Smith (ds) Share Discussion Threads

[buyzantium] 05/5/2021 10:34

Error it is 3872 that I was hoping to get some sort of response.

[buyzantium] 05/5/2021 10:32

Upward breakout appears to be now taking place. Still await response to my post 3672!

[buyzantium] 30/4/2021 15:00

Marksp2011 - Thank you for your posts. Have you any comment on the 1 year and 3 year charts. I am not a chartist but to my amateur eye they appear to be very strong with further upward breakout beckoning.

[marksp2011] 30/4/2021 12:33

Input cost inflation strong, sales prices lagging the cost increases ==> margin compression
US is improving and spare capacity now being utilised so that should help margin issues

SKG reported today - same story except SKG margin is double 17 v 8% SMDS margin.

I see nothing happening that would make SMDS the packager to hold in preference to Mondi/SKG

[marktime1231] 29/4/2021 10:40

Not sure the update has encouraged me much.

Repeatedly praising "momentum" which translates to business growth ahead of expectations (not materially or significantly), volumes ahead in key lines by up to 7% and prices now being forced up but lagging cost increases (material and significant in the second half).

Focus remains on cash flow and debt reduction, which does not translate in to the prospect of a restored dividend. Still not sure what happened to the disappeared 2020 payments despite SMDS reporting earnings of 33.2p per share and "continued strong free cashflow performance". The 4p interim for 2021 on such a long slow fuse is lower than 2018 (4.9p) and 2019 (5.2p). So what are you expecting in terms of final dividend this year ... 8-9p maybe?

Unless the cost vs price battle means there is a net downside to report in June. A result for 2021 "in line with expectations" is not much help because SMDS did not say what the expectation are. Anyone know, are they encouraging?

The best we can hope for is that net debt reduction has been smashing, but there was no hint of that in the trading update just reiterating that it was continuing.

An update designed to encourage its corporate backers and lenders. Not me.

[scooo] 29/4/2021 08:51

China no longer imports OCC (Old Cardboard Containers)for conversion into testliner paper, and so seems compelled to import testliner instead to fulfil its paper requirements, thereby lifting global testliner prices. Global demand is also recovering generally as the economy learns to live with Covid.

If the above assumptions are correct, it would explain current buoyant prices for Paper and for Paper producers.

SMDS is Short of Paper for its Packaging requirements in Europe but Long paper in its smaller US market, so apparently is reasonably balanced on its input costs.

Robust Packaging volumes & pricing should therefore be key to progress.

[buyzantium] 29/4/2021 07:57

Encouraging statement.

[scooo] 28/4/2021 19:09

It would be nice to know how much mileage is left in older fixed price contracts before they expire to be replaced with newer more profitable deals. The new pricing environment is more encouraging as it is increasingly implemented over more of the customer base. (Same goes for SKG and presumably MNDI).

Mondi merger remains an enigma, a paper possibility that will not be mentioned tomorrow.

[moorsie2] 28/4/2021 18:05

Let's see what the pre close statement says tomorrow. Needs to be good as I guess the SKG results on Friday will be!

[moorsie2] 25/4/2021 19:26

CEO needs to accept his responsibility on the poor returns.

Hw is also the blockage on getting a good return imho

[scooo] 18/4/2021 16:52

I am tempted to think that the reason for polishing its image with a presentation 15/4/2021 could be driven by wishing to convince existing shareholders and potential predators of its true value at this speculative time.

Online growth certainly gives a positive outlook, but the improved pricing environment now taking place is fundamental. Old fixed price contracts are rapidly expiring, allowing higher input prices that previously held back performance to be successfully covered in new deals. The Pre-Close Statement 2020/21 on 29/4/2021 should shed more light. We must wait and see, and try to eavesdrop on any callers.

[moorsie2] 17/4/2021 08:30

LONDON, 16 April 2021 (Press Release) - Due to the significant increase in our input costs and the continued strong demand for RCCM products, DS Smith Paper is announcing a further price increase of €50 per ton for all RCCM grades for all new orders placed from the date of this announcement. This announcement applies across Europe. 

[moorsie2] 16/4/2021 13:16

SKG and Hamburger both out today with 50euro per ton containerboard increases for 1st May - Test liner and Kraft

[buyzantium] 16/4/2021 05:49

From yesterday's seminar. E-comm expected to account for 17% of goods sold in Europe by 2025 and EU e-comm forecasted to grow by +57.5% by 2025 vs 2020.

[moorsie2] 15/4/2021 15:59

No they don't... they have a stated strategy to be short on paper , which in the present cycle conditions is disadvantageous.

Mondi and SKG are more balance or even long on paper so are benefiting significantly at the moment

[marksp2011] 15/4/2021 15:54

They have a history of vertically integrating their supply chain

[moorsie2] 12/4/2021 19:12

The ROI on SMDS is pretty poor for a poor ROI industry. Why invest in this area when for every dollar they put into their cloud computing division is giving 3 ti.es the ROI that SMDS generates?

[marksp2011] 12/4/2021 17:49

Moorsie

Amazons free cash flow last year was $31 BILLION.
Why do you think buying SMDS would tie up too much of their capital?

hxxps://www.wired.co.uk/article/amazon-cardboard-boxes-recycling

You will have to decide how much volume is from Amazon and how much Amazon could reduvce their costs by taking out SMDS OH and margin

Amazon thought it was worth starting a freight operation...............

[sandlab] 12/4/2021 15:45

May 4th is Payday!

[buyzantium] 12/4/2021 13:52

Dividend of 4p will be paid on 22nd May having gone ex dividend last Thursday.

[dbaker1980] 07/4/2021 23:03

I agree there would be no interest in the finished box industry.
I can imagine them trying to muscle in lower down the chain on pulp and board though. The recycling element in this might be of specific interest to them for green washing purposes.
But I don't really see that as a reality either

[matt123d] 07/4/2021 22:21

Nice monthly setup here, measured move target is 468p.

[moorsie2] 07/4/2021 17:10

Amazon has no interest in the boring lower margin box business- would tie up too much capital.

DSS is a perfect play for IP or PCA or WestRock - 3 big American players

[loss-leader] 07/4/2021 15:50

Agreed. Its a bit like the pick and shovel makers in the goldrush. LL