A strong growth in profits has been reported by UK packaging giant DS Smith (London; www.dssmith.com) for the 2014-2015 financial year, despite the headwind from foreign currencies and the euro in particular. Adjusted operating profit increased by 17% on a constant currency basis (9% on a reported basis) to GBP 335m (EUR 470m), compared with GBP 307m in 2014. The rise was driven primarily by volume growth, a focus on higher value-added product and services, and synergies from the SCA Packaging acquisition in January 2012. Revenue of GBP 3.82 bn was 1%, or GBP 29m, higher than the previous year (constant currency), despite a slight reduction from the net impact of acquisitions and disposals.

The group purchased Kaplast in September 2014, an injection-moulding business in Croatia, to expand the returnable transit packaging (RTP) element of its plastics business – see Plasteurope.com of 12.09.2014. That month also saw the sale of the Scandinavian foams business, part of SCA Packaging, for GBP 22m.

CEO Miles Roberts commented: “This has been another good year for DS Smith. In a fast changing retail and consumer environment, packaging is more relevant than ever. The progress in the business with customers is evidenced by accelerating volume growth, together with increased margins and returns, from our unique and enhanced offering.”

The group’s plastics business realised a growth in adjusted operating profit of 8% (constant currency basis) to GBP 28m, versus 2014’s level of GPB 27m. However, constant currency revenue slipped by 2% as growth was offset by the disposal of two small businesses. In the flexible packaging segment, DS Smith said continued double-digit growth of the beverage dispensing tap business in the USA was partially offset by the gradual start-up of new facilities in Europe. It added that demand for flexible packaging continues to grow through new products and new markets served, in addition to a better service offering in Europe.

Its European-based RTP segment posted very strong results with adjusted operating profit up by 26% year on year, and revenues 8% higher. DS Smith said demand rose for most product lines and a favourable raw materials market increased the impact of additional sales and more than offset the negative effects from foreign exchange.

DS Smith said it was excited about the business’s future prospects citing the progress being made with global customers and the opportunities for growth as it expands its international reach and product offering.