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Smiths News (LSE: SNWS)

Currency in GBP

Last close As at 30/11/2023

GBP0.48

▲ 1.40 (3.04%)

Market capitalisation

GBP118m

Smiths News is the UK’s largest newspaper and magazine distributor with a c 55% market share covering 24,000 retailers in England and Wales. It has a range of long-term exclusive distribution contracts with major publishers, supplying a mix of supermarkets and independent retailers.

Volumes of newspaper and magazine sales have been falling at an average rate of c 5% pa for many years as first TV and radio and then online have taken over as the primary source of news consumption by an increasingly younger audience. Cover price inflation has partially offset lost revenue, but Smiths News has had to, and continues to, cut costs repeatedly to make up the shortfall. These characteristics are likely to persist into the future, but Smiths is developing new revenue streams to offset these pressures.

Latest Insights

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Industrials | Update

Smiths News — Expansion initiatives begin to blossom

Industrials | Flash note

Smiths News — Resilient performance despite headwinds

Industrials | Update

Smiths News — Interim profits exceed pre-COVID levels

Industrials | Update

Smiths News — Contract renewals cement future cash flows
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Sector

Industrials

Equity Analyst

Natalya Davies

Natalya Davies

Analyst

Key Management

  • David Blackwood

    Chairman

  • George Cooper

    Head of corporate and finance

  • Jonathan Bunting

    CEO

  • Paul Baker

    CFO

Balance Sheet

Forecast net debt (£m)

8.1

Forecast gearing ratio (%)

270

Share Price Performance

Price Performance
% 1M 3M 12M
Actual (0.4) 12.8 14.2
Relative (3.2) 13.4 16.0
52 week high/low 57.6p/40.4p

Financials

The FY23 results highlight continued growth in adjusted operating profit, management’s tight control of the business and the ongoing annual efficiencies being delivered. Smiths may also renew several long-term publisher contracts this year, which could imply visibility over at least 80% of annual revenues to 2029. Furthermore, development of new profit streams is beginning to create momentum, which may have the potential to more than offset the slow decline in core profits and support the dividend. Our valuation remains unchanged at 89p, representing c 90% upside.

Y/E Aug Revenue (£m) EBITDA (£m) PBT (£m) EPS (fd) (p) P/E (x) P/CF (x)
2022A 1089.3 42.9 32.3 11.03 4.3 N/A
2023A 1091.9 42.7 33.4 10.68 4.4 N/A
2024E 1026.4 42.1 33.4 10.28 4.6 N/A
2025E 995.6 41.8 33.3 10.24 4.6 N/A

Research

Flash note

Industrials

Smiths News — Resilient performance despite headwinds

Update

Industrials

Smiths News — Interim profits exceed pre-COVID levels

Industrials

Update

Smiths News — Expansion initiatives begin to blossom

Update

Industrials

Smiths News — Contract renewals cement future cash flows

edison tv

Industrials

Smiths News – executive interview

Update

Industrials

Smiths News — Better FY22 than expected; 10% dividend yield

Update

Industrials

Smiths News — Sub 3x P/E and a 15% dividend yield

edison tv

Industrials

Smiths News – ETV: Cash flow begins to open up future options

Update

Industrials

Smiths News — Strong results, debt falling rapidly

Initiation

Industrials

Smiths News — Predictable cash flows and growing dividends

edison tv

Industrials

Smiths News – Disconnecting from the past and embracing an exciting future
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Thematics

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