Dublin-headquartered Smurfit Kappa's profits surge by 58%

Smurfit Kappa’s share price jumped 15% yesterday on the back of the Dublin-headquartered paper and packaging group reporting a near 60% surge in annual profits.

The group reported pre-tax profits of €599m for 2015; up 58% on the €378m generated in 2014. Last year’s revenues were up at just over €8.1bn.

The profit growth was largely driven by an exceptionally strong performance in the final three months of the year, with fourth quarter profits up 230%, year-on-year, to €191m.

Basic earnings per share for the year grew by 63% to 172.6c.

Management also offered an upbeat outlook for this year on the back of improving corrugated prices.

A 20% increase in final dividend to 48c per share — bringing total dividend for the year to 68c, or 23% up on the previous 12 months — reflects the board’s confidence.

“Having established a strong platform for growth over the past few years, we expect to deliver good earnings growth in 2016,” group chief executive Tony Smurfit said.

“While this will, to some extent, be influenced by the broader macro-economic environment, we are confident our current investment initiatives, our geographic diversity, our integrated business model, and our strong, free cash-flow generation positions us well for 2016 and beyond,” he said.

The group spent over €380m on acquisitions last year and delivered cost savings of €75m; a figure it hopes to meet again this year.

In addition, Smurfit Kappa is considering switching trading currency for its ordinary shares in London from euro to sterling next month in a bid to make it easier to fulfill a potential future admission to the UK series of FTSE indices.

Management said that it remains committed to retaining an Irish Stock Exchange listing and will keep the euro as its financial reporting currency.

The group also yesterday announced that Ian Curley will stand down as chief financial officer, next month, following 16 years in the post.

He will be replaced by Ken Bowles.

Smurfit’s share surge tapered off slightly in later trading yesterday

However. it closed the day up by almost 12% at around €12.40.


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