Packaging stocks surge, FTSE 100 higher
Underwhelming results from Amazon as consumers begin to rein in online purchases failed to knock London-listed packaging giants out of their stride today.
Shares in Mondi, Smurfit Kappa and DS Smith were 3% higher in the FTSE 100 index as investors focused on their progress in offsetting sharply higher costs.
Dublin-based Smurfit reported a 33% rise in revenues and earnings for the first quarter and told investors today that demand continued to be good while it recovers cost and other supply chain pressures through higher prices.
Chief executive Tony Smurfit said the quarter had presented significant operational challenges: “Practically all input costs have risen sharply and already tight markets and supply chains have been exacerbated by the war in Ukraine.”
Smurfit lifted 89p to 3360p, Mondi added 55p to 1516p and DS Smith rose 8.6p to 334.2p following the update, which came a few hours after internet giant Amazon had given a sales forecast below Wall Street’s expectations for the second quarter.
Amazon shares reversed 9% in extended trading, although earlier strength for the Nasdaq ensured London’s FTSE 100 index found positive territory today.
Ocado and tech investor Scottish Mortgage were both 3% higher as the top flight ended a volatile April with a rise of 21.85 points to 7531.04, aided by a UK corporate results season that has largely avoided major scares.
One sector showing resilience has been building supplies after reassuring updates today from Travis Perkins, roofing firm SIG and insulation business Kingspan.
Interest in energy efficiency projects boosted Toolstation owner Travis as sales rose 13.6% in the first quarter and it reported “manageable” levels of cost inflation.
Shares dipped 16.5p to 1250.5p despite broker Peel Hunt’s 1850p target price. Kingspan fared better, lifting 4% on optimism for the current quarter based on a strong order backlog and “decent activity” in most markets.
SIG took top billing, however, as it reported a 25% jump in like-for-like sales for the March quarter, well ahead of previous expectations. Shares surged 14% or 5.15p to 41.9p.
The FTSE 250 index rose more than 1%, up 241.88 points to 20,861.50, with Dr Martens and Marshalls among the stocks 4% higher. Clean air firm Johnson Matthey jumped 24% or 430.5p to 2302p as it emerged that New York-based Standard Investments had built a 5% stake in the former blue-chip company.
The shares are back where they were in November, when investor confidence was shaken by a surprise decision to pull out of the battery materials sector in favour of a pivot towards green economy technologies including hydrogen.
