Last close As at 06/08/2026
GBP0.73
▲ 1.00 (1.39%)
Market capitalisation
GBP179m
Research: Industrials
Smiths News’ FY24 trading was robust and results came in ahead of consensus. This, along with the debt refinancing announced in May, has resulted in lower average debt, which in turn has allowed the company to implement its revised capital allocation policy (communicated in May) and its diversification ambitions. Furthermore, it has lifted its total ordinary dividend from 4.15p to 5.15p/share and announced a ‘special’ dividend of a further 2.0p/share.
Smiths News |
FY24 trading good, special dividend proposed |
FY24 results |
Industrials |
5 November 2024 |
Share price performance
Business description
Analyst
Smiths News is a research client of Edison Investment Research Limited |
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Smiths News’ FY24 trading was robust and results came in ahead of consensus. This, along with the debt refinancing announced in May, has resulted in lower average debt, which in turn has allowed the company to implement its revised capital allocation policy (communicated in May) and its diversification ambitions. Furthermore, it has lifted its total ordinary dividend from 4.15p to 5.15p/share and announced a ‘special’ dividend of a further 2.0p/share.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
08/23 |
1,091.9 |
33.4 |
11.3 |
4.2 |
5.1 |
7.3 |
08/24 |
1,103.7 |
34.1 |
10.6 |
7.2 |
5.4 |
12.5 |
08/25e |
1,038.0 |
35.0 |
11.1 |
5.3 |
5.1 |
9.3 |
08/26e |
1,006.8 |
35.0 |
11.1 |
5.3 |
5.1 |
9.3 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Smiths News’ FY24 results were ahead of market expectations, with adjusted operating profit coming in at £39.1m, £0.3m ahead of last year and £0.9m ahead of market consensus. Key elements of the better result were the 53rd week of trading, the contribution from sales of the men’s UEFA European Championship sticker collections and a £2.0m (FY23: £0.7m) contribution from organic, low-risk growth initiatives. Cost savings of £5.6m offset inflationary pressures across the business.
Average net debt continued to fall, from £25.0m to £11.7m, and along with the refinancing completed in May, led to lower interest costs in the year. The refinancing also removed the £10m pa dividend cap, which has allowed Smiths News to implement a revised capital allocation policy. The new policy includes: 1) the maintenance of a strong balance sheet (bank net debt to bank EBITDA of less than 1x, currently 0.3x), 2) continued investment in news and magazines as well as organic growth initiatives, 3) the payment of a sustainable 2x covered ordinary dividend, 4) a disciplined approach to bolt-on acquisitions, and 5) further returns to shareholders as appropriate.
To this end, Smiths News will propose a total ordinary dividend for the year of 5.15p/share (cost £12.8m), plus a 2.0p/share ‘special’ dividend (cost £5.0m), bringing the total dividend payable for the year to 7.15p/share.
Overall revenue was £1,103.7m, up 1.1% y-o-y, but excluding 1.9% that related to the 53rd week implies a decline of 0.8%, which is better than the long-run average decline of 3–5% pa. Excluding the additional week, newspaper revenue was up 1%, driven by new contracts and cover price rises, offset by volume decline. In magazines, revenue fell 3.2% on a similar basis, again outperforming the 10-year average decline of 6% pa.
Following the signing of numerous publisher agreements in recent periods, Smiths News now has c 91% of revenues renewed until 2029 and can look forward to relative stability in the core business, with exciting potential in the growth initiatives. Our forecasts are under review following the results and the changes to National Insurance outlined in last week’s budget.
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