Smiths News (LSE:SNWS) on Wednesday reported an adjusted operating profit of £38.7m for the 52 weeks to 29 August, in line with previously upgraded market expectations of £38.4m.
Revenue fell 2.6% to £1,036.2m from £1,064m a year earlier, with the UK's largest news wholesaler pointing to a record contribution from collectables tied to the FIFA Men's World Cup, which added more than £3m during the period.
Adjusted profit after tax rose 1.5% to £27.4m from £27m, helped by lower borrowing costs, while statutory operating profit fell 16% to £34.6m and statutory profit after tax dropped 13.8% to £24.4m, both affected by £4.1m of adjusting items including network reorganisation and transformation programme planning costs.
The board proposed a final dividend of 3.90p per share, payable on 4 February 2027, taking the total ordinary dividend for the year to 5.65p, up from 5.55p in FY2025; no special dividend was declared, against 3.00p paid the prior year.
Bank net cash stood at £3.9m at period end, up from £3.3m a year earlier, while free cash flow fell to £24.1m from £36.1m.
The group said it delivered £4.5m of operational efficiencies during the year, ahead of the more than £4m target it had set for FY2026, and reported a 31% year-on-year rise in revenue from its growth verticals, led by a 52% increase in recycling revenues.
For the newspaper and magazine distributor, the headline story of the year was the "Go National" programme, which has seen it secure long-term exclusive national distribution contracts with News UK & Ireland, Telegraph Media Group Holdings, Associated Newspapers, Frontline and Seymour Distribution. A sequence of deals struck between June and October that together secure around 61% of the national newspapers and magazines market at the point each contract takes effect.
Combined, the contracts are expected to add approximately £375m of incremental annual revenue, out of what the company estimates is a total addressable uplift of around £600m, as the company builds a national footprint spanning around 700 additional routes and 23 new depots.
Read more about Smiths News
- 15/10/26Smiths News secures exclusive national Telegraph distribution deal
- 17/07/26Smiths News secures long-term deals with Frontline and Seymour
- 17/06/26Smiths News shares surged after national News UK distribution contract
Smiths News said it will fund the £21m to £27m cost of the expansion using existing financing arrangements, with no new debt issuance disclosed.
"This is a transformational moment for our business," said chief executive Jonathan Bunting, adding that the contracts provide "a sustainable revenue platform through to 2037" while the enlarged network is expected to deliver incremental net profit from FY2028, with material benefits anticipated from FY2029 and beyond.
The company said FY2027 trading has started positively, though it expects a short-term hit to profitability next year as it absorbs the costs of building out the national network, with execution of the expansion now the key operational priority.
Smiths News confirmed it remains committed to maintaining the current ordinary dividend for FY2027 at or above current consensus, which it said stands at 5.2p per share.
