Smiths News (NWS) remains on track to reduce its reliance on the declining news distribution business. Indeed, chief executive Mark Cashmore said that 27 per cent of the group's half-year underlying pre-tax profit of £24.9m was generated from outside of the newspaper and magazine wholesaling side - up from 17 per cent a year ago - and that Smiths is on target to achieve 50 per cent by 2016.
Smiths delivered profit growth across all four of its divisions, reflecting a mixture of organic growth, acquisitions and cost savings. The Bertrams, the book business, for instance, grew revenue 7 per cent to £98.3m - helped by two deals in the education book market - and profits here rose 7.6 per cent to £3.5m. While educational and care consumable products distributor, The Consortium - acquired in April 2012 - saw like-for-like sales rise 3.3 per cent to £30.5m, with underlying operating profit having jumped 9.1 per cent to £2.9m. Mr Cashmore says The Consortium fits well with Smiths' existing distribution network. News distribution revenues did fall 5 per cent on a like-for-like basis, to £761m, although £4m of cost savings helped divisional underlying profit rise 2.6 per cent to £19.7m.
Broker N+1 Singer expects full-year adjusted pre-tax profit of £50.8m, giving EPS of 20.8p (from 19.3p in 2012).
SMITHS NEWS (NWS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 189p | MARKET VALUE: | £348m | |
| TOUCH: | 188.5-189p | 12-MONTH HIGH: | 194p | LOW: 86p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 12 | |
| NET ASSET VALUE: | * | NET DEBT: | £109m | |
| Half-year to 28 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 893 | 18.8 | 7.6 | 2.8 |
| 2013 | 905 | 19.9 | 7.8 | 3.0 |
| % change | +1 | +6 | +3 | +7 |
Ex-div:12 Jun Payment:12 Jul *Negative equity shareholders' funds | ||||
