Swindon-based newspaper and magazines distributor Smiths News (LON: SNWS) is trading in line with expectations this year.
There are currently 91% of expected newspaper and magazine revenues are secured via long-term contracts that last until at least 2029. There is a steady decline in this area, but the contracts provide good visibility.
This business can generate cash while management builds up other operations. There are plans to offer ambient early morning deliveries, plus potential for other ways to utilise the company’s warehouse and distribution capacity and expertise.
The share price slipped 1.49% to 52.8p. Interim results will be published on 7 May.
Full year revenues are expected to decline from £1.1bn to £1.03bn, while pre-tax profit could be maintained at around £33.4m. Net debt could reduce from £11m to £8m and the dividend should be held at 5.2p/share. There should be net cash by 2026.
The shares are trading on just over five times prospective earnings, and the forecast yield is 9.9%.