Struggling Connect Group PLC (LON:CNCT), the logistics group formerly known as Smiths News, has had a much-needed boost from a contract win.
The company, which saw its share price virtually halve three weeks ago after a profit warning, announced that its long-term contract within the United Kingdom with newspaper publisher News UK had been extended through to July 2024.
READ: Connect Group shares almost halve after what looks to be this year’s first World Cup-related profit warning
The shares rose 5.4p to 31.3p on the news; the contract is worth around £200mln a year in revenues to Connect.
News UK’s titles include The Sun, The Times and the Sunday Times.
"We are delighted to confirm this significant publisher agreement for our newspaper and magazine distribution business,” said the appropriately named Mark Cashmore, the chief executive of Connect.
“Visibility of future revenues underpins the ability of Smiths News to continue to deliver strong profits and cash. The contract is good news for the supply chain as a whole and positions the group well to secure a similar outcome with our other publisher partners," he added.
Cashmore has signalled his intention to leave the company after an orderly transition to his replacement, who has yet to be appointed.