REG - Smiths News PLC - Half-year Report
07/05/2025 07:00
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RNS Number : 5458H Smiths News PLC 07 May 2025
7 May 2025
Smiths News plc
("Smiths News" or the "Company")
Unaudited Interim Results for the 26 weeks ended 1 March 2025
Good start to FY2025, underpinned by the news and magazines business, with
trading in line with market expectations
91% of existing publisher revenue streams secured underpinning short and
medium-term revenues and the expansion of the Company's early morning supply
chain activities
Smiths News (LSE: SNWS), the UK's largest news wholesaler and a leading
provider of early morning end-to-end supply chain solutions, today announces
unaudited interim results for the 26 weeks ended 1 March 2025 (the "Period" or
"HY2025").
Financial highlights:
· Performance remains in line with market expectations for FY2025
· Revenues of £536.4m (-0.6% versus HY2024) and adjusted operating profit of
£19.4m (+3.2% versus HY2024)
· Programme of identifying operational efficiencies continues to plan,
delivering £3.0m of cost savings in HY2025 (HY2024: £3.1m)
· Strong ongoing free cash flow of £13.3m in HY2025 (HY2024: £4.2m)
· Major contract renewals now secured, with 91% of existing publishers revenues
to at least 2029, underpinning both short and medium-term revenues and the
expansion of our early morning supply chain activities
· Interim dividend of 1.75 pence per share (HY2024: 1.75 pence), due to be paid
on 3 July 2025
Adjusted results ((1)) 26 weeks to 26 weeks to Change
1 Mar 2025 24 Feb 2024
Revenue £536.4m £539.8m (0.6%)
Operating profit £19.4m £18.8m 3.2%
Profit after tax £13.1m £11.8m 11.0%
Earnings per share 5.4p 4.9p 0.5p
Statutory results
Revenue £536.4m £539.8m (0.6%)
Operating profit £20.0m £18.6m 7.5%
Profit after tax £13.5m £11.6m 16.4%
Earnings per share 5.6p 4.8p 0.8p
Interim dividend per share 1.75p 1.75p -
Cash flow and net debt
Free cash flow ((2)) £13.3m £4.2m 216.7%
Bank Net Debt ((3)) £12.4m £10.0m 24.0%
Average Bank Net Debt £1.1m £12.5m (91.2%)
*Company compiled analyst consensus can be found on Smiths News' website:
Analyst consensus
(https://www.smithsnews.co.uk/investor-zone/investors/consensus-and-key-metrics/)
Outlook
· Ongoing internal investment programme to support delivery of the Company's
core capabilities, including the roll out of a new warehouse management system
to other key depots across Smiths News footprint
· Stable performance from news and magazines business underpinning HY2025
performance and on track to deliver c.£5m of cost savings in FY2025
· Growth initiatives are progressing well across all three key target verticals,
supported by Smiths News' unrivalled expertise in warehousing, reverse
logistics and early morning final mile services
· Management remains focused on leveraging the Company's high-density UK
delivery network with trading for FY2025 in line with market expectations.
Jonathan Bunting, Chief Executive Officer, commented:
"The business has made a good start to year with Smiths News on track to
deliver full year results in line with market expectations.
"The News and Magazines business continues to underpin our growth ambitions,
as we seek to further leverage our early morning supply chain expertise and
expand our offering.
"Having now renewed over 91% of our existing publisher contract revenues
through to 2029, not only does this provide the business with excellent
visibility across the medium term but provides an enviable platform to deliver
additional stakeholder value."
For further information, please contact:
Smiths News plc via Vigo Consulting
Jonathan Bunting, Chief Executive Officer
Paul Baker, Chief Financial Officer
www.smithsnews.co.uk (http://www.smithsnews.co.uk)
Vigo Consulting Tel: +44 (0) 20 7390 0230
Jeremy Garcia / Fiona Hetherington / Anna Sutton
smithsnews@vigoconsulting.com (mailto:smithsnews@vigoconsulting.com)
About Smiths News
For over 200 years, Smiths News has been delivering newspapers to retailers
across the UK. It distributes newspapers and magazines on behalf of the major
national and regional publishers, delivering to approximately 22,100 customers
across England and Wales on a daily basis. The speed of turnaround and the
density of Smiths News' coverage is critical to one of the world's fastest
physical supply chains.
For more information, please visit: www.smithsnews.co.uk
(http://www.smithsnews.co.uk)
Person responsible for arranging release of this announcement:
Stuart Marriner, General Counsel and Company Secretary
Smiths News plc, Rowan House, Cherry Orchard North, Kembrey Park, Swindon SN2
8UH
Email: cosec@smithsnews.co.uk (mailto:cosec@smithsnews.co.uk)
Notes
The Company uses certain performance measures for internal reporting purposes
and employee incentive arrangements. The terms 'Bank Net Debt', 'free cash
flow', 'Adjusted operating profit', 'Adjusted profit before tax', 'Adjusted
earnings per share' and 'Adjusted items' are not defined terms under IFRS and
therefore are Alternative Performance Measures (APM) and may not be comparable
with similar measures disclosed by other companies.
(1) The following are key APMs identified by the Company in the consolidated
interim financial statements as Adjusted results:
a. Adjusted operating profit - is defined as operating profit excluding
Adjusting items.
b. Adjusted profit before tax (PBT) - is defined as profit before tax before
the impact of Adjusting items.
c. Adjusted earnings per share - is defined as Adjusted PBT, less taxation
attributable to Adjusted PBT and including any adjustment for minority
interest to result in adjusted profit after tax attributable to shareholders;
divided by the basic weighted average number of shares in issue.
d. Adjusting items - Adjusting items of income or expense are excluded in
arriving at Adjusted operating profit to present a further measure of the
Company's performance. Each adjusting item is considered to be significant in
nature and/or quantum, non-recurring in nature and/or considered to be
unrelated to the Company's ordinary activities or are consistent with items
treated as adjusting in prior periods. Excluding these items from profit
metrics provides readers with helpful additional information on the
performance of the business across periods because it is consistent with how
the business performance is planned by, and reported to, the Board and the
Executive Team. They are disclosed and described separately in Note 3 to the
consolidated interim financial statements to provide further understanding of
the financial performance of the Company. A reconciliation of adjusted
profit to statutory profit is presented on the income statement.
(2) Free cash flow - is defined as cash flow excluding the following: payment of
dividends, the impact of acquisitions and disposals, the repayment of bank
loan principal amounts and outflows for purchases of own shares (EBT share
purchases).
(3) Bank Net Debt - represents the net position drawn under the Company's banking
facilities and is calculated as total debt less cash and cash equivalents.
Total debt includes loans and borrowings (excluding amortised arrangement
fees), overdrafts and obligations under finance leases under accounting
standards applicable in 2019.
Cautionary Statement
This document contains certain forward-looking statements with respect to
Smiths News plc's financial condition, its results of operations and
businesses, strategy, plans, objectives and performance. Words such as
'anticipates', 'expects', 'intends', 'plans', 'believes', 'seeks',
'estimates', 'targets', 'may', 'will', 'continue', 'project' and similar
expressions, as well as statements in the future tense, identify
forward-looking statements. These forward-looking statements are not
guarantees of Smiths News plc's future performance and relate to events and
depend on circumstances that may occur in the future and are therefore subject
to risks, uncertainties and assumptions. There are a number of factors which
could cause actual results and developments to differ materially from those
expressed or implied by such forward looking statements, including, among
others the enactment of legislation or regulation that may impose costs or
restrict activities; the re-negotiation of contracts or licences; fluctuations
in demand and pricing in the industry; fluctuations in exchange controls;
changes in government policy and taxations; industrial disputes; war and
terrorism. These forward-looking statements speak only as at the date of this
document. Unless otherwise required by applicable law, regulation or
accounting standard, Smiths News plc undertakes no responsibility to publicly
update any of its forward- looking statements whether as a result of new
information, future developments or otherwise. Nothing in this document should
be construed as a profit forecast or profit estimate. This document may
contain earnings enhancement statements which are not intended to be profit
forecasts and so should not be interpreted to mean that earnings per share
will necessarily be greater than those for the relevant preceding financial
period. The financial information referenced in this document does not contain
sufficient detail to allow a full understanding of the results of Smiths News
plc. For more detailed information, please see the Interim Financial Results
for the half-year ended 1 March 2025 and the Report and Accounts for the year
ended 31 August 2024 which can each be found on the Investor Zone section of
the Smiths News plc website - www.smithsnews.co.uk. However, the contents of
Smiths News plc's website are not incorporated into and do not form part of
this document.
