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Smith(DS) PLC (SMDS)

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monabri
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Re: Smith(DS) PLC (SMDS)

#298838

Postby monabri » April 8th, 2020, 9:07 am

https://www.londonstockexchange.com/exc ... 95785.html

Against this backdrop and after due consideration, the Board has decided it is prudent to no longer pay the interim dividend due for payment on 1 May 2020, which would otherwise become ex-dividend on 9 April. The Board recognises the high degree of importance of dividends to shareholders and, as such, it will consider the appropriateness, quantum and timing of overall dividend payment relating to the financial year ending 30 April 2020 at the time of announcement of the results in July when it expects to have a clearer view of the effects of COVID-19 on the Company's business, together with additional measures focused on cost mitigation and cash generation.

dealtn
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Re: Smith(DS) PLC (SMDS)

#298906

Postby dealtn » April 8th, 2020, 10:58 am

Not sure what to make of this trading update.

We get statements such as "improvement on the first half on a like-for-like basis..." and then "...main impact to date has been in...Italy, France and Spain..." in the next sentence.

Hard to establish how demand for their products is really doing at this time, and as the virus spreads across the global economy.

Sensible to stop the dividend though.

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Re: Smith(DS) PLC (SMDS)

#298943

Postby dealtn » April 8th, 2020, 12:06 pm

ReallyVeryFoolish wrote:Very disappointing from a high quality business that is likely to be a beneficiary of the present lock down. Their packaging business must be running flat out just to supply Amazon's increased sales. Smacks of opportunism to me. I recently bought SMDS because I perceived quality and resilience. I was wrong, it seems.


Difficult economic times and admissions of being impacted in their statement. For a company with Net Debt above £2bn, and a ratio of that debt to EBITDA of over 2, stopping the dividend is a long way from "smacks of opportunism".

TUK020
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Re: Smith(DS) PLC (SMDS)

#301869

Postby TUK020 » April 20th, 2020, 8:45 am

On the surface SMDS do seem well positioned to take advantage of the growth in online business.

So why do they appear on page 4 of the short tracker, with 5 institutions shorting 3.7% of their stock?

https://shorttracker.co.uk/companies/?sort=2&d=desc

idpickering
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Re: Smith(DS) PLC (SMDS)

#323161

Postby idpickering » July 2nd, 2020, 7:13 am


dealtn
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Re: Smith(DS) PLC (SMDS)

#323252

Postby dealtn » July 2nd, 2020, 12:53 pm

Can't see a lot to like here to be honest. Cash flow is nothing more than ok, and ROCE nothing special. Adjusted Profit is adjusted upwards naturally, but when you dig into those adjustments they mainly relate to acquisition and disposal costs. Not hugely controversial when these are genuine one offs, but the company is regularly acquiring/disposing so brings into question whether these are "adjustable" or just part of the underlying business.

Shares are 10% cheaper than before the announcement. About the only good thing to say is that potential entry price is lower.

Wizard
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Re: Smith(DS) PLC (SMDS)

#324054

Postby Wizard » July 6th, 2020, 11:55 am

DS Smith is the only material faller in the FTSE100 this morning. Contrast to Barratt Developments that this morning extended the dividend cut to the final having decided to give back the furlough subsidy, on the face of it bad, but shares up significantly on the news. Beginning to think there is something going on at DS Smith.

tjh290633
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Re: Smith(DS) PLC (SMDS)

#324147

Postby tjh290633 » July 6th, 2020, 4:59 pm

Wizard wrote:DS Smith is the only material faller in the FTSE100 this morning. Contrast to Barratt Developments that this morning extended the dividend cut to the final having decided to give back the furlough subsidy, on the face of it bad, but shares up significantly on the news. Beginning to think there is something going on at DS Smith.

You should know by now that share prices move in a way unrelated to reality or events. Good results and an increased dividend often lead to a big fall in price. A cancelled dividend can ledad to an increase in price. The CEO having a haircut may lead rto volatility either way.

