Swindon-based newspaper and magazines distributor Smiths News (LON: SNWS) is paying a special dividend of 3p/share on top of the increased final dividend of 3.8p/share. Underlying operating profit was flat at £39.1m, but that was better than expected.
In the year to August 2025, revenues fell 4% to £1.06bn. Cost cutting enabled operating profit to be maintained even though the contribution from newer activities was lower due to increased investment. Lower finance costs meant that pre-tax profit improved from £33.2m to £35.8m. Net cash was £3.3m at the end of August 2025.
The core newspaper and magazines distribution business is likely to continue to decline, although there could be another strong year for collectibles, because of the upcoming men’s football world cup. The rises in cover prices for newspapers and magazines help to partly offset the lower sales of publications. Most of the business for this part of the company is contracted to 2029 or 2030.
The newer activities are still in their early stages, so it will take time for them to become more significant for the group. Trials with Hallmark and other potential clients are progressing. The recycling business is extending its client base outside of the core retail customer base.
The total dividend, excluding the special dividend, is 5.55p/share, up from 5.15p/share in the previous year. The share price rose 2.4p to 65.5p, which means that the ongoing yield is 8.5%.
The current year pre-tax profit forecast has been trimmed slightly to £34.3m, which means that the shares are trading on less than seven times forecast earnings.