OPERATING REVIEW
Overview
Smiths News delivered another solid performance during the Period, remaining
on track to deliver FY2025 results in line with market expectations, supported
by the Company's high-density UK delivery network.
Adjusted operating profit of £19.4m (HY2024: £18.8m) increased by 3.2% from
revenue of £536.4m (HY2024: £539.8m), due to stable performance from our
news and magazines operations. Adjusted profit before tax was £17.7m (HY2024:
£15.9m), marking a £1.8m increase. Free cash flow remained in line with plan
at £13.3m (HY2024: £4.2m), an increase compared to HY2024. Average Bank Net
Debt saw a decrease of 91.2% to £1.1m, whilst Bank Net Debt increased to
£12.4m during the Period due to payment of the prior year final ordinary and
special dividends in February 2025. Adjusted EPS stood at 5.4p (HY2024: 4.9p),
a 10.2% increase.
Financial performance
Trading performance in HY2025 remained consistent, with revenue, adjusted
operating profit and cash generation remaining on track, and in line with
expectations. Our news and magazines business continues to perform well, and
is generating strong levels of cash flow in line with our internal forecasts.
Unlike previous periods, HY2025 saw no significant one-off events, however
trading was bolstered by the launch of a new range of Pokémon collectables,
with sales of collectables returning to peak levels last seen in 2022. The
increasingly popular Women's European Football Championship is taking place in
July 2025, and we hope to see continued momentum in related collectable sales.
Progressing growth initiatives
The Company has made good progress in advancing its growth initiatives. The
rollout of Smiths News Recycle, a waste recycling collection service tailored
to our retail customers, is progressing well. We initially targeted our
existing customer base and continue to generate traction across this pool,
with customer numbers increasing 5% versus at year end.
The team has also entered the early stages of a trial to extend our recycling
services to new customers along selected existing delivery routes in the
Northwest region. Our focus during the second half of the year will be on
advancing these trials and targeting new customer pools and we look forward to
providing a more comprehensive update at the full year results.
In April 2025, we appointed a new Managing Director for our Recycling
activities, who is expected to join later this year. The newly appointed
individual joins us from one of the largest players in waste management, and
their specialist sector background knowledge will support the successful
rollout of our offering.
A second growth vertical that Smiths News is targeting is the delivery of
additional categories such as books and home entertainment to retail customers
including supermarkets and other grocers. Smiths News already services a small
number of customers in this space and is looking to expand that footprint
further.
Accordingly, in February 2025, Smiths News commenced a trial with global
greetings card experts, Hallmark, to deliver greetings cards to independent
retailers. The trial has started well, and we will review progress and
traction from our retailers throughout the second half of 2025.
Development of our offerings within the final mile services vertical has also
progressed during the Period. We have entered a small-scale trial with a
number of providers to deliver engineering and manufacturing specialist parts
to customers along our existing routes, leveraging our in-depth knowledge of
the unique dynamics of the final mile market and our well-established
high-density network.
Internal investment programme
As outlined previously, Smiths News has commenced an investment programme over
the next three years, increasing investment in the business by approximately
£2.0m per annum over that period to £6.0m per annum. Part of this programme
is aimed at optimising warehouse operations and enhancing capabilities and
efficiencies in a low-risk way. Smiths News recognises the importance of
implementing new systems and technology without disrupting the ongoing service
to its customers. We are pleased to report we have now successfully
implemented a new warehouse management system at one of our key regional hubs
and will be looking to roll it out to the remaining two hubs in a structured
manner over the coming months.
Other initiatives include the implementation of a transport management system
and further investment in facilities. This investment programme will ensure
that we continue to provide our existing customers with an efficient and
high-quality service, whilst also supporting our growth strategy.
Operational efficiencies and inflation
Across HY2025, we delivered £3.0m of cost savings, in line with our internal
targets, and maintaining our annual cost saving target of c.£5.0m.
We have remained focussed on identifying operational efficiencies to optimise
our network and services, and the implementation of our new warehouse
management system will further support cost savings across FY2025.
As we enter the second half of the year, Smiths News anticipates rising wages
due to a combination of factors, including general wage inflation, an increase
in the National Living Wage, a lower Employer National Insurance threshold,
and a higher Employer National Insurance headline rate. We will begin to see
these impacts in the second half, as previously flagged and built into market
expectations.
Strong cash generation
The Company continues to maintain strong levels of cash generation, supported
by the resilient performance of our news and magazines business.
In HY2025, the business generated £13.3m of free cash flow (HY2024: £4.2m),
in line with internal targets. This increase included the one-off benefits of
a £1.5m tax pension refund and the receipt of a first interim dividend from
the administrators of McColl's Retail Group ("McColl's") of £1.6m.
Post-period end, the Company received a second interim dividend of £1.7m,
taking the total payments now received from the administrators to 61% of the
total debt balance. A final dividend is expected later this financial year.
Board changes
Manju Malhotra joined the Board as an independent non-executive director and
member of Smiths News' Audit, Remuneration, Sustainability and Nominations
Committees with effect from 16 January 2025. Ms Malhotra has extensive
experience, having held a number of senior financial and operational roles,
and we are pleased to welcome her to Smiths News.
Denise Collis retired from the Board following the conclusion of her nine-year
term with Smiths News at the Company's AGM held in January 2025. Ms Collis'
oversight and guidance have contributed greatly to the overall success of the
Company during her time on the Board and as a chair of the Remuneration
Committee and we are grateful for her work. Michael Holt, current independent
non-executive director and designated director for colleague engagement, has
been appointed into the additional role of chair of the Remuneration
Committee. Mr Holt has been a member of the Board and Remuneration Committee
since 2018 and his experience to date stands him in good stead to take over as
chair.
On 4 March 2025, it was announced that Paul Baker, Chief Financial Officer
("CFO"), had informed the Board of his intention to step down as director and
CFO, to join a large private business, operating in a different sector.
Paul will remain with the Company through his notice period whilst a
replacement is found, to ensure a seamless and effective transition of
responsibilities. The search for Paul's successor has commenced and we will
provide a further update in due course.
Dividend
An interim dividend of 1.75p per share will be paid on 3 July 2025 (HY2024:
1.75p per share) to shareholders on the register on 6 June 2025. The
ex-dividend date will be 5 June 2025.
In line with our capital allocation policy announced in May 2024, the Company
commits to paying a sustainable ordinary dividend to shareholders, maintaining
2x dividend cover, and will make further returns to shareholders when
appropriate and prudent to do so.
Outlook
After a solid start to the current financial year, the Company begins the
second half of FY2025 on a strong footing. Revenue, adjusted operating profit
and cash generation are all in line with market expectations for the full
year. We have successfully advanced our growth initiatives and expect to
provide a more comprehensive update on the progress of these at the full year.
Smiths News remains a trusted partner in the early morning final mile space,
consolidated by our strong track record of high-quality service delivery to
the news and magazines market. We are making progress with our stated goal of
becoming the UK's leading provider of early morning, end-to-end supply chain
solutions and management looks forward to updating shareholders in more detail
at the Company's full year results in November 2025.
FINANCIAL REVIEW
Overview
The Company has traded well in the first half of the year and is in line with
full year expectations. Adjusted operating profit of £19.4m (HY2024: £18.8m)
and Adjusted profit after tax of £13.1m (HY2024: £11.8m) are both ahead of
last year, the Company has continued to generate a predictable level of cash
flow and average net debt in the period reduced to £1.1m (HY2024: £12.5m).