TJH

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Re: Smith(DS) PLC (SMDS)

#324201

Postby Wizard » July 6th, 2020, 10:19 pm

tjh290633 wrote:
Wizard wrote:DS Smith is the only material faller in the FTSE100 this morning. Contrast to Barratt Developments that this morning extended the dividend cut to the final having decided to give back the furlough subsidy, on the face of it bad, but shares up significantly on the news. Beginning to think there is something going on at DS Smith.

You should know by now that share prices move in a way unrelated to reality or events. Good results and an increased dividend often lead to a big fall in price. A cancelled dividend can ledad to an increase in price. The CEO having a haircut may lead rto volatility either way.

TJH

Yes, but equally you should know by now that sometimes the 'smart money' is ahead of the small investor knowing a little more, a little sooner.

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Re: Smith(DS) PLC (SMDS)

#324513

Postby Bouleversee » July 8th, 2020, 8:16 am

ReallyVeryFoolish wrote:Interesting that Questor in the Telegraph slapped a sell rating on SMDS yesterday. Questor is far from infallible but it adds to my sense of unease here. The underlying message I think is that SMDS isn't the high quality future looking business that we thought it was. I'm disappointed at this outcome. Even as one of the world's worst stock pickers, I felt I was on pretty safe grounds buying SMDS for the next decade or so. Wrong yet again then, RVF.

I can't understand it, E Commerce has gone ballistic. SMDS's core packaging business must have shot the lights out the last three to four months? To me, it doesn't add up. What's going wrong at SMDS?

RVFu.


Join the club.

dealtn
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Re: Smith(DS) PLC (SMDS)

#324559

Postby dealtn » July 8th, 2020, 11:42 am

ReallyVeryFoolish wrote:Interesting that Questor in the Telegraph slapped a sell rating on SMDS yesterday. Questor is far from infallible but it adds to my sense of unease here. The underlying message I think is that SMDS isn't the high quality future looking business that we thought it was. I'm disappointed at this outcome. Even as one of the world's worst stock pickers, I felt I was on pretty safe grounds buying SMDS for the next decade or so. Wrong yet again then, RVF.

I can't understand it, E Commerce has gone ballistic. SMDS's core packaging business must have shot the lights out the last three to four months? To me, it doesn't add up. What's going wrong at SMDS?

RVF.


It's not all about ecommerce though.

Read the RNS and reports.

Commercial volumes are struggling and costs are up. Even if volumes were ok turnover doesn't mean a lot if profitability doesn't rise.

Doesn't mean it doesn't have a future, but the share price is adjusting to a reality that didn't match the scenario that the market (and you it seems) previously imagined of a "better" future with increased ecommerce volumes.

idpickering
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Re: Smith(DS) PLC (SMDS)

#338857

Postby idpickering » September 8th, 2020, 7:20 am

AGM trading update

Trading update

The business has progressed well in the period with performance continuing in line with our expectations, despite the macro-economic challenges that resulted from Covid-19.

Our like for like corrugated box volume performance has improved over the period since the initial impact of Covid-19 and in August we have seen a return to positive growth vs August 2019. Our leading FMCG and e-commerce business has grown through the period demonstrating a consistently strong performance with our multinational customers, more than offsetting the continuing challenging conditions in a number of industrial categories. Our Northern European region has continued to perform well with pleasing recovery momentum in Southern and Eastern Europe since May.

We are encouraged by the progress in North America, in particular in attracting new customers, including multinationals, to our Indiana plant. This gives added confidence in an improving North American divisional performance for the year.

Our supply chains have remained robust which, together with the continued exceptional support of all our colleagues, has allowed all our plants to remain operational, providing security of supply and record service and product quality levels for our customers. Our strong commercial offering continues to help mitigate the ongoing lower pricing environment. As expected, the impact of lockdowns on recycling infrastructure and the associated short-term impact on OCC pricing has reduced to more normal levels and we continue to see further opportunities in terms of efficiencies within our cost base . Given the performance over the last quarter, and our improved clarity in the outlook, combined with a strong financial position the Board intends to declare an interim dividend for the half year to 31 October 2020.


https://www.investegate.co.uk/smith--ds ... 00072814Y/

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Re: Smith(DS) PLC (SMDS)

#338896

Postby Bouleversee » September 8th, 2020, 9:58 am

Good. I wonder how much the dividend will be.(

dealtn
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Re: Smith(DS) PLC (SMDS)

#338942

Postby dealtn » September 8th, 2020, 11:47 am

"Our strong commercial offering continues to help mitigate the ongoing lower pricing environment."

