Smiths News Share Discussion Threads

[aishah] 05/11/2024 13:27

Sleep at night easy this share now. Collect the divis for years to come.😴ԅ64;

[kenmitch] 05/11/2024 13:24

Agree with davidosh and others positive about SNWS. It’s been a great lockaway share for those of us who bought several years ago not far off half the current price. Those investing then when the dividend yield was near to 10% have already had more than half their stake back in dividends. Now they/we are getting a near 20% dividend.

It had been clear that there could be no dividend increase until debt was down significantly but every update has been positive so (barring shock bad news that can hit any share) the time was sure to come when they could increase dividends. Not a share for big further capital gains unless SNWS falls to a bid, but a classic income share with that very high chance of further dividend increases to come, and a starting yield at 62p of near to 12%.

[stevensupertrader] 05/11/2024 13:10

SNWS new initiative ie to deliver books, entertainments and grocery goods to build on the newspapers delivery is starting to
see growth , started in year 2023 of generating £700k to £2m profit added to the ‘bread and butter ‘ business plus cost cutting of £5.6 m to a good bottom line figure that able to allow CEO and Board increase the final dividend to over 20% plus special dividend this financial year.
Sure to be more of this in the coming years to come if the new initiative side of the business take off.
Current share price is a bargain and opportunity to buy imo

[wjccghcc] 05/11/2024 12:48

They said 1.2mm nic increase in the webinar. Canaccord reduced EPS forecasts by 0.5p in their note this morning to account for it. Forecasts are now FY25 EPS rising to 10p from 9.8p this year and 10.4p next year.

[sphere25] 05/11/2024 12:45

Starting to see some notable interest:

3.38m
2.65m

Could be the beginning of clearing Fidelity out here.

All imo
DYOR

[newshound1] 05/11/2024 12:43

@ fenners66 I’m not sure the full year interest saving numbers you mentioned will fall through to the bottom line. Based on staff numbers most this will be lost to the national insurance increase. I estimate 1.5million nic increase on this years numbers pre April NLW increase.

Positive note the tax increases don’t reduce the profits at least

[marktime1231] 05/11/2024 11:30

We are handing you a £5M special dividend from surplus cash flow because net debt is now only £11M. The enhanced final dividend fair enough.

[fenners66] 05/11/2024 11:05

Interest saving for a full year rather than just 3 months to come in next FY.
Sonia to fall a little bit as well and if they keep generating cash some more to
come off the debt.
I reckon that may add £2m to pre tax profit.
Now if they can actually leverage some growth from their ambient
early morning potential , this almost has a future as a growth stock !

I like the reductions in headcount - especially the support headcount (as
long as that is sustainable) clearly aimed at reducing inflation impact.

Nice to see that getting back to core business pays dividends.

[davebowler] 05/11/2024 10:25

Edison -
Smiths News’ FY24 trading was robust and results came in ahead of consensus. This, along with the debt refinancing announced in May, has resulted in lower average debt, which in turn has allowed the company to implement its revised capital allocation policy (communicated in May) and its diversification ambitions. Furthermore, it has lifted its total ordinary dividend from 4.15p to 5.15p/share and announced a ‘special’; dividend of a further 2.0p/share. Year end Revenue (£m) PBT* (£m) EPS* (p) DPS (p) P/E (x) Yield (%) 08/23 1,091.9 33.4 11.3 4.2 5.1 7.3 08/24 1,103.7 34.1 10.6 7.2 5.4 12.5 08/25e 1,038.0 35.0 11.1 5.3 5.1 9.3 08/26e 1,006.8 35.0 11.1 5.3 5.1 9.3 Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. Smiths News’ FY24 results were ahead of market expectations, with adjusted operating profit coming in at £39.1m, £0.3m ahead of last year and £0.9m ahead of market consensus. Key elements of the better result were the 53rd week of trading, the contribution from sales of the men’s UEFA European Championship sticker collections and a £2.0m (FY23: £0.7m) contribution from organic, low-risk growth initiatives. Cost savings of £5.6m offset inflationary pressures across the business. Average net debt continued to fall, from £25.0m to £11.7m, and along with the refinancing completed in May, led to lower interest costs in the year. The refinancing also removed the £10m pa dividend cap, which has allowed Smiths News to implement a revised capital allocation policy. The new policy includes: 1) the maintenance of a strong balance sheet (bank net debt to bank EBITDA of less than 1x, currently 0.3x), 2) continued investment in news and magazines as well as organic growth initiatives, 3) the payment of a sustainable 2x covered ordinary dividend, 4) a disciplined approach to bolt-on acquisitions, and 5) further returns to shareholders as appropriate. To this end, Smiths News will propose a total ordinary dividend for the year of 5.15p/share (cost £12.8m), plus a 2.0p/share ‘special’; dividend (cost £5.0m), bringing the total dividend payable for the year to 7.15p/share. Overall revenue was £1,103.7m, up 1.1% y-o-y, but excluding 1.9% that related to the 53rd week implies a decline of 0.8%, which is better than the long-run average decline of 3–5% pa. Excluding the additional week, newspaper revenue was up 1%, driven by new contracts and cover price rises, offset by volume decline. In magazines, revenue fell 3.2% on a similar basis, again outperforming the 10-year average decline of 6% pa. Following the signing of numerous publisher agreements in recent periods, Smiths News now has c 91% of revenues renewed until 2029 and can look forward to relative stability in the core business, with exciting potential in the growth initiatives. Our forecasts are under review following the results and the changes to National Insurance outlined in last week’s budget.

