STOCKS NEWS EUROPE-DS Smith boosted by strong update on SCA deal

Shares in DS Smith rise as much as 6 percent to their highest in more than fifteen years after the British packaging maker says it expects to save more than previously thought from its acquisition of the recycled packaging business of Svenska Cellulosa Aktiebolaget (SCA) .

"Overall the update is much better than we expected, and we had reasonably bullish expectations," Investec Securities analyst Chris Dyett says in a note to clients.

"The positivity all relates to what the combined group is able to achieve in cost and cash terms over the next three years, plus lower interest and tax assumptions."

As a result of the better than expected savings from the deal, Dyett says he is likely to increase his earnings per share estimate for 2013 and 2014 by 9 percent to 15.5 pence and 13 percent to 21 pence, respectively.

DS Smith reported earnings of 12.8 pence for its latest year ended April 30 2012.

JPMorgan analysts call the update from the company a "positive start to married life" and raise their earnings per share estimates for 2013 and 2014 by 6 percent and 9 percent, respectively.

"In our opinion, DS Smith is laying strong foundations for sustainable above-trend earnings growth and enhanced returns on investment," the analysts say in a note.

For more on DS Smiths' update, click on To see a statement, please click on Reuters messaging rm://abhishek.takle.thomsonreuters.com@reuters.net