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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Smith (ds) Plc | LSE:SMDS | London | Ordinary Share | GB0008220112 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-3.80 | -1.09% | 346.00 | 346.00 | 346.20 | 350.20 | 343.20 | 349.20 | 13,969,592 | 16:35:05 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Corrugated & Solid Fiber Box | 8.22B | 503M | 0.3656 | 9.47 | 4.76B |
TIDMSMDS
RNS Number : 8344E
Smith (DS) PLC
08 July 2019
DS Smith Plc
(the "Company")
Publication of 2018/19 Annual Report and Accounts and
Notice of Annual General Meeting 2019
The Company's Annual Report and Accounts for the year ended 30 April 2019 and the Notice of the 2019 Annual General Meeting are today published and are available on the Company's website www.dssmith.com. Hard copy documents have been posted to shareholders who have elected to receive them.
The Company's 2019 Annual General Meeting will be held at 12 noon on Tuesday, 3 September 2019 at The Lincoln Centre, 18 Lincoln's Inn Fields, London WC2A 3ED.
In compliance with Listing Rule 9.6.1, copies of the following documents will be submitted to the UK Listing Authority and will shortly be available for inspection on the National Storage Mechanism website at www.morningstar.co.uk/uk/NSM:
-- 2018/19 Annual Report -- Notice of Annual General Meeting 2019 -- Form of Proxy for the Annual General Meeting 2019
In compliance with rule 6.3.5 of the Disclosure Guidance and Transparency Rules the documents can also be downloaded in pdf format from the Company's website www.dssmith.com/investors/annual-reports
A condensed set of the Company's financial statements and information on important events that have occurred during the financial year and their impact on the financial statements were included in the 2018/2019 full year results announcement released on 13 June 2019. That information, together with the information set out in the Appendix below, which is extracted from the Company's 2018/19 Annual Report, constitutes the material required for the purposes of compliance with DTR 6.3.5R. This announcement is not a substitute for reading the Company's 2018/19 Annual Report.
Iain Simm
Group General Counsel and Company Secretary
8 July 2019
APPIX
The primary purpose of this announcement is to inform the market about the publication of the Company's 2018/19 Annual Report and Notice of Annual General Meeting 2019.
The information below, which is extracted from the Company's 2018/19 Annual Report and Accounts, is included solely for the purpose of complying with DTR 6.3.5R. It should be read in conjunction with the full year results announcement released on 13 June 2019. That information, together with the information set out below, which is extracted from the Company's 2018/19 Annual Report, constitutes the material required for the purposes of compliance with DTR 6.3.5R. This announcement is not a substitute for reading the Company's 2018/19 Annual Report. Page and note references in the extracted information below refer to, respectively, page numbers and notes in the Company's 2018/19 Annual Report.
Principal risks (pages 49 to 50 and 52 to 55)
Making risk management work
Our priority is to ensure that DS Smith has a common understanding of risk management practices across all its businesses so as to inform strategic decision making and realise the potential opportunities for growth and development.
Members of the Board, Audit Committee and Group Operating Committee (GOC) maintain a high level of engagement on all aspects of the Group's approach to risk management. This positive 'tone from the top' is reflected well across the Group functions and divisions. There is a continuing emphasis on strengthening the relationship between our strategic priorities set out in the corporate plan and day-to-day risk management activities, whether this is by tracking risks in monthly divisional trading reports or through robust due diligence on acquisitions and new commercial ventures.
2018/19 was a year where our disciplined approach to balancing risks against identified opportunities resulted in changes to our business and risk profile, as shown by our purchase of Europac and the agreement to dispose of our Plastics division. Both these transactions enable us to remain on our strategic path despite the growth of external risks and changing geographical spread of our internal risks. We continue to make sure our internal risks are supported with appropriate levels of investment and we have added to our risk management system of governance with two management committees.
Our framework for managing risks
Risk management is undertaken at all levels within the Group to support its growth and performance aspirations. One of our key principles is the effective management of those risks that give the Group a competitive advantage, where the Group has the scale, scope and capability to help realise benefits related to its value proposition to its customers and stakeholders. This risk strategy and the setting of objectives is executed by the GOC with assurance and oversight from the Audit Committee and Board.