Revenue of £536.4m (HY2024: £539.8m) was down 0.6% on the prior period, with
lower volumes of newspapers and magazines offset by the benefits of cover
price increases, increased sales of collectables and the annualisation of the
contract wins in Q2 FY2024. Excluding the impact of contract wins, newspaper
and magazine revenues decreased by 3.1%.
Adjusted operating profit was £0.6m higher than last period (HY2025: £19.4m;
HY2024: £18.8m) due to a beneficial margin mix on sales and with cost
reduction plans more than offsetting the impact of inflation.
Adjusted profit before tax was £1.8m higher (HY2025: £17.7m; HY2024:
£15.9m), as lower borrowings, interest rates and fees since the May 2024
refinancing have reduced finance costs (HY2025: £1.7m; HY2024: £2.9m).
Adjusted profit after tax increased from £11.8m to £13.1m and adjusted EPS
has increased by 10.2% from 4.9p to 5.4p.
Statutory profit after tax was £13.5m (HY2024: £11.6m) and included a net
credit from adjusting items of £0.4m (HY2024: £0.2m cost). Adjusting items
in the period consisted of a £1.7m provision reversal following notification
of a second dividend from the McColls administrator, professional fees of
£0.6m in relation to the Pension regulator's review of the Tuffnells defined
benefit pension scheme and technology investment costs of £0.4m. Statutory
EPS increased by 16.7% from 4.8p to 5.6p.
Average Bank Net Debt for the period decreased from £12.5m in HY2024 to
£1.1m in HY2025, with good ongoing cash flow generation. Bank Net Debt
increased by £2.4m from £10.0m at HY2024 to £12.4m, due to the movement of
the period end in the Company's working capital cycle. Bank Net Debt on 24
February 2025 (52 weeks after the prior period balance sheet date) was £0.8m,
closer to the average Bank Net Debt point.
Free cash flow was £13.3m (HY2024: £4.2m) and benefitted from an increase in
profit (£1.2m higher than last year), smaller working capital outflow (£4.8m
lower), lower interest costs (£0.8m lower) and a net inflow from adjusting
items (£2.3m higher). Adjusting item inflows included the £1.6m first
dividend from McColls administrators and a £1.5m tax refund in respect of the
wind up of the Smiths News pension scheme during FY2022. These inflows were
offset by professional fees in relation to the review of the Tuffnells pension
scheme and technology investment costs.
An interim dividend of 1.75p (HY2024: 1.75p) per share (£4.2m) is due to be
paid in July 2025.
Adjusted results
Group
£m 26 weeks to 26 weeks to Change
1 Mar 2025 24 Feb 2024
Revenue 536.4 539.8 (0.6%)
Operating profit 19.4 18.8 3.2%
Net finance costs (1.7) (2.9) (41.4%)
Profit before tax 17.7 15.9 11.3%
Taxation (4.6) (4.1) 12.2%
Effective tax rate 26.0% 25.8% 0.2%
Profit after tax 13.1 11.8 11.0%
Revenue
Revenue was £536.4m (HY2024: £539.8m), down 0.6% on the prior period, with
lower newspaper and magazines volumes offset by the benefits of News UK and
Midlands News Association contract wins (Q2 FY2024), cover price increases and
increased sales of trading card and sticker collectables.
Newspaper revenues decreased by 0.4% (HY2024: 0.2% decrease) and by 2.6%
excluding the annualisation of the FY2024 contract wins. Magazine revenue was
4.6% lower (HY2024: 5.0% lower) with weekly titles performing better than
monthly titles. Revenue from collectables increased by 4.3% (HY2024: 4.5%
decrease), underpinned by good Premier League and Champions League football
collections and the popularity of the current Pokémon series.
Operating profit
Adjusted operating profit increased by £0.6m to £19.4m (HY2024: £18.8m),
driven by the following items:
· Increased contribution from revenue streams of £1.1m including beneficial
margin mix, improved sales from collectables, annualisation of FY2024 contract
wins, and increased contribution from growth activities.
· Cost reduction plans within depot and overheads (+£3.0m) which offset
inflationary increases (total -£2.2m).
· Additional technology costs of £0.6m, including license fees for the newly
implemented warehouse management system.
· The impact of £0.7m strategy investment costs not expected to repeat.
Profit after tax
Net finance costs of £1.7m (HY2024: £2.9m) were lower than the prior period,
benefitting from lower average debt, lower interest rates and lower fees under
the current financing agreement, which has been in place since 2 May 2024.
Taxation of £4.6m was £0.5m higher than the prior period due to higher
levels of profit. As a result, Profit after tax of £13.1m (HY2024: £11.8m)
was £1.3m higher than last year.
Statutory Results
Group
£m 26 weeks to 26 weeks to Change
1 Mar 2025 24 Feb 2024
Revenue 536.4 539.8 (0.6%)
Operating profit 20.0 18.6 7.5%
Net finance costs (1.7) (2.9) (41.4%)
Profit before tax 18.3 15.7 16.6%
Taxation (4.8) (4.1) 17.1%
Effective tax rate 26.2% 26.1% 0.1%
Profit after tax 13.5 11.6 16.4%
Statutory profit after tax of £13.5m was a £1.9m increase on the prior
period (HY2024: £11.6m). The increase was driven by the £1.3m increase in
Adjusted profit after tax described above, a £0.6m difference in adjusting
items after tax of (HY2025: credit £0.4m, HY2024: cost of £0.2m).
Earnings per share
Adjusted Statutory
26 weeks to 26 weeks to 24 Feb 2024 26 weeks to 26 weeks to
1 Mar 2025
1 Mar 2025
24 Feb 2024
Earnings attributable to ordinary shareholders (£m) 13.1 11.8 13.5 11.6
Basic weighted average number of shares (millions) 242.5 240.9 242.5 240.9
Basic Earnings per share 5.4p 4.9p 5.6p 4.8p
Diluted weighted number of shares (millions) 252.0 251.3 252.0 251.3
Diluted Earnings per share 5.2p 4.7p 5.4p 4.6p
Adjusted basic earnings per share increased by 0.5p to 5.4p (HY2024: 4.9p),
driven by the increase in profit after tax and a decrease in the weighted
average number of shares held by the employee benefit trust.
Statutory basic earnings per share increased by 0.8p to 5.6p (HY2024: 4.8p) as
it includes the impact of adjusting items which was a net credit of £0.4m
(HY2024: £0.2m cost).
Dividend
26 weeks to 26 weeks to
1 Mar 2025 24 Feb 2024
Dividend per share (proposed) 1.75p 1.75p
Dividend per share (paid and recognised) 5.40p 2.75p
The Board is proposing an interim dividend of 1.75p per share (HY2024: 1.75p
per share). The proposed dividend will be paid on 3 July 2025 to shareholders
on the register at close of business on 6 June 2025. The ex-dividend date will
be 5 June 2025.
The FY2024 final ordinary dividend of 3.40p per share (£8.3m) and special
dividend of 2.00p (£4.9m) were approved by shareholders at the Annual General
Meeting on 16 January 2025, paid on 6 February 2025 and is recognised in the
Interim Financial Statements.
Adjusting items
£m 26 weeks to 26 weeks to
1 Mar 2025 24 Feb 2024
Tuffnells costs (0.6) (0.1)
Technology transformation costs (0.4) -
Network and reorganisation costs (0.1) (0.1)
Impairment of receivables - McColl's 1.7 -
Total before taxation 0.6 (0.2)
Taxation (0.2) -
Total after taxation 0.4 (0.2)
Adjusting items after tax were a net credit of £0.4m (HY2024: costs of
£0.2m).
Tuffnells costs of £0.6m arose from professional fees incurred in responding
to a detailed information request from the Pensions Regulator in respect of
its formal investigation into the Tuffnells defined benefit pension scheme.
Technology transformation costs of £0.4m were incurred in respect of
implementing enhanced technology infrastructure, and £0.1m of costs arose in
relation to simplifying the Group structure. The Company also recognised a
£1.7m impairment reversal of the provision for McColl's receivables following
notification of a second dividend by the administrator. The second dividend
was received in cash after the period end.
In the prior period, the Company incurred £0.1m in respect of additional
insurance claims following Tuffnells falling into administration during FY2023
and £0.1m of in relation to simplifying the Group structure.
