The Lemon Fool

Thanks for pointing that out RVF. Tbh, I missed that bit.

Ian.

Given the improvement in performance it remains our intention to declare a dividend for the half year to 31 October 2020, as previously announced.

The bit I missed (or had forgotten) is that previous announcement of the dividend resumption. Having been back and looked it was in the trading update at the AGM in September, and the wording is substantially the same as above. We'll find out how much the interim is on 10th December.

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.

idpickering wrote:Pre-close statement

...

Corrugated box volumes in and throughout Q2 have returned to growth ... The regional trends described in September have also continued, with positive corrugated box growth seen in both Europe and the US... 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 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.

It's hard not to see this as problematic. Demand for the product is going up, but there is no ability to capture this in pricing power. Their product's price appears to be falling, suggesting margin shrinking. Furthermore their input prices appear to be going up. Not a happy combination for growing profits, or growing positive cash flows.

Doesn't look cheap enough to tempt me.

dealtn wrote:

idpickering wrote:Pre-close statement

...

Corrugated box volumes in and throughout Q2 have returned to growth ... The regional trends described in September have also continued, with positive corrugated box growth seen in both Europe and the US... 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 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.

It's hard not to see this as problematic. Demand for the product is going up, but there is no ability to capture this in pricing power. Their product's price appears to be falling, suggesting margin shrinking. Furthermore their input prices appear to be going up. Not a happy combination for growing profits, or growing positive cash flows.

Doesn't look cheap enough to tempt me.

Me neither, although I have held these in the past. I shall watch with interest, although only a passing one.

Ian.

So you have got rid of yours, Ian? I must have missed that. How long did you hold them? It doesn't seem long since you bought but time flies. I've still got mine, though showing a loss of course. I really thought they would do well with the increase in deliveries, many of which are in boxes unnecessarily large for the product. However, they are probably not often corrugated so maybe that's where the problem lies if that is their main line. One of the many of my loss-making holdings I don't know what to do about. I can't help feeling it must be a management issue.

Bouleversee wrote:So you have got rid of yours, Ian? I must have missed that. How long did you hold them? It doesn't seem long since you bought but time flies. I've still got mine, though showing a loss of course. I really thought they would do well with the increase in deliveries, many of which are in boxes unnecessarily large for the product. However, they are probably not often corrugated so maybe that's where the problem lies if that is their main line. One of the many of my loss-making holdings I don't know what to do about. I can't help feeling it must be a management issue.

One of my better purchases 212% gain as of yesterday, XIRR shows 24.4%pa returns. Mostly purchased 2008, sold the rights in 2012 (the performance would have been even better if I'd taken them up, but no cash available) but did top up in the rights issue of 2018.

ReallyVeryFoolish wrote:So, the broader market is up around 2 pet cent today. DS Smith? Down slightly. I would have thought confirmation of dividend payment would be good news? I really don't understand the market with respect to this share.

I don't understand the market at all.

I had just read that and was about to post on it. How reliable is the current Tempus though? Short term the market usually moves in the opposite direction to his recommendations. Let's hope he's right this time

I suspect the problem here is their comment that they continue to see year on year modest price deflation. That would indicate that there is not much of a moat and their margins, as dealtn said, may be under some pressure.

Also from their comments it seems to me that they will probably pay at least a modest dividend. It would surely take a major change in their outlook for them not now to pay one but I think I can do without them.

Dod

I would have expected them to go up as a result of Covid and down when a solution seems to be in the offing. Shows how little I understand about the stockmarket.

ReallyVeryFoolish wrote:[Anyone heard anything about the previously announced dividend resumption?

Not since the reiteration 7 days ago :

viewtopic.php?p=352848#p352848

ReallyVeryFoolish wrote:... Maybe I am being just too impatient wanting to understand what SMDS will pay and when for it's next dividend.

Their pre-close statement https://www.investegate.co.uk/smith--ds ... 00060159E/ that reiterated their intention to pay an interim dividend also gave their intended interim results date: December 10th. I'd expect that to be the date they say how much and when they'll pay.

Looking at their table of dividends paid in https://www.dssmith.com/investors/share ... /dividends, it looks as though their past habit has been to pay their interim dividend on the first working day of May and their final dividend on the first working day of November, so if they stick to that pattern, when is Tuesday 4th May 2021 (the preceding three days being a bank holiday weekend). No guarantees they'll stick to the pattern, of course, but the signs are that holding one's breath waiting for the dividend payment is not a good idea!

Gengulphus

Interims here;

https://www.dssmith.com/contentassets/8 ... c-2020.pdf

https://www.bbc.co.uk/news/business-55878062

Of relevance to SMDS who are referenced. The recycling issue makes sense and is clearly an issue for SMDS.

Best wishes,

Steve

Bloomberg article:

https://www.bloombergquint.com/business ... l-ds-smith

From the Bloomberg article linked above

"Mondi shares rose as much as 0.7%."..... a full 0.7%?..!

Both have gone down a bit now. I hold both and don't know enough about either to know which I'd prefer to do the taking over. I think Smiths have been hampered by the lack of cardboard from recycling. I wonder how many companies are competing for that other than Smiths.

Are either of them worth topping up at this stage? Will as many boxes be required once things get back to normal or will everyone be going to the shops again? I wonder where Amazon gets its boxes.

Thanks, RVF. If that's the case, I'm surprised Smith's s.p. hasn't rocketed more this year. No wonder they are rumoured to be a t/o target. I shouldn't have thought they would want to be taken over, however.

Perhaps we should all put an item on our local newsletter encouraging people to recycle their boxes.

I'm not sure I'd agree with you there. People like the desperate wine merchant might pay a very high price for boxes once or twice in an emergency but if the cost of boxes eats into the profits of the manufacturer, that wouldn't work long term. And the profits of the box makers will be limited if they can't get the raw materials to make enough boxes in the first place. The raw materials issue needs addressing. I never cease to be amazed by the huge amount of flattened boxes put out for collection on the cobbled entrance drive of my neighbours opposite, often left to soak in the rain. I hope they can still be recycled. If sufficient boxes can't be supplied, people will have to start shopping again where possible.

Bouleversee wrote:Both have gone down a bit now. I hold both and don't know enough about either to know which I'd prefer to do the taking over. I think Smiths have been hampered by the lack of cardboard from recycling. I wonder how many companies are competing for that other than Smiths.

Are either of them worth topping up at this stage? Will as many boxes be required once things get back to normal or will everyone be going to the shops again? I wonder where Amazon gets its boxes.

Smiths run recycling of cardboard and Board, so if anyone is short, it shouldn't be them.

TJH