The Board sets out the Group's risk appetite annually, based on the level of risk it is willing to accept in pursuit of corporate targets. The Group's defined risk appetite is the translation of its corporate plan strategies into explicit statements on the level of risk it is willing to take.
Our GOC, management committees and specialist Group functions provide guidance to the businesses on how to better integrate risk management processes into day-to-day activities. We do this through the use and effective communication of relevant information, reporting and embedding them throughout our organisation's culture, capabilities and practices to foster better decision-making.
Report on our principal risks
The details of our principal risks and uncertainties and the key mitigating activities put in place to address them can be found on pages 52 to 55 and a summary is shown in the table overleaf. The principal risks are the ones that may have the greatest impact on our Corporate Plan and they have been discussed at Audit Committee meetings during 2018/19.
Our Group continues to be exposed to a wide range of political, market, cyber and macro-economic risks in addition to the principal risks listed in this report. These other risks are monitored as part of our standard operating processes to ensure that appropriate mitigations are in place as part of regular management reviews. When considered appropriate these reviews are supplemented by 'deep dives' in targeted risk areas. This year the Group focused on its cyber exposures across its network and industrial control systems, assessed cyber mitigation plans against current investments and priorities set out in its cyber security strategy and plans. Whilst our capacity to influence many of these external risks is often limited, our reviews and 'deep dives' on specific external risks enable us to maintain effective mitigation strategies within our business model that can quickly flex and adapt to a changing world.
Emerging risks reporting
In addition to considering current principal risks, our established risk reporting process was adapted in 2018 with the development of an emerging risk report to supplement existing reviews. One area of focus, highlighted by this first report, is where our plans and business model design might not support a wider societal purpose. This was reflected by the emerging risk of water imbalances (demand with availability) in some areas of our operations due to changing weather patterns and a project to build water stress plans at relevant paper and packaging sites is underway. Whilst none of the reported emerging risks were promoted to our principal risk list, we remain mindful of the pace and potential impact that such risks might have on our Group strategy in the future. We will continue to embed this reporting process into our standard risk reporting procedures.
Our principal risks
Risk assessment summary
The principal risks have been updated to reflect our strategic priorities as well as the level of progress in managing them.
Risks redefined
-- Process change risk has been changed to a risk of failing to capture our margin targets.
-- Digital technology risk has been changed to a risk that we fail to drive packaging transformations through technology advances.
-- Consolidation risk has been amended to reflect the unpredictable nature of disruptive and emerging markets.
Key influences
-- Macro-economic and political environments in Europe and the broader world economies continue to be uppermost in our minds given the international nature of our supply chain and the competitive nature of the markets within which we operate. Despite the natural hedges we have built through acquisitions and investments, these risks will continue to evolve given future scenarios with the US and China, Brexit and other developments in international trading rules.
Increasing areas of focus
-- Whilst there are disruptive threats from competitor behaviours, including investments they may make in containerboard capacity, our plans take into account these potential impacts through asset management and footprint realignment, including our acquisition strategy.
-- Our ability to secure the right level of integrated paper supply remains a priority and effective management of this risk is a key part of our planning, which will be further enhanced by extending our network following the full integration of our Europac assets.
Alert to signs of change
-- Whilst we continue to see many opportunities to adapt to changing consumer behaviours and the growth in multi-channel distribution, we remain alert to the risk that consumer shopping habits may differ from our expectations.
-- We continue to see the risk that new fibre technology adopted by others could have a material effect on our key production processes and costs and our investments in paper innovation aim to utilise the positive effects of identifying and adopting new fibre technologies.
