Smiths News (SNWS) H2 2024 earnings summary

Executive summary

• Full-year results exceeded market expectations, driven by improved news and magazine revenue, growth activities, and a flexible, asset-light model, with over 90% of publisher revenues secured until at least 2029, providing medium-term stability.

• Growth initiatives, including recycling and new B2B delivery categories, contributed £2 million in profit and are expanding.

• Strategic focus is on consolidating a leading position in early-morning end-to-end supply chain solutions, leveraging established expertise and network.

• Proposed total dividends for FY2024 are 7.15p, up 72% year-over-year, including a special dividend.

Financial highlights

• Revenue increased 1.1% year-over-year to £1,103.7 million, aided by the Men's European Football Championships, new contracts, and a 53rd trading week.

• Adjusted operating profit rose by £0.3 million to £39.1 million; adjusted EPS fell by 0.5p to 10.3p due to a higher UK tax rate.

• Free cash flow was £7.3 million, £14.5 million lower than last year, mainly due to a £15.7 million outflow in the 53rd week.

• Average bank net debt reduced 52.5% year-over-year to £11.7 million.

• Ordinary dividend per share increased 24% to 5.15p, with a special dividend of 2.0p.

Outlook and guidance

• Trading in the new financial year is in line with market expectations.

• 91% of publisher revenues are secured until 2029, supporting proactive investment in growth and operational excellence.

• Ongoing cost-out and efficiency programs and a three-year investment plan are underway to support both core and growth activities.

• Refinancing agreement provides flexibility for revised capital allocation and supports ongoing investment.