Not that I know of, I think the market is still reacting to the pre-close from the other week.
If the sp keeps rising coming up to the results then it might be time to reduce a bit, but I seem to have been saying similar things for years, and it's never got to the point where I think we look particularly overvalued. Anything close to six quid might be tempting though
I wonder if longer term SMDS will expand further into the US market as it looks like they are achieving good progress with Interstate by applying their European tech to US packaging.
Also, they previously mentioned that it is cheaper to produce and supply paper & cardboard from the US to their southern European factories than to bring down from northern europe. Economies of scale and maybe some currency advantages at present.
Perhaps building bigger operations in the US will fend off any takeover bid (SKG & international paper still ongoing) so SMDS may add more US acquisitions.
There will also be some benefits from the 'anti-plastic' lobby which means more recycled cardboard - to SMDS's advantage.
I have been wary of buying more shares here but in retrospect the recent dip to 460 would have been a good opportunity.
(Sharecast News) -DS Smith issued a pre-close trading update on Monday for its financial year just ended on 30 April, reporting that its business continued to perform in line with its own expectations, with the industry and business trends consistent with its trading update in March.
The FTSE 100 company said volume growth remained "strong", with its focus on sustainable solutions and the accelerating e-commerce sector. That, and continued growth in multinational customers, had resulted in further gains in the company's market share.
Recovery of increased paper prices, which had risen throughout the year, also continued as expected and the firm said its expected return on sales was to be in line with the prior year.
Volume growth in the US was described as "excellent", and the board said it was "very pleased" with the positive reaction from local and global customers.
The integration of Interstate was also progressing well, and DS Smith said it now expected synergies to reach an annualised rate of $35m by the end of the third full year of ownership - a further increase of $5m on its previous expectations - which the board said would be driven primarily by further anticipated global supply chain benefits.
DS Smith's acquisition of Ecopack and Ecopaper completed on 6 March, further building its European network, with the board said to be "pleased" with the initial progress made.
"We are very pleased with the performance in the year, in particular in the step-up in volumes that we have delivered, and in the successful integration, customer reaction and volume growth within Interstate," said group chief executive Miles Roberts.
"Our success is underpinned by our commitment to sustainable packaging that is innovative and adds value to our customers, throughout their global supply chains and also by a focus on our own global supply chain efficiency. This approach, together with momentum in our business and opportunities to further strengthen our customer offering, gives us confidence in the future."
It was a decent update, and a tad better than I'd expected, but I'm not sure I'd go so far as to call it "very strong" !
If the year's return on sales is the same as last year, then it'll be 9.3%, so with expected ( by brokers ) revenue growth of ~19%, then that should mean expected growth in profits and eps of much the same.
So, I reckon, we'd be sitting on a forward eps of something in the order of 37 to 38p. current sp of ~510p gives of 13 to 14 times earnings. If we were to continue growing at 18 to 19%, then that'd make us cheap, but I think growth will slow down in the next fin year, so we're probably on the lower side of fair value at the moment.
Mind you, I wish I'd added to my holding at 460p the other week when I had the chance
Well, we now know why the sp has been rising in recent days, clearly due to insider knowledge of the very strong update released to-day. SP should be secure at this level and, it seems, all is going well.
Just hope they don't sell out. Ever share I've ever owned when the directors decide to sell the share-holds always lose out in the long run, the Management walk away with millions in the bank and often a cushie job with the new company.
No idea to be honest, but a sp of ~480p isn't far from being a level I'd be interested in topping up at. If I'd been a bit smarter I'd have reduced when it got above 550p, but I was plainly feeling a bit greedy at the time
Barring a pretty large drop in the sp early next week from Friday's close of ~540p, it looks like we'll get the nod for promotion on Wednesday, with the actual promotion taking place in mid-December.
Still holding here, but it's getting perilously close to the point where I might sell a % with a view to finding a mid-cap capable of delivering 20%+ annualised returns, which DH Smith has done very nicely over the last six or seven years or however long it's been now. As companies grow, continuing to grow at that rate becomes harder, hence the feeling that it may soon be the time to start taking profits.
Today's rise was a pleasant surprise and it was good to see the placing getting taken up above yesterday's sp.
I think I've been holding ( and adding ) here for at least five years now ( possibly more ) and the management have barely put a foot wrong, but I am a little nervous about moving into the US market so will take a closer look at Interstate over the next week or so.
I now have fair value at somewhere between 420 and 520p, so would probably take some profits if it got to 525p or so, but if the company keeps progressing as it has, then the likelihood is that "fair value" will grow by between 8 and 15% per annum, so it's quite possible I'll still be thinking about taking profits three or four years down the line.
Full year results look good but a lot of info to digest! Most things including div are up by more than indicated in the 'performing in line with expectations' Q3 IMS in March and the pre-close update from April.
They are also buying Interstate a US cardboard packaging Co. - which is a new market region. Funding via the placing also announced (6.6M shares @455) and more debt.
