DS Smith, the London-listed packaging company, is set to unveil its financial results for the first half of fiscal 2024 on Thursday. Here are the key details you need to know:
According to a Visible Alpha consensus, DS Smith is expected to report revenue of £3.77 billion ($4.75 billion). This would be a decrease compared to the £4.30 billion in revenue reported in the same period last year.
Pretax Profit Forecast
The consensus also predicts a decline in pretax profit, with analysts projecting a figure of £252.8 million, down from the prior year’s £322 million.
What to Watch
Demand & Pricing Outlook
Davy Research analyst Justin Jordan highlights that the focus of attention will be on current box demand and pricing trends. First-half box volumes are expected to decline by 5%, according to Davy Research. Although DS Smith has experienced a boost in product demand during the pandemic, volumes have faced pressure over the past 12-18 months, as noted by Barclays analysts.
Barclays suggests that DS Smith could significantly increase free cash flow and potentially consider share buybacks if it reduces growth capital spending. They recommend cutting capital expenditure to maintenance levels and prioritizing the optimization of DS Smith’s portfolio and operations over costly mergers and acquisitions.