Smiths News — Interim profits exceed pre-COVID levels

Smiths News (LSE: SNWS)

Last close As at 18/05/2024

GBP0.65

1.40 (2.22%)

Market capitalisation

GBP160m

More on this equity

Research: Industrials

Smiths News — Interim profits exceed pre-COVID levels

The interim H123 results highlight continued growth in adjusted operating profit, management’s solid control of the business and the ongoing annual efficiencies being delivered. Furthermore, development of new profit streams are beginning to create momentum, which we expect should offset the anticipated decline in core revenues and support the payment of the dividend. This follows the signing of numerous long-term publisher contracts recently, which collectively account for 65% of current revenues. Additional contract renewals could be secured this year. These renewals bolster the company’s cash-generative business model, providing a steady stream of revenue up to 2029 or 2030. Our valuation remains unchanged at 89p, representing c 80% upside.

Andy Murphy

Written by

Andy Murphy

Director, Financials & Industrials

Industrials

Smiths News

Interim profits exceed pre-COVID levels

Interim results

Industrial support services

9 May 2023

Price

52p

Market cap

£129m

Net debt (£m) at 28 February 2023

22.9

Shares in issue

247.7m

Free float

88.5%

Code

SNWS

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

4.1

7.2

39.4

Rel (local)

3.0

10.7

37.6

52-week high/low

58p

28p

Business description

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.

Next events

Year-end trading update

August

Preliminary results

November

Analyst

Andy Murphy

+44 (0)20 3077 5700

Smiths News is a research client of Edison Investment Research Limited

The interim H123 results highlight continued growth in adjusted operating profit, management’s solid control of the business and the ongoing annual efficiencies being delivered. Furthermore, development of new profit streams are beginning to create momentum, which we expect should offset the anticipated decline in core revenues and support the payment of the dividend. This follows the signing of numerous long-term publisher contracts recently, which collectively account for 65% of current revenues. Additional contract renewals could be secured this year. These renewals bolster the company’s cash-generative business model, providing a steady stream of revenue up to 2029 or 2030. Our valuation remains unchanged at 89p, representing c 80% upside.

Year

end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

08/21

1,109.6

31.9

11.3

1.5

4.6

2.9

08/22

1,089.3

32.3

11.7

4.2

4.5

8.0

08/23e

1,056.6

33.1

11.0

4.2

4.7

8.0

08/24e

1,024.9

33.5

10.8

4.2

4.8

8.0

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Strong interim results underpin FY23 consensus

Smiths News reported revenue growth of 1% to £550.1m in H1, driven by inflation-related price increases in newspapers in particular and revenue from one shot and ancillary sales. Adjusted operating profit rose 6.8% y-o-y to £20.4m, benefiting from the revenue growth trends, and operational efficiencies that continue to target savings of c £4–5m pa. The operating margin edged up 20bp to 3.7%. Adjusted EPS rose 9.8% to 5.6p and the company declared a 1.4p dividend, in line with both last year and the maximum payable under current banking facilities. Net debt at the half year fell 41% to £22.9m, while average net debt fell 55.3% to £26.3m.

New profit streams begin to make contribution

Smiths News recently trialled a service collecting waste cardboard and plastic for recycling at the same time as delivering the day’s newspapers and magazines. The trial was successful and is now being rolled out nationally. We anticipate that the service might be suitable for c 30% of its addressable customer base of c 12,000 retailers. Another successful trial includes the distribution of DVDs and books to major retailers and some supermarkets. There are potentially other products and/or customers where this kind or service may offer value to clients and a profit contribution to Smiths, which could offset the expected decline in the core business.

Valuation: DCF valuation unchanged at 89p

Our underlying estimates are unchanged and we therefore also retain our DCF valuation of Smiths News at 89p/share, representing c 70% upside to the current share price. The company trades on P/E multiples of 4.7x in FY23e and 4.8x in FY24e, which we believe are attractive for a company with such cash-generative characteristics. It also yields 8.0% from a dividend that is more than twice covered by earnings.

Real signs of strategic success

Growth in revenue, and especially continued growth in adjusted operating profit, highlights management’s solid control of the business and the ongoing annual efficiencies that are being delivered. These robust results follow the signing of numerous long-term publisher contracts recently, which collectively account for 65% of current revenues. Additional contract renewals could be secured this year. Furthermore, development of new profit streams, although modest in size so far, are beginning to create momentum across the group that should contribute profits that can offset anticipated declines in core revenue and support the payment of the dividend, which itself gives rise to an attractive 8.0% yield. Our full year forecasts are unchanged and we retain our 89p valuation.

