Smiths News (LON:SNWS) Releases Earnings Results

Key Points

• In‑line results: Adjusted operating profit was £18.3m and adjusted profit after tax £12.7m with revenues down 3.9%, and management expects full‑year results to be in line with market expectations while approving an interim dividend of £0.0175 per share.
• Strong cash generation and diversification: Free cash flow rose to £21.2m (up £7.9m) with average net cash of £16.2m supporting £16.7m of dividends, while Collectables grew 13.3% and growth verticals rose 35% even though >90% of sales remain newspapers and magazines.
• Pensions regulatory risk: The board is responding to a Pensions Regulator warning over the Tuffnells defined benefit scheme, has incurred professional fees and faces potential regulatory exposure.

Smiths News (LON:SNWS - Get Free Report) posted its quarterly earnings results on Wednesday. The company reported GBX 5.20 EPS for the quarter, Digital Look Earnings reports. Smiths News had a return on equity of 744.74% and a net margin of 2.66%.The business had revenue of £515.70 million during the quarter.

Here are the key takeaways from Smiths News' conference call:

• In-line results: Adjusted operating profit was £18.3m and adjusted profit after tax £12.7m, revenues were down 3.9% but management expects full‑year results to be in line with market expectations and approved an interim dividend of £0.0175 per share.
• Strong cash generation: Free cash flow was £21.2m (up £7.9m year‑on‑year) and average net cash was £16.2m for the half, supporting the £16.7m of ordinary and special dividends paid and ongoing capital allocation review.
• Revenue mix remains concentrated in newspapers & magazines (>90% of sales) which fell ~4.1%, while Collectables grew 13.3% and growth verticals rose 35% (recycle +50%), showing diversification but continuing dependence on print.
• Collectables momentum looks set to continue—ongoing Pokémon demand, new retail placements and trials in Japanese anime cards, plus an expected H2 boost from the men’s FIFA World Cup support a second‑half profit weighting.
• Pensions regulatory risk: the board is responding to a Pensions Regulator warning notice over the Tuffnells defined benefit scheme, has incurred professional fees and faces potential regulatory exposure.

Smiths News Price Performance

LON:SNWS traded up GBX 1.60 during trading hours on Wednesday, hitting GBX 66.60. The company's stock had a trading volume of 733,684 shares, compared to its average volume of 759,484. The stock has a fifty day simple moving average of GBX 66.30 and a 200-day simple moving average of GBX 67.85. The company has a market capitalization of £161.20 million, a P/E ratio of 5.89, a PEG ratio of 0.29 and a beta of 0.33. The company has a debt-to-equity ratio of 338.95, a current ratio of 0.94 and a quick ratio of 0.83. Smiths News has a twelve month low of GBX 53.20 and a twelve month high of GBX 79.40.

Analysts Set New Price Targets

Several research firms recently weighed in on SNWS. Canaccord Genuity Group reaffirmed a "buy" rating and set a GBX 95 price objective on shares of Smiths News in a research report on Wednesday. Berenberg Bank reaffirmed a "buy" rating and set a GBX 85 price objective on shares of Smiths News in a research report on Wednesday. Two equities research analysts have rated the stock with a Buy rating, Based on data from MarketBeat, the company currently has an average rating of "Buy" and a consensus target price of GBX 90.

About Smiths News

In 1792 we started delivering the nation's newspapers. Today, we're proud to be the UK's largest wholesaler of newspapers and magazines, serving 24,000 retailers from superstores to corner shops. Service and efficiency put us at the forefront of our industry and with 55% market share we are the leading player in one of the world's fastest-moving supply chains. Our teams go further, when others stop, striving to meet the highest standards in all we do.

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