DS Smith explores sale of plastics division as profits jump

Corrugated packaging giant DS Smith has revealed it is looking to offload its plastics division. The FTSE 100-listed company, which supplies to companies including Amazon, Aldi, Tesco, and IKEA, dropped the news last month while posting a 32 percent jump in first-half adjusted operating profit, to £304 million. DS Smith said that following an “initial review”, the board had concluded its plastics arm was an “attractive asset with good growth prospects”. As a result, it was “exploring opportunities for a potential sale of the division”. The plastic division is now being treated as discontinued and was excluded under ‘continuing operations’ in the company’s results, which covered the six-month period ending October 31, 2018. While the unit has continued to trade well, with revenues up 2 percent, the group said there had been some impact to its short-term profitability due to the impact of higher polymer prices and the “normal lag in recovery through prices”. DS Smith Chief Executive Miles Robert said: “We are very pleased with the progress we have made over the last six months. We have strong momentum in the market, delivering good top line growth and substantially increased profit levels,” he explained. Mr Roberts added: “We continue to win market share through our strong FMCG presence and our leadership in both e-commerce and sustainable packaging. DS Smith is extremely well positioned to capitalise on these ongoing growth trends and we are confident about the future prospects for the business.”