First period of revenue and profit growth since H221

Smiths News reported revenue growth of 1% to £550.1m in H1, the first period of growth since H221, which was the COVID-19 recovery period. Revenue growth was driven by inflation-related price increases in newspapers in particular and revenue from one shot and ancillary sales. Adjusted operating profit rose 6.8% y-o-y to £20.4m, benefiting from the revenue growth trends, as well as the well-rehearsed operational efficiencies that continue to target annual savings of c £4–5m pa. The operating margin edged up 20bp to 3.7% (discussed further below).

Adjusted EPS rose 9.8% to 5.6p and the company declared a 1.4p dividend, in line with both last year and the maximum payable under current banking facilities. Net debt at the half year fell 41% to £22.9m, while average net debt fell 55.3% to £26.3m.

Exhibit 1: H1 summary results

£m

FY21

H122

H222

FY22

H123

Total revenue

1,109.6

544.8

544.5

1,089.3

550.1

% change

-4.7%

-1.2%

-2.4%

-1.8%

1.0%

Cost of goods sold

(1,036.2)

(508.0)

(508.6)

(1,016.6)

(512.4)

% change

-5.1%

-1.5%

-2.2%

-1.9%

0.9%

Gross profit

73.4

36.8

35.9

72.7

37.7

Gross margin

6.6%

6.8%

6.6%

6.7%

6.9%

Total admin expenses

(33.9)

(17.9)

(17.1)

(35.0)

(17.4)

% change

-11.0%

5.9%

0.6%

3.2%

-2.8%

Income from JV

0.1

0.2

0.1

0.3

0.1

Total adjusted operating profit

39.6

19.1

19.0

38.1

20.4

% change

12.8%

1.1%

-8.2%

-3.8%

6.8%

Total adjusted operating profit margin

3.6%

3.5%

3.5%

3.5%

3.7%

Source: Smith News and Edison Investment Research

In the period, overall newspaper revenue grew 0.5%, which included c 1.5% of one-off revenue from sports events income such as the World Cup, Pokemon sticker collections and from other news (Royal family) events. It also benefited from 27 publisher price increases in the period, some of which are expected to annualise in H2 and into the next financial year. Newspaper volumes fell faster than the typical c 3–5% as a result, but with fewer price rises expected in H2, management expects volume declines to return to within the historical range. In magazines, revenue fell by 6.1%, which is around the expected rate of decline, while revenue from one-shots grew 88% from a small base.

Management drives profits back above pre-COVID levels

Exhibit 2 below highlights the result of strong management control over costs over the last three years. In H120, the pre-COVID comparable period, Smiths News reported an adjusted operating profit of £19.9m. In the following period, operating profit was hit by the impact of lock-down, dropping to £18.7m. Since then, Smiths News has reported profit growth in each period, culminating with H123 profits of £20.4m, c £0.5m ahead of the H120 figure.

This robust performance is accompanied by margin progression in each period, including H121 when volumes were under pressure. We believe this result is evidence of good cost control, operational efficiencies and the development of new profit streams.

Exhibit 2: Adjusted operating profit and operating margin

Source: Smiths News and Edison Investment Research

Examples of new profit streams

In November 2022, Smiths News outlined its ambition to better utilise its distribution network to generate new profit streams to offset the anticipated annual decline in newspaper and magazine distribution volumes. We believe this makes practical and commercial sense considering that its 36 depots in the UK are idle for long periods each day, and that its vans are visiting each of the company’s 19,000 customers every day.

Exhibit 3: Smiths News’ distribution network

Exhibit 4: Potential new profit streams

Source: Smiths News

Source: Smiths News

Exhibit 3: Smiths News’ distribution network

Source: Smiths News

Exhibit 4: Potential new profit streams

Source: Smiths News

Smiths News recently trialled a cardboard and plastic recycling collection service in Birmingham. The service includes the collection of unwanted cardboard and plastics at the same time as dropping off the day’s newspaper and magazine delivery. The trial was successful and is now being rolled out nationally. So far, c 1,900 independent customers have signed up and this number is growing c 100 per week. We anticipate that the service might be suitable for c 30% of its addressable customer base.

Another successful trial includes the distribution of DVDs and now books to major retailers and some supermarkets. The product is delivered to Smiths in bulk where it breaks the supply down, picks, packs and handles returns, playing to the company’s core strengths. There are potentially other products and/or customers where this kind or service may offer value to clients and income and a profit contribution to Smiths News, which could offset the expected decline in the core business. These are being actively explored.

