Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Connect Group sees annual results below expectations after tough year

Connect said its plan to close its Pass My Parcel business was going well and that it had reached an agreement with key clients to wind the unit down
Connect Group sees annual results below expectations after tough year
Connect said that newspapers sales had held up well but that magazine sales had weakened further in Q4

Connect Group PLC (LON:CNCT) expects its full-year trading performance to fall below market expectations after the challenging trends experienced throughout the year continued in the fourth quarter.

The logistics group said on Friday that at its Smiths News business, newspaper sales had held up well but magazine sales had weakened further in the final quarter. The football World Cup delivered lower sales of stickers and albums than in previous tournaments but was consistent with revised expectations, it added.

READ: Connect Group lifted by extension of distribution deal with News UK

News UK’s titles include The Sun, The Times and the Sunday Times.

The logistics group, formerly known as Smiths News, said conditions in the parcel freight market remained challenging with actions to improve service and efficiency having limited time to influence financial performance in the period. As a consequence, it said Tuffnells' second-half performance was expected to be worse than in the first half.

Connect said that its plan to close its Pass My Parcel unit, announced in June 2018, had proceeded at pace and that agreement has now been reached with key clients to wind down operations and exit onerous contracts. Deliveries and collections representing over 95% of volumes ceased during August 2018 and distribution services for the remaining clients will end by January 2019, it added.

The swifter than anticipated exit from onerous contracts has led to additional operating losses in the period but is expected to have a positive impact on the level of provision required for closure costs in 2019.

The company said it had also made provisions relating to a historic underpayment to HMRC over the misapplication of national minimum wage legislation at Tuffnells and for further organisational restructuring.

View full CNCT profile View Profile

Connect Group Timeline

Related Articles

Students in a class
August 27 2018
The company is gaining traction in Asia where people are looking to take language courses to work or study internationally
Clint Eastwood
May 25 2018
The group’s first piece of original content, a documentary called Pandas, premiered on 24 March this year, to positive reviews.
Email
August 15 2018
Milan Patel, dotdigital’s chief executive officer said: "This year reflects substantial progress against the company's strategic aims in accelerating our platform capabilities into the omnichannel space, continuing to innovate our product, growing geographically and deepening our relationships with our strategic partners”

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use