June 13, 2019 / 7:01 AM / 4 days ago

Packager DS Smith says stocking up on spare parts ahead of Brexit

The logo DS Smith is pictured inside the carboard box manufacturing company DS Smith Packaging Atlantique in La Chevroliere, near Nantes, France, April 25, 2019. REUTERS/Stephane Mahe

(Reuters) - Packaging products maker DS Smith Plc said on Thursday that it had made plans for contingency stocking of spare parts as it readies for Britain’s planned exit from the European Union, but expected disruption to its operations to be “relatively contained”.

The company, which makes corrugated cardboard, recycled paper and plastic packaging, posted a 31% rise in full-year adjusted pretax profit, but said box volumes growth slowed due to previously flagged weakness in certain export markets during the second half of the year.

“We saw some volume weakness in certain export-led markets in the second half of 2018/19, including Germany, but we expect this to improve during the current year,” Chief Executive Miles Roberts said.

The company raised its medium-term margin target to 10%-12%, after recording margins of 10.2% this year, beating its 8%-10% guidance range.

DS Smith, which bought Spanish rival Europac for 1.9 billion euros ($2.15 billion) last year, also raised its savings target from the deal to 70 million euros ($79.1 million) from 50 million euros.

DS Smith supplies packaging products to companies including Amazon.com Inc, British fashion chain Next Plc and brands such as Aldi, Tesco Plc, Primark, Auchan and IKEA.

Reporting by Justin George Varghese in Bengaluru; Editing by Saumyadeb Chakrabarty and Gopakumar Warrier

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