Valuation of 89p offers c 70% upside

Following the interims and the company’s in-line outlook statement, we see no reason at this stage to revise our estimates, though the better-than-expected H1 performance suggests to us that the balance of risks is to the upside. However, there are potential headwinds such as inflationary pressure and potential volume impacts from publisher price rises that give rise to caution at this time. We have, however, introduced FY25 forecasts for the first time that assume a continuation of revenue declines of c 3% pa, offset by cost savings, thus resulting in largely flat full year profits.

Our DCF valuation remains unchanged at 89p/share, representing c 70% upside to the current share price. Smiths News trades on a P/E of 4.7x in FY23e, with a yield of 8.0% and the prospect of special dividends to bolster the yield as debt falls. In our experience, when ‘safe’ dividend yields exceed P/E ratios in absolute terms, it indicates a value opportunity. The low P/E rating might be explained by market expectations of continued revenue declines. Our DCF valuation assumes 5% pa revenue declines. A full explanation of our assumptions can be found here.


Exhibit 5: Financial summary

£m

2019

2020

2021

2022

2023e

2024e

2025e

Year end 31 August

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

1,303.5

1,164.5

1,109.6

1,089.3

1,056.6

1,024.9

994.2

Cost of Sales

(1,217.5)

(1,091.4)

(1,036.2)

(1,016.6)

(985.2)

(954.8)

(925.3)

Gross Profit

86.0

73.1

73.4

72.7

71.4

70.2

68.9

EBITDA

 

 

60.1

40.4

44.9

42.9

43.2

42.9

42.6

Normalised operating profit

 

 

44.0

35.4

40.6

39.3

39.3

39.0

38.7

Share-based payments

(0.4)

(0.3)

(1.0)

(1.2)

(1.2)

(1.2)

(1.2)

Total adjusted operating profit

43.6

35.1

39.6

38.1

38.1

37.8

37.5

Amortisation of acquired intangibles

(0.1)

(0.2)

0.0

(4.4)

0.0

0.0

0.0

Exceptionals

(7.2)

(7.8)

(1.9)

(2.5)

(0.4)

(1.0)

(1.0)

Impairment

0.0

(6.0)

(1.6)

1.2

0.0

0.0

0.0

Other financial costs

0.0

0.9

3.5

2.5

0.0

0.0

0.0

Other

0.0

0.0

(0.3)

0.0

(0.6)

0.0

0.0

Reported operating profit

36.3

22.0

39.3

34.9

37.1

36.8

36.5

Net Interest

(6.0)

(7.2)

(8.7)

(7.0)

(6.2)

(5.5)

(5.3)

Profit Before Tax (norm)

 

 

38.0

28.2

31.9

32.3

33.1

33.5

33.4

Profit Before Tax (reported)

 

 

30.3

14.8

30.6

27.9

30.9

31.3

31.2

Reported tax

(8.4)

(2.8)

(4.3)

(4.5)

(6.8)

(7.8)

(7.8)

Profit After Tax (norm)

29.6

25.4

27.6

27.8

26.3

25.7

25.6

Profit After Tax (reported)

21.9

12.0

26.3

23.4

24.1

23.5

23.4

Discontinued operations

(53.4)

(18.7)

(0.1)

0.0

0.0

0.0

0.0

Net income (normalised)

29.6

25.4

27.6

27.8

26.3

25.7

25.6

Net income (reported)

(31.5)

(6.7)

26.2

23.4

24.1

23.5

23.4

Basic average number of shares outstanding (m)

246

245

244

239

239

239

239

EPS - basic normalised (p)

 

 

12.01

10.39

11.33

11.66

11.03

10.76

10.72

EPS - diluted normalised (p)

 

 

11.98

10.28

10.83

11.03

10.53

10.28

10.24

EPS - basic reported (p)

 

 

(12.78)

(2.74)

10.76

9.81

10.11

9.84

9.80

Dividend (p)

1.00

0.00

1.50

4.15

4.15

4.15

4.15

Revenue growth (%)

#DIV/0!

