Smiths News PLC Interim Management Statement

Tuesday 10th July 2012

Smiths News PLC ("the Group") is the largest UK newspaper and magazine wholesaler and a leading wholesaler of books.

In April 2012, the Group acquired The Consortium, the UK’s leading specialist distributor of consumable products to the educational market. This was an important step in our diversification strategy, consolidating our position as a leading distributor in specialist markets. The Group is today issuing its Interim Management Statement covering the 44 week period to 7 July 2012.

The Group remains on track to deliver strong growth in profits for the year ended 31 August 2012. As a result, we expect underlying profit before tax to be at the top end of market consensus.

Total Group revenues for the 44 weeks to 7 July increased 3.3% year on year, boosted by contributions from the Dawson businesses, acquired in August 2011 and The Consortium, acquired in April 2012. The performance of each sector is as follows:

  • Smiths News revenues declined by 2.6% and by 4.1% on a like for like basis. Cover price increases continue to support newspaper performance largely offsetting volume declines with magazine performance in line with expectation.
  • Bertram revenues increased 32.5%, including Dawson Books, and by 4.3% on a like for like basis. Both UK Wholesale and International are trading marginally above last year with Library Services continuing to trade well above last year.
  • The Consortium has traded in line with management expectations with revenues for the 11 weeks post acquisition 7.2% above last year. Integration of West Mercia Supplies business is also progressing well.

Net debt at 30 June was higher than at 28 February 2012 as a result of the £38m acquisition of The Consortium.

The Group continues to operate well within its bank facilities. The Group will announce its preliminary results for the year ending 31 August 2012 on 16 October 2012.

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