ocado Group, up 2.4% to 612.2p and Marks & Spencer, up 2.3% to 257.8p.

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