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Packaging giant DS Smith saw profits slide 39% in the first half of the year as it battled falling packaging prices and rising input costs.
The fall was in line with analysts’ expectations as the company’s sales fell 4% to £3.4bn in the six months to 31 October. Northern Europe – including the UK – fell 5%.
The company was hit by falling packaging prices - down 5% in the period - despite fibre and paper costs going up.
A 2% rise in volumes and falling input costs elsewhere helped offset some of the pressure but meant operating profit fell to £221m from £365m the year before.
“We have delivered a solid performance, with profitability in line with our expectations, despite a continued challenging market environment,” said CEO Miles Roberts.
“Looking forward, whilst recognising the recent paper price weakness, we continue to expect modest growth in packaging volumes and increasing sequential prices to recover higher input costs.”
In April, DS Smith agreed terms on a £5.8bn all-share takeover from US rival International Paper.
DS Smith and IP shareholders overwhelmingly voted in favour of the deal in October, meaning completion is now expected in the first three months of 2025.
Morning update
The use of cash in shops rose for a second year in a row after a decade of falls, according to the British Retail Consortium (BRC).
Cash accounted for nearly a fifth of retail transactions last year due to its role helping shoppers budget, the trade body said.
Debit cards remain the most common method of payment, making up nearly two-thirds of transactions in 2023.
The BRC called on the Payment Systems Regulator (PSR) to take meaningful action on fees charged by card companies.
“Card fees continue to rise at a substantial rate and the PSR must act upon the harms it has identified in its current market reviews. It must move swiftly to reform the market and implement remedies including price caps on fees and price rebalancing measures,” said Chris Owen, payments policy advisor at the BRC.
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