Further information on these items can be found in Note 3 to the Interim
Financial Statements. Adjusting items are defined in the Glossary to the
Interim Financial Statements and present a further measure of the Company's
performance. Excluding these items from profit metrics provides readers with
helpful additional information on the performance of the business across
periods because it is consistent with how the business performance is planned
by, and reported to, the Board and the Executive Team. Alternative Performance
Measures (APMs) should be considered in addition to, and are not intended to
be a substitute for, or superior to, IFRS measurements.
Free cash flow
£m 26 weeks to 26 weeks to
1 Mar 2025 24 Feb 2024
Adjusted operating profit 19.4 18.8
Depreciation and amortisation 4.6 4.0
Adjusted EBITDA 24.0 22.8
Working capital movements (2.5) (7.3)
Capital expenditure (2.3) (1.9)
Lease payments (3.3) (2.7)
Net interest and fees (1.6) (2.4)
Taxation (3.6) (4.3)
Other 0.5 0.2
Free cash flow (excluding Adjusting items) 11.2 4.4
Adjusting items (cash effect) 2.1 (0.2)
Free cash flow 13.3 4.2
Free cash flow of £13.3m (HY2024: £4.2m) was £9.1m higher, driven by a
£4.8m decrease in working capital outflows, and £2.3m higher cash inflows
from adjusting items.
The decrease in working capital of £2.5m (HY2024: £7.3m) since year end is
due to the timing of period end compared to the billing cycles of both
publishers and retailers.
Cash capital expenditure in the period was £2.3m (HY2024: £1.9m), an
increase of £0.4m and includes investments in technology, warehouses and
offices.
Lease payments of £3.3m (HY2024: £2.7m) increased by £0.6m due to lease
renewals contracted in FY2024.
Net interest and fees of £1.6m (HY2024: £2.4m) decreased by £0.8m, due to
lower average net debt, the absence of a term loan and a lower interest margin
following refinancing in the second half of FY2024 and lower SONIA rates.
Cash tax outflow of £3.6m (HY2024: £4.3m) was a £0.7m decrease, owing to a
refund of corporation tax received in the current period.
Other items relate to non-cash share-based payment expenses and are linked to
the expected outcome of performance related share schemes.
The total net cash impact of other Adjusting items was a net inflow of £2.1m
(HY2024: outflow of £0.2m). In the current period, there were two significant
inflows; £1.6m was received from the McColls administrators as a first
dividend, and a £1.5m tax refund in respect of the wind up of the Smiths News
pension scheme during FY2022. Offsetting these items were £0.6m of
professional fees in respect of the Pensions Regulator's investigation into
the Tuffnells pension scheme and £0.4m relating to technology investments. In
the prior period, the outflow of £0.2m resulted from the £0.1m settlement of
Tuffnells insurance claims and reorganisation costs of £0.1m.
Refer to the Glossary for a reconciliation of free cash flow to the net
movement in cash and cash equivalents.
Net debt
£m As at As at
1 Mar 2025 24 Feb 2024
Opening Bank Net Debt (11.0) (4.2)
Free cash flow 13.3 4.2
Dividend paid (13.2) (6.7)
Purchase of shares for employee benefit trust (1.5) (3.3)
Bank Net Debt (12.4) (10.0)
Bank Net Debt at 1 March 2025 was £12.4m, compared to £10.0m at 24 February
2024, an increase of £2.4m. Average daily net debt reduced to £1.1m from
£12.5m in the prior period.
Compared to average net debt, reported bank net debt is impacted by the
payment of the final ordinary dividend and special dividend which were paid on
6 February 2025 and a working capital outflow in the final week of the period,
part of the Company's normal working capital cycle.
The Company's Bank Net Debt: Bank EBITDA ratio remained at 0.3x (HY2024:
0.3x). The prior period ended before major publisher payments were made at the
end of the calendar month, which benefitted reported Bank Net Debt.
The Bank Net Debt: Bank EBITDA ratio of 0.3x is within our main leverage
covenant ratio of 2.50x (HY2024: 1.50x) and we remain within all our other
bank covenant tests at the period end.
Refer to the Glossary for a reconciliation of Bank Net Debt (which excludes
IFRS 16 lease liabilities and unamortised arrangement fees) to the balance
sheet.
During the current period, the FY2024 final ordinary dividend of £8.3m
(HY2024: FY2023 final dividend of £6.7m) and a special dividend of £4.9m
(HY2024: £nil) were paid, bringing the total dividends paid in respect of
FY2024 to £17.4m (FY2023: £10.0m).
PRINCIPAL AND EMERGING RISKS
The Company has a clear framework in place to continuously identify and review
both the principal and emerging risks it faces. This includes, amongst others,
a detailed assessment of business and functional teams' principal and emerging
risks and regular reporting to, and robust challenge from, both the Executive
Team and Audit Committee. The directors' assessment of these risks is aligned
to the strategic business planning process and regulatory landscape.
Specifically, key risks are plotted on risk maps with descriptions, owners,
and mitigating actions, reporting against a level of materiality (principally
relating to impact and likelihood) consistent with their size. These risk maps
are reviewed and challenged by the Executive Team and Audit Committee and
reconciled against the Company's risk appetite. As part of the regular
principal risk process, a review of emerging risks (internal and external) is
also conducted, and a list of emerging risks is maintained and rolled-forward
to future discussions by the Executive Team and Audit Committee. Where
appropriate, these emerging risks may be brought into the principal risk
registers. Additional risk management support is provided as required by
external experts in areas of technical complexity to complete our bottom-up
and top-down exercises.
As part of the Board's ongoing assessment of the principal and emerging risks,
the Board has considered the performance of the business, its markets, the
changing regulatory and macro-economic landscape, the Company's future
strategic direction and ambition as well as the ongoing climate-related risk
environment. The directors have carried out a robust assessment of the
Company's emerging and principal risks, including those that could threaten
its business model, future performance, solvency or liquidity. Risks are still
subject to ongoing scrutiny, monitoring and appropriate mitigation.
The table below details each principal business risk, those aspects that would
be impacted were the risk to materialise, our assessment of the current status
of the risk and how each is mitigated.
Principal risks and potential impact Mitigations Strategic link/ change
1. Cyber security
Global trends demonstrate a continued high volume of cyber-attacks against all · Defined risk-based approach to the information security roadmap Strategic link:
industry sectors and that cyber threats continue to indiscriminately evolve. and technology strategy which is aligned to the strategic plans.
Technology
To meet the needs of our stakeholders, our IT infrastructure and data · Regular tracking of key programmes against spend targets and
processes need to be flexible, reliable and secure from cyber-attacks. delivery dates.
Secure infrastructure acts as a deterrent to and helps prevent and/or mitigate · The Company assesses cyber risk on a day-to-day basis, using Change:
the impact of external cyber-attack, internal threat or supplier-related proactive and reactive information security controls to detect and mitigate
breach, which could cause service interruption and/or the loss of Company and common threats. Stable - despite ongoing investment and enhancements in the Company's IT
customer data.
infrastructure and IT security the backdrop remains heightened, leading to a
· Dedicated information security investments and access to stable risk assessment.
Cyber incidents could lead to major adverse customer, financial, reputational third-party cyber security specialists, including 24/7 security monitoring,
and regulatory impacts. incident response and specialist testing.
· The Company encourages a cyber-aware culture by undertaking
exercises, such as computer-based training and simulated phishing attacks and
regular communications about specific cyber threats.
· All functions that place reliance on business systems have
established business continuity plans that set out how to conduct key
activities if a system interruption takes place due to a disruptive event such
as a cyber-attack.
