Smiths News Share Discussion Threads

[schofi2] 02/5/2024 18:17

Smiths News said trading in the second half of the financial year would be boosted by England and Scotland’s upcoming participation in the men’s UEFA European Championships.

Jonathan Bunting, chief executive, said: "I am pleased to report solid performance across the first half of 2024. It has been another period of strong cash generation, scale cost savings, and further momentum on the contribution from our growth strategy.”

[schofi2] 02/5/2024 18:14

Well if they have reduced their bank net debt by 56% to £10m while average net debt has decreased by 53% to £12.5m, it looks quite possible that they will have paid off the remaining debt by year end. That leaves them with possibly around £20m extra a year to play with. Either to invest in bolt ons or pass on to long suffering shareholders. A 50/50 would be just abour right.
This is good going to say they had debts of around £75m three years ago.

Looking for some good movement here once the penny drops.

[deanowls] 02/5/2024 15:59

Costs will always be there it’s also how they manage them into the customer. They’ve consolidated a few contracts this year and whilst there is risk it is being managed well.

[santangello] 02/5/2024 15:22

Looks like lots of sell orders at 55p, be nice to see them clear off and move to the next resistance level.

[stevensupertrader] 02/5/2024 14:57

The key to every successful business is growth in revenue and increase margin .
In SNWS case is the opposite even with inflation running last year at say averaging 6% , SNWS cannot even maintain previously year revenue , let alone growth. SNWS is currently trying to reduce cost and reduce or eliminate debt which in a short run might gives result to pay higher dividend but in a longer time frame without growth in revenue , this would ends badly as cost will bound to catch up Ie increase due to inflation .

[marktime1231] 02/5/2024 13:20

That sounds right, the x 2 cover rule will restrict the final dividend to around 3p. It would be risky to overpay this year only to have to trim it again the next.

The backdrop of a 3-5% decline in business every year cannot be ignored, and the margins are slender to say the least. But the debt reduction and finance arrangements are positive. A 50-60p share price seems reasonable. So maybe I called this wrong when I took fright in the 30's.

[makinbuks] 02/5/2024 11:16

Thank you Edmond, good list. Can I add a concern? I expected a better FCF and in fact I had expected them to have cash on the BS by this point. On a fairly quick first read that is caused by an increase in working capital. That is counter intuitive when revenue is declining. OK, the outflow is roughly half the prior period, but they explain that by way of a "one off". It appears to me that they are caught in the middle between some very aggressive customers and suppliers.

I'm, of course, pleased with the dividend announcement and the comment that the interim is normally a third of the total. I take that as a hint that they expect a 3.5p final. But will a 5.25p payout be within the self imposed 2X limit? Seems a stretch with 4.6p in the first half.

Finally, they spent £3.3m cash buying shares for the ESOP. Wow! That's a huge number in comparison to the dividend to ALL shareholders of £6.7m. That merits a further look

[prokartace] 02/5/2024 09:53

Love the debt reduction. Should be debt free by 2nd half 2025

[edmundshaw] 02/5/2024 09:04

Positive:
1) Interest rate paid going forward now reduced from 9.2% to 7.65%, likely to fall slightly further later this year and then more next, and on an ever-decreasing debt.
2) Decline in sales seems to be slowing right down.
3) Further cautious add-on earnings.
4) Further management actions reducing costs.
5) Football sticker season coming up.
Negative:
1) Lower magazine waste prices.

I am happy with these results.

[davebowler] 02/5/2024 08:47

Canaccord....The current valuation is highly attractive, with a PER of 5.5x, a secure dividend yielding 10% and a FCF yield of 18%. We reiterate our BUY recommendation and increase our TP to 95p (from 85p), based on a cal'24E PER of c.9x, div. yield of c.6% and FCF yield of c.10%, implying 78% upside.

[bvc1cvb] 02/5/2024 08:44

Except that at least one of the 'sells' is a buy (mine!)

[lord gnome] 02/5/2024 08:41

Judging from the trades, it would appear that many had 55p set as a sell target. This is the three-year resistance level. We need to break through and close above it before we can make any real progress. I think Canaccord's target of 95p is a bit of a stretch but if we do break above 55 then the high 60s should be achievable.

[spawny100] 02/5/2024 08:33

Ok thanks.

[norbert colon] 02/5/2024 08:31

1.75p interim divi so assume double that for the final divi eg 3.5p giving a total divi of 5.25p Cannacord have 5.3p

[reddirish] 02/5/2024 08:26

We are looking at the same opportunities, Bruce; this is one of my core income stocks, and I'm delighted that it will be posting even more now the cap has been removed. I am relaxed about a long, slow market decline for something that will now be paying well over 15% on my average purchase price; but maybe the decline will be even slower, which will be better still!

[santangello] 02/5/2024 08:26

Day traders taking small profits is fine.......

Cannot see actual holders doing nothing but holding or adding.

Once the traders have left, I would expect a decent rise in the share price

[spawny100] 02/5/2024 08:17

They've not yet declared a final of 3.5p have they? Dividend max has 3p pencilled in.

[lord gnome] 02/5/2024 08:13

Decent set of numbers. Management has continued to make good progress and the future looks bright. Love the dividend increase. Final of 3.5p to come. Happy to hold and spend my dividends.

[royaloak] 02/5/2024 08:09

Think MM's read this wrong to start!

[spawny100] 02/5/2024 08:07

Added some more on that. Nice hike in divi.

[brucie5] 02/5/2024 07:56

Another great income stock with capital upside. RCH also reporting well this morning.

[santangello] 02/5/2024 07:47

Very reassuring and looking good going forward. Lovely income increase too.

Not surprised by a target price increase today.

[aishah] 02/5/2024 07:46

#SNWS mgt here have delivered an amazing recovery londonstockexchange.com/news-article/S… & this is the cherry on the cake for shareholders who’ve stuck with them👏

[brassneck2] 02/5/2024 07:44

Don't know why you bother following this company Stevensupertrader as you're always negative, usually wrong on forecasts for trading and share price performance. There must be better ways to spend your time more positively, sad.
Looks a very solid set of results to me, great news on refinancing agreement and divi. Suspect they will be well received.