(-10.7)

(-4.7)

(-1.8)

(-3.0)

(-3.0)

0.0

Gross Margin (%)

6.6

6.3

6.6

6.7

6.8

6.8

6.9

EBITDA Margin (%)

4.6

3.5

4.0

3.9

4.1

4.2

4.3

Normalised Operating Margin

3.4

3.0

3.7

3.6

3.7

3.8

3.9

BALANCE SHEET

Fixed Assets

 

 

31.5

66.5

47.1

41.9

34.4

26.0

17.2

Intangible Assets

10.1

4.0

2.3

1.7

1.7

1.7

1.7

Tangible Assets

10.9

9.4

9.4

8.6

7.5

5.5

3.1

Investments & other

10.5

53.1

35.4

31.6

25.5

18.5

12.1

Current Assets

 

 

181.2

165.9

139.1

147.5

145.2

141.9

138.7

Stocks

16.2

14.1

13.2

15.6

14.8

14.3

13.9

Debtors

124.2

101.2

106.6

95.7

95.1

92.2

89.5

Cash & cash equivalents

24.0

50.6

19.3

35.3

35.3

35.3

35.3

Other

16.8

0.0

0.0

0.9

0.0

0.0

0.0

Current Liabilities

 

 

(229.7)

(283.9)

(167.5)

(157.2)

(151.1)

(126.6)

(120.3)

Creditors

(173.7)

(139.5)

(136.5)

(140.3)

(134.2)

(109.7)

(103.4)

Tax and social security

0.0

(1.7)

(0.3)

0.0

0.0

0.0

0.0

Short term borrowings

(46.1)

(130.1)

(21.2)

(8.0)

(8.0)

(8.0)

(8.0)

Other

(9.9)

(12.6)

(9.5)

(8.9)

(8.9)

(8.9)

(8.9)

Long Term Liabilities

 

 

(57.3)

(30.1)

(76.4)

(64.2)

(46.6)

(46.1)

(26.6)

Long term borrowings

(49.3)

0.0

(50.1)

(39.1)

(27.5)

(33.0)

(18.5)

Other long term liabilities

(8.0)

(30.1)

(26.3)

(25.1)

(19.1)

(13.1)

(8.1)

Net Assets

 

 

(74.3)

(81.6)

(57.7)

(32.0)

(18.1)

(4.8)

9.0

CASH FLOW

Op Cash Flow before WC and tax

60.1

40.4

44.9

42.9

43.2

42.9

42.6

Working capital

(3.9)

(5.3)

(1.8)

2.8

(4.7)

(21.2)

(3.1)

Exceptional & other

(7.7)

(13.4)

(1.3)

(4.4)

(2.2)

(2.2)

(2.2)

Tax

(2.6)

0.0

(6.3)

(5.3)

(6.8)

(7.8)

(7.8)

Other

(22.9)

1.7

5.9

13.8

6.9

6.9

6.9

Net operating cash flow

 

 

23.0

23.4

41.4

49.8

36.4

18.5

36.4

Capex

(8.1)

5.3

(2.4)

(1.9)

(4.2)

(4.2)

(3.2)

Acquisitions/disposals

0.0

(10.2)

6.5

14.0

0.0

0.0

0.0

Net interest

(5.1)

(8.0)

(9.4)

(8.0)

(4.0)

(3.3)

(3.1)

Equity financing

0.0

(0.7)

(2.6)

(2.6)

(0.8)

(0.8)

(0.8)

Dividends

0.1

(2.2)

(1.0)

(5.9)

(9.8)

(9.8)

(9.8)

Other

(2.8)

(15.6)

(5.9)

(6.4)

(6.0)

(6.0)

(5.0)

Net Cash Flow

7.1

(8.0)

26.6

39.0

11.6

(5.6)

14.5

Opening net debt/(cash)

 

 

79.3

72.1

79.7

53.2

14.2

2.6

8.1

FX

0.1

(0.1)

(0.2)

0.0

0.0

0.0

0.0

Other non-cash movements

0.0

0.5

0.1

0.0

0.0

0.0

0.0

Closing net debt/(cash)

 

 

72.1

79.7

53.2

14.2

2.6

8.1

(6.4)

Source: Smiths News and Edison Investment Research

General disclaimer and copyright

This report has been commissioned by Smiths News and prepared and issued by Edison, in consideration of a fee payable by Smiths News. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Smiths News and prepared and issued by Edison, in consideration of a fee payable by Smiths News. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

More on Smiths News

View All

Latest from the Industrials sector

View All Industrials content

Research: Metals & Mining

Wheaton Precious Metals — Q123 in line; looking to H2

Wheaton Precious Metals’ (WPM’s) net earnings for Q123 were US$2.6m (or 2.5%) better than our forecast. In general, production of precious metals was slightly higher than our expectations, but sales, costs and depletion were in line. Our forecasts for FY23 have therefore remained substantially unchanged. However, we note that the broader market appears to be reticent in incorporating higher precious metals prices into its earnings estimates.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free