2. Macro-economic uncertainty
Deterioration in the macro-economic environment could result in supply side · Annual budgets and forecasts take into account the current Strategic link:
cost inflation and/or a reduction in demand-side sales volumes. macro-economic environment to set expectations internally and externally,
allowing for or changing objectives to meet short and medium term financial Cost and efficiencies, Operations
Supply-side macro-economic pressures could present the Company with additional targets.
cost challenges, e.g. increased competition in the distribution labour market
and rises in fuel and utility prices. Adverse changes to economic conditions · Weekly cost monitoring enables oversight and action on a timely
could result in reduced consumer demand for newspapers and magazines and/or basis. Change:
reduction in titles/editions. These cost increases and sales pressures present
a risk when they cannot be fully mitigated through increased prices or other · Cover price increases in magazine and newspaper titles provide Stable - whilst the growth outlook for the UK economy remains uncertain in
productivity gains. some offset against the impact of volume decline. 2025, inflation has moderated, although still above the Bank of England's
target range. Increases in the National Living Wage in excess of inflation and
This could result in deterioration in the level of profitability in both the · Predictable level of volume decline within the news and magazine Employers' National Insurance took effect in April 2025. In addition, the
short and medium term and impacts on the Company's ability to execute its wholesaling business enables cost optimisation planning. Employment Rights Bill is expected to receive royal ascent in the near future
strategies, including level of debt and liquidity objectives.
and this is expected to add to the Company's cost base.
· Use of fixed-term contracts as a hedge against rapidly rising
prices e.g. energy costs.
· The Company continues to be significantly cash generating to
support its strategic priorities.
3. Changes to retailers' commercial environment
Our largest retailers (e.g. grocers and symbol group members) remain under · Our EPoS-based returns (EBR) solution is utilised by our largest Strategic link:
significant pressure to maximise sales and profitability by channel within retailers, improving staff efficiency in managing the magazine category,
their retail stores and at associated sale outlets, such as at petrol thereby reducing cost to the retailer. Cost and efficiencies
forecourt stores. This could result at any time in a category review of the
newspaper and/or magazine channel, leading to a significant reduction in · Potential to extend EBR to newspapers in order to broaden
newspapers' and/or magazines' selling space-in-store (or its location) in efficiency-benefits to retailers.
favour of other higher margin products and/or the delisting of all/particular
Change:
titles of newspapers and/or magazines. · Supply-side shrink activities underway and renewed focus improve
channel profitability and reduce complexity associated with the category. Stable
A reduction in (or change in location of) sales space and/or full delisting of
newspapers and/or magazines by our largest retailers (or a high number of · Form stronger partnerships with emerging retailers to stock
other retailers) could materially reduce the Company's revenue, profitability magazines and newspapers.
and cash flow.
· Monitor the impact to the business of a change to major retail
customer ownership.
4. Acquisition and retention of labour
Due to competition and constraints in the current distribution labour market, · We seek to offer market competitive terms to ensure talent Strategic link:
this could lead to an increased risk of being unable to recruit and/or retain remains engaged.
warehouse colleagues and support staff.
People first,
· We offer long-term contracts with our sub-contracted delivery
The same pressures are also being felt in sourcing and retaining delivery partners. Culture and values,
sub-contractors as well as filling in-house roles within our central support
functions. · We use a variety of platforms to recruit employees and delivery Cost and efficiencies
sub-contractors.
A failure to maintain an appropriate level of resourcing could result in
increased costs, employee disengagement and/or loss of management focus which · The level of vacancies across warehouse and delivery
underpin our ability to address the strategic priorities and to deliver sub-contractors is monitored daily. Change:
forecasted performance.
· We undertake workforce planning; performance, talent and Decreasing - whilst retaining delivery sub-contractors remains challenging in
succession initiatives; learning and development programmes; and promote the parts of our territory, in-house vacancies have reduced, and staff turnover
Company's culture and core values. compares favourably with our sector.
· Retention plans are reviewed to address key risk areas, and
attrition across the business is regularly monitored.
· Regular surveys are undertaken to monitor the engagement of
colleagues.
5. Growth and diversification
A successful growth and diversification strategy is essential to the long-term · Strong project management and governance in place to sign-off Strategic link:
success of the Company. growth initiatives and oversee their implementation.
Cost and efficiencies
Implementing new business growth opportunities to increase the Company's · A Growth Business Development Group and Growth Operations
revenue and profit streams carries an execution risk to achieving our vision Delivery Steering Committee have been established to review and control new
and purpose. business opportunities and then plan and measure the impact of these
opportunities on established operations. Change:
· Experimentation through trials of new business opportunities is Stable - as Growth initiatives become a more significant part of our business,
deployed to assess the demand and potential economic benefit of such space and capacity constraints at both our sites and in delivery vehicles are
opportunities. increasing.
· The Executive Team's balanced scorecard of key performance
indicators ensures sub-optimal performance is tracked and monitored on a
regular basis and allows appropriate interventions to be made.
6. Sustainability and climate change
Our sustainability linked risks extend beyond the physical and transitional · Board Sustainability Committee established (chaired by the Chief Strategic link:
risks associated with climate change which we have previously identified, such Financial Officer) to consider and determine the Company's sustainability
as a scarcity of resources, extreme weather events, power outages, increasing strategy and progress, together with risk environment and activities and Cost and efficiencies,
regulation and associated cost in response to a drive to 'net zero' carbon actions.
emissions and the increasingly stringent air quality emission zones.
Operations,
Regulatory requirements and reporting obligations on environmental, social and · Dedicated management Sustainability Steering Committee
governance (ESG) matters are increasing and ongoing investment is required to established (also chaired by the Chief Financial Officer) coordinates the Sustainability
maintain a safe working environment and to protect the Company from Company's day-to-day activities and actions in delivering the Company's
cyber-attacks, as well as making progress in delivering on our diversity and sustainability strategy, including in relation to climate change.
inclusion ambitions. In common with all major organisations, there is a risk
of reputational damage and/or loss of revenue if the Company fails to meet · We work with suppliers to ensure they share the Company's vision Change:
stakeholder expectations across our sustainability framework. to act on sustainability and climate change.
Stable
· Emissions and air quality targets in UK towns and cities are
monitored by a central team in the Operations function which ensures the
Company can fulfil its obligations to customers and remain compliant with
legal requirements.
· Operational sites are reviewed for their resilience to extreme
weather events, such as flooding, with upgrades and interventions made where
these are cost-effective. Depots are relocated to new sites (e.g. during lease
break windows) where this represents a better option than adapting an existing
location.
7. Major newspaper titles exit the market or move to digital only editions
Significant decline in advertising and/or circulation revenues, together with · We seek to ensure full availability of alternative newspaper Strategic link:
rising production costs, could lead to one or more national newspaper titles titles to maximise substitution opportunities for customers.
exiting the market and/or publications being taken fully digital. This could
Cost and efficiencies,
lead to a significant deterioration in the Company's profitability and cash · Partial mitigation against newspaper title closures is built into
flow in both the short and medium term, as well as impacting on its ability to our contracts with major publishers.
execute its strategies.
· Ongoing successful execution of our growth and diversification Change:
strategy provides longer-term mitigation through alternative profitable
revenue streams. Stable
8. Legal and regulatory compliance
The Company is required to be compliant with all applicable laws and · Changes in laws and regulations are monitored, with policies and Strategic link:
regulations. Failure to adhere to these could result in financial penalties, procedures being updated as required.
third party redress, and/or reputational damage.
Technology, Sustainability, Operations
· Business-wide mandatory training programmes for higher-risk
Key areas of legal and regulatory compliance include: regulatory areas.
· GDPR · External experts are engaged where applicable. Change:
· Health and Safety · All major policies are reviewed by the Board or Audit Committee Stable
on an annual basis.
· Tax compliance
· Operational auditing and monitoring systems for higher risk
· Environmental legislation areas.
