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Investors hope DS Smith pandemic booms is continuing


Online shopping boom during pandemic propelled packaging giant DS Smith’s business to new levels – and update will reveal if momentum has continued


The online shopping boom during the pandemic propelled packaging giant DS Smith’s business to new levels. 

A third-quarter update on Thursday will reveal whether this momentum has continued as Britons return to the High Street to do their shopping in person following the end of Covid restrictions. 

The City will want to know if it is still on track to reach its targets and if revenues will continue to rise at the double-digit rate it saw in the first half, when turnover rose by 16 per cent to £3.6billion. 

But present circumstances mean analysts will also want some commentary on geopolitical events too. 

FTSE 100 rival Mondi was hammered last week when sanctions were imposed on Russia, as the company makes around 12 per cent of its turnover in the pariah state. DS Smith, on the other hand, does not directly operate in Russia. 

But analysts have been quick to point out that the full impact of sanctions is hard to predict and that investors will want DS Smith to spell out whether or not the Ukraine crisis hits the company, even indirectly. 

Rising costs are another key area. For DS Smith, which makes around 20billion boxes a year, higher raw materials prices could pose a problem for profitability. 

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: ‘The main aspect we’ll be focused on is increasing input costs.

‘These have been on the rise for a while, and DS Smith has been able to offset this by increasing its own prices.’ Its shares fell nearly 5 per cent to 297.6p yesterday.

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