Principal risks
Principal Gross Link to Risk Threats Opportunities Management Board reviews risks impact/ strategy tolerance controls Net impact 1. Acquisition Increased/ To double Acceptable -- Our -- We could -- We -- Updates strategy Stable our size acquisition succeed have a from the Our growth and growth in entering diverse Group Chief strategy profitability does not new key acquisition Executive is designed support markets strategy on progress to create our and targeting which on the better pan-European growth includes acquisition value and FMCG areas. bolt-on strategy through customers -- We continue transactions. were reported economies as they to maintain -- Through at each of scale seek to a positive the Group Board meeting. and by develop track record Strategy -- Specific adding a more across Committee, M&A activity new global small and our divisions reviews products supply large have clear were held and services chain. transactions. targeted at least to our -- Acquisitions investments quarterly. supply fail to in key -- The cycle address markets Board received network. key areas and detailed of geographies updates vulnerability (including on the in our the US). Europac integrated transaction business and model and integration in particular process. do not address security of supply through adequate integration. ----------------- --------------- ----------- ---------------- --------------- --------------- --------------- 2. Increased/ To double Re-assess -- Weak -- -- Management -- At each Eurozone Increased our size consumer Opportunities teams Board meeting and macro- and demand to reposition continue the Group economic profitability may slow our business to lead Chief markets down growth model outside projects Executive Exposure in the of our based and Group to multiple Eurozone traditional on cost Finance political (France, markets. optimisation Director and economic Germany -- and presented factors and Italy). Opportunities operational reviews could -- Adverse to re-adjust efficiency. and forecasts impact exchange sources -- We on the consumer rate positions of supply. continue impact disposable may create -- to invest of the income unpredictable Opportunities and actively macro-economic and/or pressures to prioritise manage environment. the level on pricing cost in a strategy -- Regular of industrial for our optimisation to address discussion activity. key and efficiency any long-term in Group commodities. improvements Eurozone Chief -- The across currency Executive UK's exit all divisions imbalances reports from the and Group by managing on Brexit EU might functions. impacts and require of short-term implications. unprecedented slower-growth adjustments markets to our in business higher-growth model that geographies. we may not have foreseen. ----------------- --------------- ----------- ---------------- --------------- --------------- --------------- 3. Stable/ To double Acceptable -- Our -- Improving -- Effective -- The Paper Decreased our size short paper supply integration Board supply and supply chain and review regularly Large profitability strategy performance of all discussed fluctuations may leave by challenging recycled M&A in the the Group our paper/kraft opportunities demand over-exposed closed-loop paper with specific and supply to the and across focus on dynamics threat paper all security of fibre of significant strategy. geographies of supply. and the commodity -- Accessing managed
economic price additional by our consequences volatility. recycled Paper of this --Unanticipated paper material division. can affect and prolonged outside -- Management our long-term price increases of the oversight position of specific UK. on the as a net paper grades -- development purchaser sourced Improvements of supply of paper externally in our chain from third which are internal optimisations. party required supply -- Progress suppliers. to meet of kraft reporting the demands paper from of innovation of the the Europac activities Packaging acquisition. including division's the use Performance of mixed Assurance paper Consistency in our Environmental mills, project. fibre mining technologies and extraction of clean fibre. ----------------- --------------- ----------- ---------------- --------------- --------------- --------------- 4. Increased/Stable To double Acceptable -- Continued -- Securing -- The -- The Capital our size uncertainty access Group Audit markets and about how to suitable has access Committee and liquidity profitability the UK's sources to bank regularly Political, exit from of debt funding reviewed economic the EU capital from its liquidity and credit might be through revolving schedules, impacts implemented. effective credit exchange may have -- Failure active facility, rates, an adverse to meet management maturing cash flows effect funding of our in 2023. and covenant on our needs on core banking -- Additional headroom. growth favourable partners. funding -- The financing. debt terms. is available Group Finance -- Unplanned from other Director decreases three-year regularly and/or facilities. updated changes -- We the Board in sources have extended on finance of finance. maturities options, on our including debt by Euro-financing raising and debt longer financing dated arrangements. debt in the bond markets. -- History of successful equity issuance. ----------------- --------------- ----------- ---------------- --------------- --------------- --------------- 5. Increased/ To double Re-assess -- Our -- Exploring -- Maintaining -- The Disruptive Increased our size weaker a broader strategic Group Finance markets and competitive footprint project Director Market profitability position for our management provided consolidation in some packaging to respond the Board and disruptive markets business. to new with regular behaviours may decrease -- Assessing containerboard updates in our sales volumes attractiveness capacities on market markets and margins. of emerging and a and competitor weakens -- Competitors markets, changing activity. our position may succeed given their geography and bargaining in imitating growing of packaging power. our integration populations, customers. model and economies -- Regular challenge and increased reviews our supply demand and updates cycle business for branded to evaluate model. consumer the scope -- We may goods. and scale face a of our 'perfect recycling storm' footprint. scenario -- Active
