Leading UK newspaper distributor Smiths News has reported a profit slump as demand for physical newspapers has continued to decline.
In its interim results, published this morning, the company said profit after tax tumbled by 11.3 per cent to £11.3m in the 26 weeks ended February 2024, down from £13.3m the previous year.
Operating profit declined 7.8 per cent to £18.8m, while revenue also fell two per cent to just below £540m.
The company, which delivers newspapers and magazines for national and regional publishers to around 23,000 customers across England and Wales every day, blamed the decline on the men’s World Cup and Royal Succession in 2023, which set a high bar to beat.
But, it said it expected trading in the second half of 2024 to benefit from England and Scotland’s upcoming participation in the men’s UEFA European Championships.
Smiths News also announced a deal to replace its old loan agreement today. The new facility will replace an old loan that was due to expire in 2025.
The new agreement, arranged with two banks the company already works with, Santander and HSBC, will give Smiths News access to a £40m revolving credit facility that it can borrow when it needs to. There is also an extra £10m potentially available.
Under the new deal, an existing £10m per year cap on dividends and distributions has been scrapped.
Jonathan Bunting, chief executive officer of Smiths News, said: “We are extremely pleased to announce today’s refinancing news, reflecting the clear progress we have made in strengthening the Company’s underlying finances and reducing the net debt of the business.”
“The removal of the distribution cap also enables us to implement a revised capital allocation policy that will support our goals of investing in business capabilities, exploring inorganic adjacent market opportunities and delivering value to investors,” Bunting explained.