Tony Smurfit seeks ‘evolution, not revolution’ at group

Tony Smurfit, who took over from Gary McGann two months ago as chief executive of Smurfit Kappa packaging group, says he will maintain the same broad strategy fostered by his predecessor, aiming for "evolution, not revolution".

Mr Smurfit, whose father, Michael Smurfit, was previously chief executive, was the chief operating officer under Mr McGann. He said it would be "very strange" if he were to drastically change the company's strategy, as he had worked so closely implementing the strategy of his predecessor.

He said the company was not ready to prioritise returning cash to shareholders over spending it on acquisitions and investing it on improving its operations. “Our owners prefer us to invest in the business for the long-term. If we really had excess cash, we would look at all options. But we are not yet in that position.”

He indicated Smurfit Kappa will continue its policy of seeking out acquisitions annually worth up to €300 million, which he said it is able to finance from its own resources. The company would also consider acquisitions larger than this, although this would mean raising outside funds.

“The important thing is to do the right thing with our capital, and buy at the right price if acquisitions present themselves. We are happy with our pipeline at the moment,” he said.

Mr Smurfit presented the group’s third-quarter results to the end of September, his first major outing as chief executive. Smurfit Kappa reported earnings of €305 million, with underlying growth of about 4 per cent, driven by a strong performance in its Americas division. Growth in Europe was slower, but Mr Smurfit said its performance on the continent was stronger in October and November.