where project customers, management suppliers focused and competitors on cost dominate. optimisation and footprint improvements. ----------------- --------------- ----------- ---------------- --------------- --------------- --------------- 6. Stable/ To delight Acceptable -- Direct -- An -- Creation -- The Governance Stable our customers intervention opportunity of the Audit Non-compliance due to to demonstrate Group Committee with local anti-trust a standard Compliance regularly laws or laws. of ethics Committee reviewed regulations -- Cultural and behaviour to oversee results may damage differences well above a broad of the our corporate in newly expectations range internal reputation acquired of all of compliance control and subject businesses stakeholders. subjects. reports. the Group may challenge -- Enhanced -- Regular -- The to significant the Group's collaboration assessment Board received financial business with of compliance an internal penalties. ethics. stakeholders risks corporate -- Greater to monitor between governance constraints the sustainability update on handling implications and government at almost food due of change and community every meeting. to in the affairs -- The contamination regulatory team. Audit risk may landscape. -- Manage Committee require oversight received significant of our regular changes Vision reports to product Zero linking on ethics design health and and and safety compliance. manufacturing. to all business activities. ----------------- --------------- ----------- ---------------- --------------- --------------- --------------- 7. Stable/ To double Acceptable -- Our -- Identifying -- Fully -- Board Changes Stable our size customers early signs resourcing updates in shopping and may reject of growth an internal with habits profitability our e-commerce opportunities organisation innovation Our investments proposition. by actively to grow presentations. in innovative -- We may engaging and develop -- Board packaging not be with our the e-commerce considered fail to quick enough customers segment. customer match to adapt and -- Managing shopping expected to changes stakeholders. 'front habits growth in use -- Exploring end' supply as part in consumer of substitute new chain of Group spending. products. opportunities services strategy -- Innovation in the with fast review. may not packaging moving be a sufficient business consumer driver by active goods, of change engagement industrial, for traditional with customers heavy-duty single-use on alternative and display and recyclable paper markets. packaging packaging -- Evaluations so as to solutions. of our broaden business our offering model in existing focused markets. on strategic segments including end-to-end services. ----------------- --------------- ----------- ---------------- --------------- --------------- --------------- 8. Stable/ To realise Acceptable -- Weaknesses -- Developing -- Succession -- The Talent Stable the potential in our employee planning, Nomination barriers of our organisation centred international Committee Despite people fail to mobile job rotation regularly our commitment drive processes and talent reviewed we may innovation, by using pipeline. Board fail to manage global -- Managing succession retain, change IT systems our critical planning engage and engage to ensure talent and talent and develop our workforce. effective recruitment management.
a productive -- We do use of programme -- The workforce not harness skills across Group Chief and to agile working and resources. our packaging Executive develop practices academies. and the key talent. across -- senior our internal Implementation human talent of DS resources pool. Smith team updated Management the Board Standards and the enhancing Nomination how people Committee are managed on senior and developed. management and talent management programmes. ----------------- --------------- ----------- ---------------- --------------- --------------- --------------- 9. Increased/ To delight Acceptable -- Our -- Enhancing -- Sales -- The Packaging Stable our customers inability our e-commerce and marketing Board reviewed transformations to anticipate and digital organisation packaging Inability the shift technology operates transformation to integrate in consumer competencies. alongside risks as our digital buying -- Adding 'material part of printing habits value by related' the Corporate technology influenced focusing innovation Plan process. and to by digital on IT teams. -- Cyber integrate technologies. eco-systems -- Continued security our innovations -- Our and a digital investments assessment to drive inability strategy in digital report further to adopt to support printers, (based integration technology long-term automation on between quickly customer (including international customer enough partnerships. robotics) standards). products to maintain and machine -- IT network and the innovative innovations. management 'Internet growth and security of Things'. for our review. packaging -- External business. advisory -- Cyber-risk guidance hinders on key the integrity cyber risks. of our business systems. ----------------- --------------- ----------- ---------------- --------------- --------------- --------------- 10. Stable/ To double Acceptable -- Our -- Exploring -- Additional -- The Changes Stable our size inability the use investments Board in fibre and to adapt of virgin in research regularly technology profitability