UK packaging giant DS Smith (London; www.dssmith.uk.com) has reported a strong growth in profits for the financial year ended 30 April 2014. The group’s adjusted operating profit jumped by 23% to GBP 307m (EUR 385m) compared with GBP 249m in the 2012/2013 financial year. Revenues rose by 10% to just above GBP 4 bn, boosted by organic growth and a full-year contribution from the SCA Packaging business, which was acquired in January 2012 – see Plasteurope.com of 02.12.2013. During the year, the group generated free cash flow of GBP 140m, down from last year’s GBP 270m.

Miles Roberts, DS Smith’s CEO, said: “This is a strong set of results achieved despite economic conditions across Europe remaining challenging. While we are planning for a difficult consumer economic environment to remain, our focus on delivery, capital discipline and continued investment in the business provides us with confidence in the sustainability of our business model.”

The group’s plastics business delivered revenue growth of 5% while undergoing a significant restructuring programme. Following a detailed review of its cost base and future opportunities, DS Smith closed several sites in Europe, invested in higher growth markets in eastern Europe and optimised its remaining asset base. Revenue was reported at GBP 321m with operating profit (before amortisation and exceptional items) at GBP 27m.

The flexible packaging and dispensing division (FP&D) delivered good profit growth in the US, citing continued success of its “Trutap” product and tea-urn liners. In Europe, however, it was a year of investment as the company shifted its manufacturing assets. The transfer to sites in eastern Europe is expected to be substantially completed by December.

The returnable transit packaging (RTP) business in Europe has had a very strong year, driven by a better market for automotive parts as well as plastic display board. DS Smith said it has won a significant contract with a major brewer in eastern Europe for its “soft touch” crates, prompting investment in additional capacity to meet demand. The crate incorporates the strength of rigid plastic with a softer polymer in the handle. The scope for high quality printing on the crate makes it useable multiple times both in the supply chain and in retail stores. The crate is then recycled at the end of its life when DS Smith provides a specialist mobile unit to grind the material which is returned to its site for reuse.

Meanwhile, the sale of its EPS activities to the BEWi Group (Hamavik / Norway; www.bewi.no) – see Plasteurope.com of 01.07.2014 – has completed following final approval from the competition authorities. The Flamingo business in Denmark and Cellplast in Sweden officially became part of the Norwegian packaging producer on 1 July.

Thomas Kure Jakobsen, managing director for DS Smith Denmark, said: “Our EPS activities represent a very healthy business with a big potential which we would very much like to see being realized. Not only is the sale of our EPS businesses a natural next step for both DS Smith and BEWi Group, it is a genuine win/win situation.”