The European earnings translate into more GBpounds but buying a US Co. in Dollars will be expensive.
Overall there are some parallels with Bunzl and perhaps more so with RPC. The 'market' seems to like the whole picture given the large jump in SP today.
Perhaps we should watch out for an activist like Northern Trust putting the boot in on the accounts as they did with RPC. (after recent acquisition of Letica - also a family owned US Co) SMDS have perhaps got a more selective and spread out acquisition record.
I am continuing to hold here for the longer term. The only question is when is a good time to buy more.
The transcript of the results presentation session isnt up on the website yet but the slides are there.
Packaging company DS Smith (SMDS) is The Share Centres share of the week thanks to strong earnings now feeding through into dividend payments.
The company, which provides corrugated and plastic packaging and recycling services, has benefited from the growth in online retailing where cardboard packaging is widely used.
Analyst Ian Forrest said the latest trading update also pointed to the fact that recently acquired businesses have made solid progress and the group therefore expects to deliver on all five of its medium term financial targets.
He said the company had a good track record of boosting growth with well-judged acquisitions.
Strong earnings are now feeding through into dividend payments, which have increased substantially in recent years, and the prospective yield now stands at 3.6%, said Forrest.
Combine this with good sales growth, a solid record with acquisitions and a cost-cutting plan, we continue to recommend DS Smith as a buy. The shares are suitable for investors seeking a mixture of income and growth but also willing to accept a higher level of risk.
At the time of writing the shares were trading down 0.6%, or 2.4p, at 434p.
The Board declares an interim dividend for this half year of 4.6 pence per share (H1 2015/16: 4.0 pence per share). This represents an increase of 15%, demonstrating the confidence of the Board in the outlook for the Group and the considerable volatility in the sterling exchange rate in the half year. The dividend will be paid on 2 May 2017 to ordinary shareholders on the register at the close of business on 7 April 2017.
The exercise of his share options for £0.00 would realise taxable income of £2,993,696 and tax due of £1,347,163 approx. The value of the shares sold did not even cover the whole of the tax due and so that is more a vote of confidence that a negative action.
Seems like Miles Roberts chief exec ignored "Questors advice"
Miles Roberts has cashed in after selling shares worth more than £1.8million.
The DS Smith boss, who lives in a six-bedroom house in Hertfordshire worth £2.2million with his wife Gillian and their four children, sold 456,026 shares in the packaging company at 395p each.
It leaves the couple, who sold £5.6million of shares in 2013, with a holding of 1.6million shares equivalent to a stake of 0.2 per cent in the company, worth £6.4million.
It comes a month after the company reported its annual results which saw revenues rise 9 per cent to £4billion in the year to April 30, while profits grew 16 per cent.
Packaging group DS Smith has a good track record of inflation beating dividend increases and the full-year results out yesterday, which sent the shares soaring more than 6pc higher, underpin another strong period of growth........
The deal making has increased risks to shareholders with net debt levels rising £450m during the year to £1.1bn at the end of April. The reassuring point for investors is that the company has a habit of reducing debt levels quickly because it generates plenty of cash.
The shares look decent value trading on 12 times forecast earnings and offering a forecast dividend yield of 3.6pc.
The dividend has more than doubled during the past four years, easily outpacing inflation.
The only note of caution we would sound is that packaging has a history of being a cyclical business. If we apply an average of the earnings per share from the past five years, which smooths out business cycles, the shares trade on a not so cheap 21 times earnings.
That said, the company is growing earnings, the full-year dividend should rise by about 8pc and wed be happy to hold for the income."
Finals Presentation looks encouraging but intended to portray favourable outlook
slide 16 Div per share CAGR = 26% for 5 yrs. Slide 33 shows over 60% of revenue is in Euro.
From the March trading update conference call: CEO & CFO responses to the Brexit question:
MR - ''And on Brexit it's very interesting because the UK is obviously one of the countries that we work in, we've got a fabulous presence here and absolutely it's a very important area but at any one time we have quite a few local issues, we've just had one with Catalonia and people wanting to break away. It is possible that 200000 votes are reached in the Netherlands and the Netherlands go for some sort of referendum, we've got Tyrol etc. At any one time when the economic environment is difficult we face these countries potentially breaking away. It doesn't have any particularly onerous near-term consequences. I think we tend to produce and supply in a single country, obviously where there are borders in Europe you get more flows but the UK is certainly a more contained market because you just can't transport the corrugated packaging really cost-effectively across the Channel.
So we don't think it will have a material effect on us, certainly in the short-term. I think in the longer term it just depends what our customers do, if they start to shift production overseas; if they do, then obviously we will seek to rebalance but I think that will be in the longer term. We do plan for these things; we plan for it for Catalonia, we plan for it for lots of places, we planned for it for Scotland. We work with our customers on a pan-European basis and obviously we're in Greece as well; we're the market leader in Greece by some way and we worked very closely with our customers there when I think there was a real danger that it was going to come out of the Eurozone but we planned for that and worked with our customers and they were very clear with us that they have manufacturing centres around Europe, they pay us in a certain currency and whether the economy is in or out it doesn't make very much difference.''
