More on DS Smith
DS Smith: 2005/6 results
DS Smith performed as badly as expected given the H1 results and the profit warnings last October. There was little problem with reveneues, with organic sales growth of 3.1% at CER, but profits were badly hit by higher energy prices.
Adjusted operating profit fell 27% and adjusted EPS fell 31%. With energy costs expected to rise further this year we see little chance of a significant recovery in margins this year.
The historical PE of 15× is not cheap given our expectations of limited recovery, but the risk of a further deterioration are limited and, with dividends maintained, the yield is good at 5.6%.
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