CNCT.L Regulatory News (CNCT)

16 Jul 2009 07:00



Smiths News PLC

Interim Management Statement

Smiths News PLC ("the Group"), the UK's leading wholesaler of newspapers and magazines, issues the following trading update for the 19-week period ("the period") from 1 March 2009 to 11 July 2009 which constitutes the Group's Interim Management Statement as required by the UK Listing Authority's Disclosure and Transparency Rules.

Total Group revenues in the period were up 7.1% year on year, benefiting from the acquisition of Bertrams in March 2009 and the News International contract gains. Underlying trading in the Group's news distribution business remains in line with the market trends highlighted in the interim results announced in April 2009 with like for like sales in the period down 4.2%. The Group continues to build upon the strong cost efficiencies achieved in the first six months of the year. 

Since the publication of our interim results the Group announced further contract gains with the Trinity Mirror Group and Marketforce. To date the Group has secured over £400m of incremental revenue on an annualised basis across all re-negotiated contracts.

We announced last year that we had won new contracts from News International in fifteen new territories, increasing our market share of News International's titles from 24% to 39%. At News International's request the supply to five of these new territories began on 22 June, two weeks earlier than originally agreed. This early implementation has gone smoothly and is a good example of the focus and professionalism that underpins the business's reputation for project implementation and service excellence.

Bertrams has made good progress in its first few months of the Group's ownership. Normal trading relationships with all major publishers have been re-established and stock levels restored to optimum levels. Strong academic and internet sales have contributed to Bertrams trading ahead of forecast.

The Group's net debt position has moved marginally following the acquisition of Bertrams on 20 March and it continues to operate well within its bank facilities, which expire in June 2011. 

The Board remains confident in the Group's performance for the remainder of the financial year.

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About Smiths News PLC

Smiths News PLC comprises Smiths News, the UK's leading wholesaler of newspapers and magazines and Bertrams, a leading UK book wholesaler. The Group was formed on 1 September 2006 following the demerger of WH Smith PLC.

Smiths News distributes newspapers and magazines on behalf of all the major national publishers as well as a large number of regional publishers. The business serves approximately 26,000 customers across England and Wales, supplying large general retailers as well as smaller independent newsagents. Smiths News has an approximate 40 per cent share of the magazine wholesaling sector and an approximate 40 per cent share of the newspaper wholesaling sector in the UK.

In addition to its distribution activities, Smiths News collects and processes returns, supplies sales information to publishers and provides a range of services for its retail customers.

Bertrams, which was acquired on 20 March 2009, supplies books to a mix of independent booksellers, on-line and multiple retailers, and libraries. Bertrams has an approximate 45 per cent share of the wholesale book market.

Smiths News PLC operates from 49 distribution centres across England and Wales, and employs 4,000 staff.