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Connect Group PLC

("Connect Group" or "the Group")

Connect Group agrees five year contract extension with Northern & Shell

New contract secures c£83m of annual revenues

Connect Group PLC, a leading specialist distributor operating in four divisions; News & Media, Books, Education & Care and Parcel Freight, is pleased to announce Smiths News has reached an agreement with Northern & Shell to extend its newspaper and magazine wholesaling contract until March 2021.

The contract is valued at c£83m pa (at FY15 values) equating to 6% of the national newspaper and magazine distribution market. This also represents a 56% market share of Northern & Shell's distribution business. Northern & Shell publishes The Daily Express, Sunday Express, Daily Star, Daily Star on Sunday, OK! Magazine, OK! Celebrity Pack, Star and New! Magazines.

Following this extension, Smiths News has now secured c£5.0bn of revenues per annum (at FY15 values) through to 2019 equating to 94% of total sales.

Mark Cashmore, Chief Executive Officer, commented,

"We are delighted to have extended our relationship with Northern & Shell, one of the largest newspaper and magazine publishers in the UK, securing another significant publisher agreement for our newspaper and magazine distribution business.

Today's announcement further endorses our market leading proposition, whilst ensuring valuable newspaper and magazine distribution revenues through to 2021."

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About Connect Group PLC:

Connect Group PLC is a leading specialist distributor operating in large and diverse markets. The Group has four separate divisions, connecting suppliers to customers in an efficient, knowledgeable and service oriented way:

• Connect News & Media - Encompassing: Smiths News, Dawson Media Direct and Pass My Parcel. Smiths News is the UK's largest newspaper and magazine wholesaling business with an approximate 55 per cent. market share. It distributes newspapers and magazines on behalf of the majority of the major national publishers as well as a large number of regional publishers serving approximately 30,000 customers across England and Wales on a daily basis, including large general retailers as well as smaller independent newsagents with approximately 40 million newspapers supplied weekly; Dawson Media Direct is an international media direct business supplying newspapers, magazines and inflight entertainment technology & content to over 80 airlines in 50 countries. Pass My Parcel, a wholly-owned 'click and collect' delivery service, operated by the News Business, has a network of over 3,000 parcelshops and clients which include Amazon and ASOS.

• Connect Books - Combining a number of recognised brands in print and digital bookselling, including Bertrams, Dawson Books and Wordery. A leading distributor of printed and digital books, the division supplies a mix of traditional and online booksellers, academic and public libraries and direct to consumer through Wordery.

• Connect Education & Care - A leading independent supplier of consumable products to the Education and Care markets through The Consortium and West Mercia Supplies. The division currently holds an approximate 5 per cent. market share of the estimated addressable market, and serves over 30,000 customers with an extensive range of over 40,000 products across a branded, own-brand and value range, including stationery, arts and craft and cleaning.

• Connect Parcel Freight - Tuffnells is a leading provider of next-day B2B delivery of mixed parcel freight consignments, specialising in items of irregular dimension and weight ("IDW"), examples of which include bulky furnishings, building materials and automotive parts. Tuffnells offers distribution coverage throughout the UK through a network of 37 depots and operates a largely depot-to-depot operational model, delivering over 13 million consignments per annum, through a wide range of services to over 4,500 customers focusing on SMEs.