· Employment law
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
· the unaudited condensed set of financial statements has been prepared in
accordance with UK adopted IAS 34 'Interim Financial Reporting';
· the interim management report includes a true and fair review of the
information required by DTR 4.2.7R, being an indication of important events
during the first 26 weeks and description of principal risks and uncertainties
for the remaining 26 weeks of the year; and
· the interim management report includes a true and fair review of the
information required by DTR 4.2.8R, being disclosure of related parties'
transactions that have taken place in the first 26 weeks of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
On behalf of the Board
Jonathan Bunting
Paul Baker
Chief Executive Officer Chief Financial Officer
6 May 2025 6 May 2025
INTERIM FINANCIAL STATEMENTS
Condensed Consolidated Income Statement (Unaudited)
For the 26 weeks to 1 March 2025
£m Note 26 weeks to 1 March 2025 26 weeks to 24 Feb 2024
Adjusted Adjusting items* Total Adjusted Adjusting items* Total
Revenue 536.4 - 536.4 539.8 - 539.8
Cost of sales (499.1) - (499.1) (504.9) - (504.9)
Gross profit 37.3 - 37.3 34.9 - 34.9
Administrative expenses 3 (17.8) (1.1) (18.9) (16.2) (0.2) (16.4)
Net impairment (loss)/reversal on trade receivables (0.1) 1.7 1.6 - - -
Income from joint ventures - - - 0.1 - 0.1
Operating profit 3 19.4 0.6 20.0 18.8 (0.2) 18.6
Finance costs (1.8) - (1.8) (3.2) - (3.2)
Finance income 0.1 - 0.1 0.3 - 0.3
Profit before tax 3 17.7 0.6 18.3 15.9 (0.2) 15.7
Income tax expense 4 (4.6) (0.2) (4.8) (4.1) - (4.1)
Profit for the period attributable to equity shareholders 13.1 0.4 13.5 11.8 (0.2) 11.6
Earnings in pence per share
Basic 6 5.4 5.6 4.9 4.8
Diluted 6 5.2 5.4 4.7 4.6
Equity dividends pence per share (paid and proposed) 5 1.75 1.75
*This measure is described in the Glossary. Adjusting items are set out in
Note 3 of the interim financial statements.
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
For the 26 weeks to 1 March 2025
£m Notes 26 weeks to 26 weeks to
1 Mar 2025 24 Feb 2024
Profit for the period 13.5 11.6
Items that may be reclassified to the Income Statement:
Currency translation differences - (0.1)
Items that will not be reclassified to the Income Statement:
Tax credit on pension surplus 7 1.5 -
Total comprehensive income for the period 15.0 11.5
Consolidated Balance Sheet (Unaudited)
As at 1 March 2025
£m Note As at As at
1 Mar 2025 31 Aug 2024
Non-current assets
Intangible assets 2.5 2.4
Property, plant and equipment 10.1 9.7
Right of use assets 29.5 29.5
Interest in joint ventures 4.7 4.6
Deferred tax assets 0.9 1.3
47.7 47.5
Current assets
Inventories 15.9 22.1
Trade and other receivables 103.2 102.1
Cash and cash equivalents 8 6.3 7.0
Corporation tax receivable - 0.9
125.4 132.1
Total assets 173.1 179.6
Current liabilities
Trade and other payables (120.3) (128.5)
Corporation tax payable (0.2) -
Lease liabilities (5.4) (5.5)
Provisions 9 (0.6) (1.3)
(126.5) (135.3)
Non-current liabilities
Borrowings 8 (18.4) (17.6)
Lease liabilities (25.3) (25.4)
Provisions 9 (4.8) (4.6)
(48.5) (47.6)
Total liabilities (175.0) (182.9)
Total net liabilities (1.9) (3.3)
Equity
Called up share capital 11 12.4 12.4
Share premium account 11 60.5 60.5
Other reserves (282.7) (283.6)
Retained earnings 207.9 207.4
Total shareholders' deficit (1.9) (3.3)
Condensed Consolidated Statement of Changes in Equity (Unaudited)
For the 26 weeks to 1 March 2025
£m Note Share Capital Share Premium Account Other Retained Earnings Total equity
Reserves
Balance at 1 September 2024 12.4 60.5 (283.6) 207.4 (3.3)
Profit for the period - - - 13.5 13.5
Tax credit on pension surplus - - - 1.5 1.5
Total comprehensive income for the period - - - 15.0 15.0
Dividends paid 5 - - - (13.2) (13.2)
Employee share schemes purchases - - (1.5) - (1.5)
Employee share scheme awards - - 2.4 (1.5) 0.9
Recognition of share-based payments, net of tax - - - 0.5 0.5
Deferred tax recognised in equity - - - (0.3) (0.3)
Balance at 1 March 2025 12.4 60.5 (282.7) 207.9 (1.9)
£m Note Share Capital Share Premium Account Other Retained Earnings Total equity
Reserves
Balance at 26 August 2023 12.4 60.5 (284.1) 194.9 (16.3)
Profit for the period - - - 11.6 11.6
Currency translation differences - - (0.1) - (0.1)
Total comprehensive income for the period - - (0.1) 11.6 11.5
Dividends paid 5 - - - (6.7) (6.7)
Employee share schemes purchases - - (3.3) - (3.3)
Employee share scheme awards - - 3.9 (3.9) -
Recognition of share-based payments, net of tax - - - 1.2 1.2
Deferred tax recognised in equity - - - (0.3) (0.3)
Balance at 24 February 2024 12.4 60.5 (283.6) 196.8 (13.9)
Condensed Consolidated Cash Flow Statement (Unaudited)
For the 26 weeks to 1 March 2025
£m Note 26 weeks to 26 weeks to
1 Mar 2025 24 Feb 2024
Net cash inflow from operating activities 7 20.4 11.1
Investing activities
Interest received 0.1 0.3
Dividends received from joint ventures 0.1 0.1
Purchase of fixed assets (2.3) (1.9)
Net cash used in investing activities (2.1) (1.5)
Financing activities
Interest paid (1.7) (2.7)
Dividend paid (13.2) (6.7)
Repayments of lease principal (3.3) (2.7)
Net increase in revolving credit facility 8 0.7 -
Repayment of term loan 8 - (15.0)
Purchase of shares for employee benefit trust (1.5) (3.3)
Net cash used in financing activities (19.0) (30.4)
Net decrease in cash and cash equivalents (0.7) (20.8)
Opening net cash and cash equivalents 7.0 37.3
Closing net cash and cash equivalents 6.3 16.5
Notes to the Condensed Unaudited Interim Financial Statements
For the 26 weeks to 1 March 2025
1 Basis of Preparation
Smiths News plc is comprised of the Company and its subsidiaries (together
referred to as the 'Group').
These unaudited condensed consolidated interim financial statements have been
prepared in accordance with UK-adopted IAS 34 'Interim Financial Reporting'.
They do not include all of the information required for full annual financial
statements and should be read in conjunction with the 2024 Annual Report and
Accounts. The financial period represents the 26 weeks ended 1 March 2025
(prior period 26 weeks ended 24 February 2024).
The Group has applied the same accounting policies and methods of computation
in these interim consolidated financial statements, as in its statutory
accounts for the 53 weeks ended 31 August 2024, with the exception of changes
as detailed in Note 2.
These condensed consolidated interim financial statements do not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. A copy
of the statutory accounts for the 53 weeks ended 31 August 2024 has been filed
with the Registrar of Companies. The auditor's report on those accounts was
not qualified, did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying the report and did not
contain statements under section 498(2) or (3) of the Companies Act 2006. The
auditor's review opinion on the 26-week period ended 1 March 2025 is at the
end of this report.
Going concern
The condensed consolidated interim financial statements have been prepared on
a going concern basis.
The Group had a net liability position of £1.9m as at 1 March 2025. All bank
covenant tests were met at the period end with the key Bank Net Debt: Bank
EBITDA ratio of 0.3x which is below the period end facility agreement covenant
test threshold of 2.5x (H1 2024: 1.5x). The threshold remains at 2.5x
throughout the life of the facility and tested at each quarter end. If this
covenant was breached, the loan could become repayable on demand.
The Group utilises a £40.0m Revolving Credit Facility (RCF) to manage its
cash needs. At the end of the period £19.8m was available and the Group had
£6.3m of cash on hand, giving headroom of £26.1m. The average daily Bank Net
Debt during the period was £1.1m (H1 2024: £12.5m). The RCF is in place to
accommodate the Group's intra-month working capital cash flow cycle which
generates a predictable cash swing.
Bank facility
The Group's banking facility at the balance sheet date comprises an RCF of
£40.0m and an uncommitted accordion facility of £10.0m. The RCF is available
less committed letters of credit amounting to £1.5m (see Note 10). The
agreement is with HSBC and Santander.