[norbert colon] 05/11/2024 10:20

Broker note states that:New growth initiatives delivered £2.0m profit, +185% vs £0.7m LY. The market for early morning delivery is estimated to be worth c.£4.9bn, excluding newspapers and magazines, within which the market for ambient products is estimated to be worth c.£1.3bn. Given 10-15% margins, this presents a profit opportunity of c. £160m for SNWS to target over the medium term. Achieving 5-10% share, utilising its existing infrastructure and assets, could present an incremental profit opportunity of £8-16m over the medium term, compared to the £2.0m achieved in FY24. We expect more detail on the route map to achieving such an outcome in due course.

[cjohn] 05/11/2024 09:58

As well as the dividend, we actually have the ancillary activities making a small, but significant contribution (2m) to operating profit.

[prokartace] 05/11/2024 09:05

Seller can't have a lot left to go. Mid October they went from 10% to below 5% and will soon no longer have a notifiable position

[davidosh] 05/11/2024 08:41

There will be lots of income investors and funds that will like this now...the yield is nearly 12% when you include the special dividend and looks set to continue

[sphere25] 05/11/2024 08:26

But that big seller is still at work.

Currently on the book with an iceberg of 7877. It clearly wants to break higher out of the range, but abit hit and miss right now as to whether that seller drags it back into the tight range.

Certainly looks like some whoppers needed to clear them. However, the results, chart and possible trading spike to come in should that buying pick up makes this an interesting watch.

All imo
DYOR

[royaloak] 05/11/2024 08:03

The big seller was wrong!

edit

But he is stili around it looks, I will add at sometime.

[this_is_me] 05/11/2024 07:31

Huge increase in dividend payments.

[melloteam] 29/10/2024 18:39

Smiths News will be at Mello 10 Year Anniversary, the annual flagship in-person investor event in Derby.
To celebrate our 10th anniversary, Mello are returning to Derby on Tuesday 19th November & Wednesday 20th November, back where we first started, at the Derby Conference Centre, on the edge of the Peak District.
The two day investor conference will include 12 top quality keynote speakers such as Gervais Williams; Peter Pereira Gray; Ben Rogoff; Rosemary Banyard; Twin Petes Podcast and many more! The event will also feature over 40 companies and educational workshops and panel sessions.
Get 50% off your ticket with code MMTADVFN50

[martin44] 18/10/2024 15:09

Agreed and seems to perhaps be already working!

[norbert colon] 18/10/2024 09:30

Yep usually to provide access to a broader investor base - I'm biased as I hold and I get the argument re a low rating but I'm confident mgt will eak out every drop of value they can find here.

[martin44] 18/10/2024 09:10

Hopefully to promote the inherent value of the business so we can see a more realistic value of the business….

[norbert colon] 18/10/2024 09:04

Interesting that Cannacord have been appointed as joint broker alongside Berenberg.

[deanowls] 15/10/2024 04:53

Hi Mark

Isnt that 130m for the 70% they don’t own implying a 170m valuation?

[marktime1231] 14/10/2024 15:54

Curious that InPost the post-locker company thinks Menzies Distribution is worth only around £130M, similar to SNWS. Menzies has a similar size business in news and media, declining at 6% a year, similar slender margin, just a couple of million debt. But in contrast Menzies has developed about 25% revenues from other business lines. So is it getting Menzies on the cheap working from the inside? Or is SNWS valuation a bit flattering?

[chrisdgb] 14/10/2024 09:44

Good news to get rid of a loose holder...