to rapid fibre in and discussed We may technological a sustainable development the security fail to changes manner, of fibre of supply exploit in new including recovery, of existing major fibre recovery, production pulping, materials developments fibre/paper of kraft paper as part in fibre technology substitute making of M&A usage or packaging and kraft and updates. or material top products. performance substitution. technology. -- Continuing packaging. -- Our opportunity -- Improving failure to develop the management to manage our integrated of a material innovation maximisation decline strategy. of fibre in fibre efficiency. quality, -- Regular and leakage business of fibre assessments to other of investments applications. in fibre recovery and stock preparations. ----------------- --------------- ----------- ---------------- --------------- --------------- --------------- 11. Increased/ To lead Acceptable -- Inability -- New -- Continued -- The Sustainability Stable the way to manage insights disclosure Board received We may in energy by creating of our updates under sustainability demand a capex sustainability on Group deliver needs within programme data to sustainability
the required our designed provide performance. level sustainability to enable visibility -- The of targets. continued and assurance Board received transparency, -- Shift progress to our updates clarity in recycling on key stakeholders. on the and commitment behaviour sustainability -- Further Kemsley to and consumer targets. investment power project. sustainability. demand -- Listening to improve may hinder to our management our competitive stakeholders capabilities edge. and in -- Inability encouraging sustainability to reach wider operations. and adequately engagement. -- Internal disclose -- sustainability a higher KPIs to standard/target track as part measures of a DS important Smith promise to our or as required key by customers stakeholders or regulators. were set. -- ----------------- --------------- ----------- ---------------- --------------- --------------- --------------- 12. Increased/ To double Re-assess/ -- Inability -- Ability -- Management -- The Margin Increased our size acceptable to create to enhance and Group Chief capture and added value the investments Executive We may profitability by mismanaging effectiveness in commercial and Group fail to input costs of fibre functions Finance develop with over and other designed Director a comprehensive commitments efficiency to improve presented and sustainable and an programmes. value the Board approach under-priced -- Ability growth. with regular to manage ceiling to build -- Improved updates. our net on products a distinct project profit and services. discipline management margins -- Failure around approach driven of strategic the themes to process by the process of materials, change variability change machines, initiatives. of input or critical digital -- Specific costs system and supply management with output implementation chain. reviews prices. failure. of product and account management. ----------------- --------------- ----------- ---------------- --------------- --------------- ---------------
Related Party Transactions (page 154)
Note 32 Related parties
Identity of related parties
In the normal course of business, the Group undertakes a wide variety of transactions between its subsidiaries and equity accounted investments.
The key management personnel of the Company comprise the Chairman, Executive Directors and non-Executive Directors. The compensation of key management personnel can be found in the single total figure remuneration table in the Remuneration Committee report. Certain key management personnel also participate in the Group's share-based incentive programme (note 25). Included within the share-based payment expense, and detailed in the Remuneration Committee report, is a charge of GBP2m (2017/18: GBP3m) relating to key management personnel.
Transactions with pension trustees are disclosed in note 24.
Other related party transactions
2019 2018 GBPm GBPm Sales to equity accounted investees 8 3 ------ ------ Sales to other investees 4 - ------ ------ Purchases from equity accounted investees 3 9 ------ ------ Purchases from other investees 8 4 ------ ------
Directors' Responsibilities (page 97)
The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare such financial statements for each financial year. Under that law the Directors are required to prepare the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and Article 4 of the IAS Regulation and have also chosen to prepare the parent Company financial statements in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing the parent Company financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgements and accounting estimates that are reasonable and prudent;
-- state whether Financial Reporting Standard 101 Reduced Disclosure Framework has been followed, subject to any material departures disclosed and explained in the financial statements; and
-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
In preparing the Group financial statements, International Accounting Standard 1 requires that Directors:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
-- provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
-- make an assessment of the Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Directors' responsibility statement
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;
-- the strategic report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
-- the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position, performance, business model and strategy.
This responsibility statement was approved by the Board of Directors on 12 June 2019 and is signed on its behalf by Miles Roberts, Group Chief Executive and Adrian Marsh, Group Finance Director.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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