Smiths News Company Research (SNWS)

Smiths News (SNWS) has announced that it has secured a transformational long-term contract with News UK & Ireland Limited (News UK), publisher of leading UK titles including The Sun, The Times, and The Sunday Times. Key transformational aspects of the contract include: national distribution for News UK with the ability to offer this capability to other customers and verticals, an incremental revenue uplift of c £125m per annum from July 2027 (c 12% of FY26 revenue £1,032m), the long contract term through to July 2037 providing improved revenue visibility for the group (that its current contracts run to c 2029), an expected return on capital above SMWS’s hurdle rate and expected earnings accretion from FY28 onwards. We maintain our estimates and valuation and await further guidance from the board on the financial effects of the contract.