• Strong financial performance and position, growing market share
• Strong European performance
• US domestic performance offset by continued weak export paper pricing
• Successful integration of Europac and disposal of Plastics division
◦ Relatively limited Covid-19 impact in March and April, FY 2019/20
◦ Short-term impact due to lower volumes and cost increases in FY 2020/21
• Strong ESG performance
• Well positioned for the future, despite economic uncertainty
Miles Roberts, Group Chief Executive, commented:
" We have made good strategic and financial progress in the year, with the disposal of our Plastics division reinforcing our focus on sustainable fibre-based packaging and our strong commercial focus driving record margin. Of course, the year ended with the onset of the Covid-19 pandemic and I am extremely proud of our employees and their tremendous support, working with our suppliers and communities to ensure every factory has remained open throughout the pandemic, delivering essential supplies with outstanding levels of service in this extraordinary time .
Our business model is resilient, built on our consistent FMCG and e-commerce customer base. In the short term, however, the impact of Covid-19 on the economies in which we operate is likely to impact volumes to industrial customers and add to operating costs. In particular, infrastructure constraints have driven elevated OCC prices, although we currently expect the impact to be limited to H1. With the current economic uncertainty, we continue to focus on our employees, our customers, our communities and on the efficiency and cash generation of our business and accordingly the Board considers it premature to resume dividend payments at this stage.
In the medium-term, the growth drivers of e-commerce and sustainability are as strong as ever. The Covid-19 crisis is also expected to accelerate a number of the structural drivers for corrugated packaging and our scale and innovation led customer offering positions us well and gives us confidence for the future."
And later on dividends;
The Board considers the dividend to be a very important component of shareholder returns. On 8 April 2020, in light of the unprecedented uncertainty due to the Covid-19 pandemic, we announced that the Board had decided that it was prudent to not pay the interim dividend due for payment on 1 May 2020, despite our strong liquidity profile and resilient trading to that date. The Board has since considered the overall dividend payment for this financial year and, taking into consideration the interests of all stakeholders, concluded that the outlook remains too uncertain to commit to a resumption of dividend payments in the short term. Recognising the importance of dividends to all shareholders, the Board will actively consider the resumption of dividend payment, when we have greater clarity over outlook.
https://www.investegate.co.uk/smith--ds ... 00037809R/
I hold these in my HYP, and although I understand the company's position, the lack of dividend payment is still nonetheless disappointing.