I don't like the sound of this bit.

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Re: Smith(DS) PLC (SMDS)

#338952

Postby Bouleversee » September 8th, 2020, 12:16 pm

No, it's not very encouraging, dealth. With such an increase in deliveries, one would think they could name their own prices but presumably there must be a lot of competition though it would be interesting to know where from. I also hold Mondi which is not doing well either.

dealtn
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Re: Smith(DS) PLC (SMDS)

#338961

Postby dealtn » September 8th, 2020, 12:34 pm

Bouleversee wrote:No, it's not very encouraging, dealth. With such an increase in deliveries, one would think they could name their own prices but presumably there must be a lot of competition though it would be interesting to know where from. I also hold Mondi which is not doing well either.


Well they can't "name their price" clearly!

That's why I would be worried. It's a low margin business operating at a time with lower pricing generally. The best they can do is "mitigate" it.

I can't see the route to higher margin and meaningful ROCE. At least it is cheap, so has some potential for share price appreciation, but I can't see a significant market re-rating coming on the back of this update.

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Re: Smith(DS) PLC (SMDS)

#338965

Postby daveh » September 8th, 2020, 12:45 pm

dealtn wrote:
I can't see the route to higher margin and meaningful ROCE. At least it is cheap, so has some potential for share price appreciation, but I can't see a significant market re-rating coming on the back of this update.



Except its up 7% today - don't know if that counts as a significant re-rating.

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Re: Smith(DS) PLC (SMDS)

#338969

Postby dealtn » September 8th, 2020, 12:50 pm

daveh wrote:
dealtn wrote:
I can't see the route to higher margin and meaningful ROCE. At least it is cheap, so has some potential for share price appreciation, but I can't see a significant market re-rating coming on the back of this update.



Except its up 7% today - don't know if that counts as a significant re-rating.


Well I guess that is down to individuals to answer, but for me it's "No". As I said it's cheap. Looking at a 5 year chart it hasn't spent much time below £3, and is there now, even after a 7% daily rise.

But for me to invest it has to have something more than being cheap, that's not enough, and I was hoping to see something attractive in the update after past disappointments, and It isn't there for me. Good luck to any that hold.

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Re: Smith(DS) PLC (SMDS)

#338989

Postby idpickering » September 8th, 2020, 1:41 pm


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Re: Smith(DS) PLC (SMDS)

#352842

Postby idpickering » November 3rd, 2020, 7:13 am

Pre-close statement

As expected, the market trends and our performance have continued to improve since our trading update of 8 September 2020 with our expectations for overall financial performance unchanged. All of our manufacturing facilities have remained open and fully operational year to date due to the diligence of our people and the robust procedures we have put in place to protect our teams. Despite the considerable challenges, our service and quality standards have further improved throughout the period, supporting our strong customer proposition.

Corrugated box volumes in and throughout Q2 have returned to growth versus the comparable prior year period following the challenges of Q1 and we expect volumes for the H1 period overall to be c. 1.5% lower than the prior year H1. The regional trends described in September have also continued, with positive corrugated box growth seen in both Europe and the US, reflecting ongoing market share gains, in particular with our large FMCG and e-commerce customers. The step-change in use of e-commerce is clearly established across our territories with very high demand from customers for e-commerce packaging as we head into the festive season.

We remain highly focussed on costs and margin, together with robust cash generation, as we continue to see the anticipated year on year modest price deflation in box pricing. We note that the Q2 increases in packaging demand are being reflected in upward pressure on paper pricing in Europe and the US, providing a support for corrugated box pricing.

While the profit for the half year will be lower than the comparable prior year period due to Covid, we have seen significant improvement in Q2 compared to Q1, on both sides of the Atlantic, reflecting the benefit of improving packaging volumes and reduced OCC pricing, combined with the Q1 weighting of the additional Covid disruption costs previously identified. Given the improvement in performance it remains our intention to declare a dividend for the half year to 31 October 2020, as previously announced.


https://www.investegate.co.uk/smith--ds ... 00060159E/


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