Smiths News (SNWS) H1 2025 earnings summary

Executive summary

• Interim results for HY2025 show revenue of £536.4m, operating profit up 3.2% to £19.4m, and strong cash flow, with performance in line with FY2025 expectations.

• Strategic focus remains on leveraging the core news and magazine business while expanding into recycling, new categories, and final mile growth verticals, supported by internal investment in warehouse management.

• 91% of publisher revenue streams are secured through 2029, providing medium-term revenue assurance.

• Free cash flow rose to £13.3m, and interim dividend maintained at 1.75p per share.

• Board changes include a new non-executive director, CFO transition, and a new Managing Director for Recycling.

Financial highlights

• Adjusted revenue for H1 2025 was £536.4m, down 0.6% year-over-year, outperforming guidance of a 3-5% decline.

• Adjusted operating profit rose by £0.6m to £19.4m (+3.2%), with adjusted EPS up 10.2% to 5.4p.

• Free cash flow increased to £13.3m from £4.2m year-over-year, driven by improved working capital and one-off inflows.

• Average net debt reduced by £11.4m to £1.1m, with bank net debt at period end of £12.4m.

• Interim dividend of 1.75p per share approved, in line with last year.

Outlook and guidance

• Full-year results expected to be in line with market expectations, underpinned by stable news and magazines performance.

• Cost efficiency program on track to deliver c.£5m in annual savings, with inflationary wage pressures expected in H2.

• Continued investment in technology and infrastructure to support future growth.

• Growth initiatives in recycling, new product categories, and final mile services to be further advanced and updated at year-end.