The facility's current margin is 2.45% per annum over SONIA and at the balance
sheet date had a final maturity date of 2 May 2027 with the option of two
one-year extensions with lender consent on the first and second anniversaries.
After the balance sheet date, the first one-year extension was exercised which
extended the maturity date to 2 May 2028.
Reverse stress testing
The directors have prepared their base case forecast which represents their
best estimate of cash flows over the going concern period which is the 16
months up to 29 August 2026, and in accordance with FRC guidance have prepared
a reverse stress test that identifies either a lack of liquidity or breach of
the Bank Net Debt: Bank EBITDA ratio that at peak debt would create a scenario
which could lead to the facility being exhausted or becoming repayable on
demand, respectively.
A covenant break would occur in August 2026 if EBITDA was 77% below the Board
approved three-year plan. The directors consider the likelihood of this level
of downturn to be remote based on:
· current trading which is in line with expectations;
· year-on-year declines in revenues would have to be significantly
greater than historical trends;
· publisher contracts secured representing 91% of existing revenues
through to 2029; and
· the Company continues to trade with adequate profit to service
its debt covenants.
Mitigating actions
In the event the break environment scenario went from being remote to possible
then management would seek to take mitigating actions to maintain liquidity
and compliance with the bank facility covenants.
The options within the control of management would be to:
· Optimise liquidity through working capital management of the peak-to-trough
intra-month movement. Utilising existing vendor management finance
arrangements;
· Arrangements with retailers and optimising contractual payment cycles to
suppliers which would improve liquidity headroom;
· Not pay planned dividend payments;
· Delay non-essential capex projects;
· Cancel discretionary annual bonus payments;
· Increase the principal facility amount by exercising the £10m accordion
option in the RCF Facility; and
· Identify other overhead and depot savings.
More extreme mitigating actions would also be available if the scenario arose.
Assessment
Having considered the above and the funding requirements of the Group, the
directors are confident that headroom under the bank facility remains
adequate, future covenant tests can be met and there is a reasonable
expectation that the business can meet its liabilities as they fall due for a
period of greater than 12 months (being an assessment period of 16 months)
from the date of approval of the Interim Financial Statements. For this
reason, the directors continue to adopt the going concern basis in preparing
the financial statements and no material uncertainty has been identified.
2 Accounting policies
Changes in accounting policies
During the period the Group has adopted the following amendments to accounting
standards:
• Classification of Liabilities as Current or Non-current -
Amendments to IAS 1;
• Non-current Liabilities with Covenants - Amendments to IAS 1;
• Lease liabilities in a Sale and Leaseback - Amendments to IFRS
16; and
• Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7
These amendments adopted had no impact on the financial statements to prior
periods and are not expected to significantly affect the current or future
periods.
New standards in issue but not yet effective
IFRS 18 - Presentation and Disclosure of Financial Statements was issued in
April 2024 and replaces IAS 1 - Presentation of Financial Statements. The
standard sets out new requirements for presentation in the income statement,
including specified totals and subtotals, additional guidance on aggregation
and disaggregation, and additional required disclosures in respect of
management performance measures (which replace alternative performance
measures).
The impact of this standard on the Group is currently being assessed. The
standard is effective from 1 January 2027 with early adoption permitted.
There are no other standards that are not yet effective and that would be
expected to have a material impact on the entity in the current or future
reporting periods and on foreseeable future transactions.
Alternative performance measures
In reporting financial information, the Group presents alternative performance
measures (APMs), which are not defined or specified under the requirements of
IFRS.
The Group believes that these APMs (listed in the Glossary), are not
considered to be a substitute for, or superior to, IFRS measures but provide
stakeholders with additional helpful information on the performance of the
business. These APMs are consistent with how the business performance is
planned and reported within the internal management reporting to the Board and
Executive Team.
The APMs do not have standardised meaning prescribed by IFRS and therefore may
not be directly comparable to similar measures presented by other companies.
Estimates and judgements
The preparation of these condensed consolidated interim financial statements
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these
estimates.
Key accounting judgements
The significant judgements made are as follows:
Revenue recognition - sales of newspapers and magazines
The Group recognises the wholesale sales price for its sales of newspapers and
magazines. The Group is considered to be the principal based on the following
indicators of control over its inventory: discretion to establish prices; it
holds some of the risk of obsolescence once in control of the inventory; and
has the responsibility of fulfilling the performance obligation on delivery of
inventory to its customers. If the Group were considered to be the agent,
revenue and cost of sales would reduce by £453.9m (H1 2024: £458.7m).
Adjusting items
Adjusting items of income or expense are excluded in arriving at adjusted
operating profit to present a further measure of the Group's performance. Each
adjusting item is considered to be significant in nature and/or quantum,
non-recurring in nature and/or considered to be unrelated to the Group's
ordinary activities or consistent with items treated as adjusting in prior
periods. Excluding these items from profit metrics provides readers with
helpful additional information on the performance of the business across
periods because it is consistent with how the business performance is planned
by, and reported to, the Executive Team and the Board.
The classification of adjusting items requires significant management
judgement after considering the nature and intentions of a transaction.
Adjusted measures are defined with other APMs in the Glossary.
Based on the nature of the transactions, adjusting items after tax totalled a
credit of £0.4m (H1 2024: cost of £0.2m) with a breakdown included within
Note 3.
Key sources of estimation uncertainty
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and
future periods.
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the end of the reporting period that may have a significant
risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are as follows.
Property provision
The Group holds a property provision which estimates the future liabilities to
restore leased premises to an agreed standard at the date the lease is
terminated. The provision is calculated based on key assumptions including the
length of time properties will be occupied, the future costs of restoration
and the condition of the property at the balance sheet date.
The property provision represents the estimated future cost of the Group's
potential dilapidation costs on properties across the Group. Provisions have
been adjusted for the effect of inflation and discounted to present value and
this discount will be unwound over the life of the leases.
A change in any of these assumptions could materially impact the provision
balance. Refer to Note 9 for further details on the sensitivity of the
assumptions used to calculate the property provision. The property provisions
carrying value at the end of the period was £4.8m (FY2024: £5.2m)
Impairment of receivables
At 1 March 2025 the Group holds an expected credit loss provision of £2.1m
(FY2024: £3.8m) representing 39% (FY2024: 70%) of the total receivables
balance of £5.5m from McColl's Retail Group as at the administration date of
9 May 2022.
On 31 October 2024, £1.6m was recovered from the administrators in cash as a
first interim dividend. On 27 January 2025, notification was received of the
intent to declare a second interim dividend, which was subsequently received
on 14 March 2025, totalling £1.7m and reducing the outstanding gross
receivable to £2.1m. A final dividend is expected to be declared by the
administrators during summer 2025 with no further estimate of expected
additional recovery provided.
In consideration of the outstanding receivable and the uncertainty as to the
quantum of the final dividend, management has determined that the provision of
£2.1m should be held at the balance sheet date.
3 Adjusting items
The table below summarises amounts that have been classified as
adjusting items in the period:
£m 26 weeks to 26 weeks to
1 March 24 February 2024
2025
Tuffnells costs (a) (0.6) (0.1)
Technology transformation costs (b) (0.4) -
Network and reorganisation costs (c) (0.1) (0.1)
Administrative expenses (1.1) (0.2)
Impairment reversal on trade receivables (d) 1.7 -
Total before tax 0.6 (0.2)
Taxation (0.2) -
Total after taxation 0.4 (0.2)
The Group incurred a total net credit of £0.6m (H1 2024: costs of £0.2m)
adjusting items before tax and credits of £0.4m (H1 2024: costs of £0.2m)
after tax respectively.
a) Tuffnells costs £0.6m (H1 2024: £0.1m)
In the current period professional fees of £0.6m were incurred in respect of
the Group responding to a detailed information request from the Pensions
Regulator in respect of its formal investigation relating to the Tuffnells
defined benefit pension scheme and the Company's former period of ownership of
Tuffnells.
In the prior period costs of £0.1m were incurred to provide for additional
insurance claims held as a result of Tuffnells falling into administration in
June 2023. No further adjustment has been made in the current period to the
remaining insurance provision.
