Smiths News Share Discussion Threads

[newshound1] 12/12/2024 12:53

Reach contract renewal shows the speed of decline on the sales
2019 -£220m
2024 -£160m

Cover price increases during those 5 years was over 100% which would mean physical items (not financial value) was 60-65% decline during that period.

Where the margin is aligned to cover price increases the margin decline would have been approx 25%. So 5% average a year decline in margin but massive drop in sales during that period

If my maths is wrong happy to correct

[gurjit] 11/12/2024 16:26

Over £4M sale @ 63.3 today. Hopefully last of the big sellers? ??

[norbert colon] 11/12/2024 13:29

Yes cover price (and price increases) feed directly into how SNWS generate their revenue.

[fenners66] 11/12/2024 11:24

The NI cost is real , for all businesses but that includes the printers.
They will want to pass on to the consumer as well,so does that mean a percentage of cover price increases goes to Smiths?
Ok that could reduce volumes but that decline has been managed for years.

[stevensupertrader] 10/12/2024 20:47

Norbert colon : let’s wait and see the next reporting set of result whether you are damn right or mistakenly wrong about some of us highlight the Ers Nic etc . 😞

[norbert colon] 10/12/2024 20:22

I made the daft mistake of taking StevenSuperTrader off mute. He's back on mute now. Spouts utter rubbish. Mgt have been making operational savings of £5-6m since at least 2020. I could go on but won't. Well done everyone else for your contributions bull or bear but keep it factual.

[marktime1231] 10/12/2024 19:07

Presumably these distribution deal renewals also lock in steadily declining revenues. What was the value of the previous 5-year Reach deal?

Not aware of too many cost saving programmes which didn't involve cutting staff. Whether employees or zero-hour contractors. A £1.2M hit from higher ER NICs and minimum wage rises is straight off the bottom line, eroding benefits from selling ancillary business activities. What room is there for even deeper cuts?

Like a second year MBA student I have been wondering if there is a transformation opportunity here. The marginal contribution from selling adjacent services like warehousing is much higher than the margin on the core distribution business.

[this_is_me] 10/12/2024 18:15

nicholasblake seems to be able to predict what the share price will be in a month's time. I wish I could do that!

[stevensupertrader] 10/12/2024 17:35

SNWS tries to cut £5m of expenses which it has done in the past two years however going forward with reducing revenue and bone has hardly any meat left , is not easy plus now with increase of Ers Ni .unless SNWS reduces the headcount imo

[nicholasblake] 10/12/2024 16:55

The shares will be back under 59 XD.

[melody9999] 10/12/2024 16:35

From the FY results of 051124:

Cost-out plans in place to deliver continued savings, targeting approximately £5.0m annually

[stevensupertrader] 10/12/2024 11:13

Basing on your figure of £1.2m of Era Ni and using last Y/e result without taking other expenses and inflation into the calculation , the bottom line will see a decrease of over 3% imo

[glaws2] 10/12/2024 11:05

The drivers that deliver to the retailers are self employed. Staff working in the distribution hubs are employees - 1400 of them. As I said above, NI impact £1.2m pa

[stevensupertrader] 10/12/2024 10:55

Are you telling us that all SNWS drivers are self employed ? Are you also telling me that all the back room staff are self employed too ? Therefore the last October Budget won’t affect SNWS at all 😆 😆

[glaws2] 10/12/2024 10:50

All the delivery drivers are outsourced.

[nicholasblake] 10/12/2024 10:37

Aren't the drivers on contract?

[gurjit] 10/12/2024 10:13

That is my concern SST. Just trying to find the optimal timing for exit. May be before next half year results.

[stevensupertrader] 10/12/2024 10:05

The increase of Ers Ni and Road taxes on vehicles will definitely make a big dent on the expenses and with the tiny margin and Revenue diminishing year after year sure plus to affect the bottom line next result imo

[glaws2] 10/12/2024 08:48

The cost of the NI increase is £1.2 pa

[nicholasblake] 10/12/2024 08:33

@Gurjit management has a track record of cutting out costs of £5m p.a..

[gurjit] 10/12/2024 08:16

I agree but may be less so if profits / EPS fall though

[hamhamham1] 10/12/2024 08:12

It may not be a growth company (currently anyway until diversification), but it is undervalued on a PE basis quite substantially IMO.

[gurjit] 10/12/2024 08:07

Agree with the general sentiment but I believe margins are quite small. What impact will increased costs (esp ERS NI) have on future profits / EPS / dividends? Thoughts?