Cantillon: New business package from Tony Smurfit?

Wednesday's third-quarter results presentation by Smurfit Kappa Group (SKG) will be the first public outing of the new chief executive, Tony Smurfit, son of Michael Smurfit, who led the company until 2002 when it was bought by private equity.

Analysts will watch to see if Smurfit set a new direction for the packaging giant, where he served as chief operating officer under Gary McGann until the end of August.

Observers will be particularly interested in picking up hints about whether he will go after acquisitions more aggressively than his predecessor did in the last few years. Is it ready to come out and rumble again?

The fortunes of SKG over the last decade provide a salutary lesson in how a company can be hamstrung by high debt. Denis O'Brien and Paul Coulson, both of whom pulled IPOs recently, are also familiar with how market sentiment can turn against highly leveraged businesses.

SKG debts touched €6 billion at one stage, and investors cast it out as leverage went out of fashion. When it floated in 2007 at €16.50, little did it know that one year and one financial crisis later, it would trade at barely over €1 a share.

SKG, however, knuckled down impressively, knocked a couple of billion off its debts and is now throwing off large amounts of cash with a relatively conservative balance sheet.

It is hardly Smurfit’s fault, but the company’s share price took another little tumble in the months either side of McGann’s departure, although it has recovered in the last two weeks.

Are investors anxious to see which way the new guy takes things? Smurfit can either choose to buy growth by pumping up the balance sheet once more or he may choose to sweat the existing assets, maximise cash and return it to shareholders in dividends.

He worked closely with McGann and Ian Curley in recent years, so don't expect a radical departure. But Smurfit must surely be tempted to implement at least a slight change in emphasis, to announce his arrival if nothing else.