AM - We manage the balance sheet accordingly so we don't foresee issues on that front. Our businesses are headquartered in Europe, in Brussels. The UK for us is a head office and a local market but as Miles said, we plan for it, we work through the consequences. It's a question we get asked a lot, a lot of shareholders are interested; I think we give reasonable comfort that...You don't know what you don't know but in terms of how it will impact our business, we see it as negligible if at all in the very short-term and then as Miles said longer-term for the UK specifically, I mean there will be issues around capital investment and where some of our customers locate but the advantage of having as much pan-European business and in Europe as we are, we think we're pretty well insulated.''
GLTA through the turbulence! SG
The market appears to have given te results an initial thumbs up tejo ( up ~75 to ~415p as I type )
A quick glance through the report suggests most of the headline figures suggest underlying profits are growing between 10 and 15% IFRS profit is pretty flat though. But If we get growth of ~12% in the current FY that'd put us on a forward eps of ~30p so fair value is probably anything up to something like 460/470p ?
Anything much above that and I'd be tempted to take profits
The proposed final dividend is 8.8 pence (2014/15: 7.7 pence), giving a total dividend for the year of 12.8 pence (2014/15: 11.4 pence). Dividend cover before amortisation and exceptional items was 2.1 times in 2015/16 (2014/15: 2.1 times) and dividend growth is consistent with earnings growth at actual exchange rates.
The final dividend of 8.8 pence per share will be paid on 1 November 2016 to ordinary shareholders on the register at close of business on 30 September 2016.
The already weak £ should be of material benefit to SMDS in view of the strength of their European businesses, especially in the comparatives. This well managed business looks to be in a good position irrespective of the referendum vote and may even gain a little from the Mondi problems. have added a few to-day.
... was unspectacular, but reassuring. The city seems to have given it the thumbs up and pushed the sp back above £4 again. The sp has been stuck in a rut for a while so, who knows, it might at last break through 450p ?
DS Smith has set itself various performance criteria to beat, and duly beaten them
Revenue £1.95bn Dividend 4p
It is now more than five years since Miles Roberts arrived as chief executive of DS Smith and vowed to make it the leader in recycled packaging for consumer goods. As mission statements go this is not exactly up there with putting a man on the Moon, but he has achieved his aim.
The company has set itself various performance criteria to beat, and duly beaten them. Return on sales then was below 5 per cent; today it is 9.4 per cent, at the top of the stated 8 to 10 per cent range. DS Smith has done this, along with other packaging companies in different areas such as Mondi and RPC, by buying smaller businesses in Europe, putting them together and cutting costs.
It has also worked closely with customers such as the big supermarkets in developing the sort of packaging they need to promote greater efficiencies.
The figures for the half-year to the end of September on the face of it suggest this process is going into reverse, which may explain the markets perverse reaction to mark the shares 21½p lower to 395p. Revenues are off by 1 per cent, pre-tax profits by more than a quarter to £91 million.
Revenues, though, were hit by the fall in the euro against the pound DS Smith has less than a quarter of its sales in the UK. At constant currency rates they were up by 6 per cent. Profits were hit by £48 million of exceptional restructuring costs, including the closure of a paper mill in the UK, and adjusting for this they were up by 5 per cent, even allowing for negative currency movements, at the operating level.
The key indicator, like-for-like volume growth, which indicates market share gains, is meant to beat GDP by 1 per cent. It came in a further percentage point ahead of this. DS Smith spent about 500 million on three acquisitions in the period, and picked up another in Turkey since the end of the first half. The assumption is that such deals can continue at a similar pace, stoking up the engine for further progress in due course.
There are certainly, as the other acquirers have found, any number of smaller packaging companies seeking new ownership as markets become more difficult or succession issues loom. The shares sell on 15 times earnings. The price fall looks an attractive buying opportunity.
MY ADVICE Buy
WHY Markets reaction is hard to fathom. DS Smith is still performing well by all the criteria it uses and building in future growth
There are also FX changes with Euro 1.28 in FY14-15 vs 1.35 to 1.40 this year with most earnings in Euros. Net debt is 906M pounds but 500M eurobond avoids currency translation. If the euro strengthens it will work in our favour.
Looking again at the capital markets presentation from october, the expansions coming out of the new acquisitions will only start to appear in 15/16 second half and through 16/17 as you say.
They now have more capacity across eastern europe where a lot of DS international customers like Mondelez are also expanding.
" Packaging group LSE:SMDS:DS Smith has recovered from last year's de-rating and is building decent momentum despite stiff headwinds. Consolidation is an ongoing theme in the industry, and acquisitions have played a major role in the 75% rally ..."
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