LONDON (ShareCast) - DS Smith saw profits slump in the year as the packaging firm said its results were "significantly affected" by an external environment that worsened as the year progressed.
All its business segments felt the impact
of lower demand for their products and services as a result of the general contraction in economic activity. This weakening of demand gathered pace in the second half.
Pre-tax profit slumped 84.6% to £16.8m on revenue that rose 7.1% to £2,106m. The group has halved its total dividends to 4.4p
Exceptional charges of £50.6m (2007/08: £1.9m) put further pressure on profits, of which £23.6m were non-cash impairment charges, principally related to its associate business in Ukraine and its packaging operation in Turkey.
The group said across Europe packaging demand fell progressively throughout the year. "The current level of market decline is at levels that are unprecedented in recent times," it said.
To cope with the conditions, it has undertaken a programme of actions to reduce costs and improve cash generation, which is expected to achieve annual benefits of over £26m per annum.
"Economic indicators continue to show a global economy in recession. The timing of any recovery remains uncertain. Although it is early in our financial year, trading is in line with our expectations," said the group.
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