Smiths News beats full-year market expectations
By Josh White
Date: Tuesday 05 Nov 2024
(Sharecast News) - Smiths News announced a strong set of full year results on Tuedsay, surpassing market expectations.
The London-listed company said revenue increased 1.1% year-on-year to reach £1.104bn for the 53 weeks ended 31 August, aided by strong sales during the men's UEFA European Championships and an additional trading week.
Its adjusted operating profit also rose slightly, to £39.1m, supported by operational efficiencies that delivered £5.6m in cost savings.
In a significant move, Smiths News reduced its average bank net debt by 53% to £11.7m.
Following a debt refinancing in May, the company said it now had a lower interest burden and greater flexibility in capital allocation.
Reflecting its confidence, Smiths News proposed a total ordinary dividend of 5.15p per share, alongside a special dividend of 2p per share, marking a 72% increase over the 2023 financial year.
Smiths News also secured 91% of its publisher revenue streams under long-term agreements until 2029, reinforcing the resilience of its core news and magazine business.
The company said it was advancing growth initiatives that leveraged its strengths in warehousing, logistics, and high-density UK delivery networks.
Programmes such as Smiths News Recycle had shown encouraging results, contributing £2m in operating profit for the financial year.
Looking ahead, Smiths News said it remained focused on achieving annual cost savings of around £5m.
A three-year internal investment programme was underway to support both the company's core offerings and future growth opportunities.
With a solid start to the new year, Smiths News reiterated its positive outlook, and was confident in meeting market expectations for continued performance in the 2025 period.
"Our performance over the 2024 financial year reflects the resilience of our news and magazines business and impact of our cost efficiency initiatives," said chief executive officer Jonathan Bunting.
"The refinancing agreement announced in May removes restrictions on shareholder returns and also enables internal investment to support both our news and magazines business and our growth plans.
"Our growth programme is centred around Smiths News's asset-light, flexible cost base and our established competencies across reverse logistics, warehousing and early morning final mile services."
Bunting said that positioned the firm well to drive profitability from complementary market opportunities in growth areas such as recycling, final mile and warehousing verticals.
"We have today announced both a final ordinary dividend of 3.4p per share, and a further special dividend of 2p per share - this means that we propose to return over £17.2m to our shareholders in respect of 2024.
"In summary, Smiths News is well placed to continue to deliver a resilient performance over the medium term.
"Meanwhile, the combination of the recently announced investment programme and dividend policy demonstrates our ability to meet the ongoing needs of the business while providing attractive cash returns to shareholders."
At 0905 GMT, shares in Smiths News were up 6.89% at 60.93p.
Reporting by Josh White for Sharecast.com.
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