Smiths News PLC (LSE:SNWS) has reported good trading for the second half of the current year and said it expects profits for the full year to beat market forecasts.
Underlying profit (adjusted EBITDA) for the 52 weeks to August 27, 2022, is expected to be no less than £40mln, ahead of analysts' estimates, the UK’s largest newspaper and magazine wholesaler said in a trading update.
In light of its good performance, the company expects to recommend a final dividend for the year of at least 2.7p per share.
Sales of newspapers and magazines returned to historic trends in the second half, with higher margin one-shots and ancillary revenue streams continuing to benefit the overall margin performance for the full year, Smiths News said.
Fuel prices and other inflationary pressures continue to be in line with expectations and cash generation was strong in the period, resulting in continued de-leveraging, it added
"In what has been an uncertain period for the wider economy, our signature attention to delivering our plans has paid dividends. We remain focused on providing excellent service to our retailers and publishers and expect to continue to deliver consistent financial performance and shareholder returns,” commented Smiths News chief executive officer Jonathan Bunting in the statement.
The company said it has made exceptional provisions of £4.4mln for bad debt risk against the administration of McColl's Retail Group, which will impact statutory profit after tax for the full year.