The cash impact during the period was an outflow of £0.7m (H1 2024: £0.1m)
being £0.6m of professional fees and £0.1m of insurance settlements.
b) Technology transformation costs £0.4m (H1 2024: £nil)
During the prior year period, the Group commenced a transformation programme
to enhance its technology infrastructure and enable alignment to the Group's
vision and strategy.
Implementation costs of £0.4m (H1 2024: £nil) have been recognised as
adjusting items given that costs over the three-year programme are expected to
be a significant change to the Company. The cash impact was an outflow of
£0.3m.
c) Network and re-organisation costs £0.1m (H1 2024: £0.1m)
During the current period, an additional £0.1m (H1 2024: £0.1m) of costs
were provided for with regards to simplifying the DMD group structure.
The cash impact during the period was an outflow of £0.1m (H1 2024: £0.1m).
d) Impairment reversal on trade receivables £1.7m (H1 2024: £nil)
In respect of the administration of McColl's Retail Group during FY2022, at
FY2024 a provision of £3.8m was held, representing management's best estimate
of recovery of 30% of the total claim filed, as per the issued notification
from the administrators.
On 31 October 2024, £1.6m was recovered from the administrators in cash as a
first interim dividend. On 14 March 2025, a second interim dividend of £1.7m
was recovered, reducing total gross outstanding receivables to £2.1m. A final
dividend is expected to be declared by the administrators during summer 2025
with no further estimate of expected additional recovery provided.
In consideration of the outstanding receivable and the uncertainty as to the
quantum of the final dividend, management has determined that the provision of
£2.1m should be held at the balance sheet date. The reduction in provision of
£1.7m since year end is reported as an adjusting item on the same basis as
previous impairment losses and reversals recognised during the prior periods.
4 Income tax charge
The income tax charge for the 26 weeks ended 1 March 2025 is calculated based
upon the tax rates expected to apply to the Group for the full year. The
effective rate of tax on adjusted profits before tax was 26.0% (H1 2024:
25.8%).
A tax rate of 25% was applied to UK corporation tax, and for other
jurisdictions taxation was applied using prevailing rates.
5 Dividends
Proposed dividends for the period 26 weeks to 1 Mar 2025 26 weeks to 24 Feb 2024 26 weeks to 1 Mar 2025 26 weeks to 24 Feb 2024
Per share Per share £m £m
Interim dividend - proposed 1.75p 1.75p 4.2 4.2
Recognised dividends for the period Per share Per share £m £m
Final dividend - prior year 3.40p 2.75p 8.3 6.7
Special dividend - prior year 2.00p - 4.9 -
An interim dividend of 1.75p per ordinary share is proposed for the 26-week
period to 1 March 2025 (H1 2024: 1.75p per ordinary share), which is expected
to be paid on 3 July 2025 to all shareholders who are on the register of
members at the close of business on 6 June 2025. The ex-dividend date will be
5 June 2025.
The FY2024 final ordinary dividend of 3.40p per share (£8.3m) and special
dividend of 2.00p (£4.9m) were approved by shareholders at the Annual General
Meeting on 16 January 2025, paid on 6 February 2025 and is recognised in the
Interim Financial Statements.
6 Earnings per share
26 weeks to 1 Mar 2025 26 weeks to 24 Feb 2024
Earnings (£m) Weighted average number of shares million Pence per share Earnings (£m) Weighted average number of shares million Pence per share
(p) (p)
Weighted average number of shares in issue 247.7 247.7
Shares held by the ESOP (weighted) (5.2) (6.8)
242.5 240.9
Basic earnings per share (EPS)
Adjusted earnings attributable to ordinary shareholders 13.1 242.5 5.4 11.8 240.9 4.9
Adjusting items 0.4 (0.2)
Earnings attributable to ordinary shareholders 13.5 242.5 5.6 11.6 240.9 4.8
Diluted EPS
Effect of dilutive securities 9.5 10.4
Diluted Adjusted EPS 13.1 252.0 5.2 11.8 251.3 4.7
Diluted EPS 13.5 252.0 5.4 11.6 251.3 4.6
The calculation of diluted EPS reflects the potential dilutive effect of
employee incentive schemes of 9.5m dilutive shares (H1 2024: 10.4m).
7 Net cash inflow from operating activities
26 weeks to 26 weeks to
£m 1 Mar 2025 24 Feb 2024
Operating profit 20.0 18.6
Share of profits of joint ventures (0.1) (0.1)
Depreciation of property, plant and equipment 1.2 1.0
Depreciation of right of use assets 3.2 2.8
Amortisation of intangible assets 0.2 0.2
Share-based payments 0.5 0.2
Decrease in inventories 6.2 0.6
Increase in receivables (1.2) (3.4)
Decrease in payables (7.0) (3.8)
Decrease in provisions (0.5) (0.7)
Income tax paid (3.6) (4.3)
Refund of tax on pension surplus 1.5 -
Net cash inflow from operating activities 20.4 11.1
Net cash flow from operating activities is stated after a net inflow of £2.1m
(H1 2024: £0.2m of outflows) from adjusting items.
During the period the Company received a £1.5m refund of an overpayment of
tax made in respect of the wind up of the News Section of the WH Smith Pension
Trust defined benefit pension scheme during FY2022. This amount has been
presented in other comprehensive income consistent with the original £5.1m
charge recognised during FY2022.
8 Cash and borrowings
Cash and borrowings by currency (sterling equivalent) are as follows:
£m Sterling Euro USD Total At
1 Mar 2025 31 Aug 2024
Cash and cash equivalents 5.6 0.5 0.2 6.3 7.0
Revolving credit facility - disclosed within non-current liabilities (18.7) - - (18.7) (18.0)
Unamortised arrangement fees - disclosed within non-current liabilities 0.3 - - 0.3 0.4
Total borrowings (18.4) - - (18.4) (17.6)
Net borrowings (12.8) 0.5 0.2 (12.1) (10.6)
Total borrowings
Amount due after 12 months (18.4) - - (18.4) (17.6)
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits with an original maturity of three months or less. The carrying
amount of these assets approximates to their fair value.
The Group has a financing facility in place comprising a £40.0m Revolving
Credit Facility (RCF) with a £10.0m accordion option. The agreement is with
HSBC and Santander. This initial arrangement had a final maturity date of 2
May 2027 with the option of two one-year extensions on the first and second
anniversaries. After the balance sheet date, the first one-year extension was
exercised which extended the maturity date to 2 May 2028.
At 1 March 2025 £18.7m of the RCF was drawn. The total available amount is
£40.0m for the life of the facility. As part of the terms of the financing,
the Company and its principal trading subsidiaries provide security over their
assets to the lenders. The current rate on the facility is 2.45% per annum
over SONIA.
At 1 March 2025, the Company had £21.3m (FY 2024: £22.0m) of undrawn
committed borrowing facilities in respect of which all conditions precedent
had been met. This is partially reduced by letters of credit of £1.5m (2024:
£1.5m); further details are included in Note 10.
During the period, the net increase of £0.7m in borrowings comprised £74.0m
of cash inflows from drawing down the RCF and £73.3m of cash outflows from
repayment of the RCF.
Analysis of net debt
As at As at
£m 1 Mar 2025 31 Aug 2024
Cash and cash equivalents 6.3 7.0
Non-current borrowings (18.4) (17.6)
Net borrowings (12.1) (10.6)
Lease liabilities (30.7) (30.9)
Net debt (42.8) (41.5)
9 Provisions
£m Reorganisation provisions Insurance and legal provision Property provisions Total
At 1 September 2024 (0.2) (0.5) (5.2) (5.9)
Transfer 0.1 (0.1) - -
Charged to income statement (0.1) - (0.1) (0.2)
Utilised in period - 0.2 0.6 0.8
Unwinding of discount utilisation - - (0.1) (0.1)
At 1 March 2025 (0.2) (0.4) (4.8) (5.4)
£m 1 Mar 2025
Included within current liabilities (0.6)
Included within non-current liabilities (4.8)
Total (5.4)
Reorganisation provisions of £0.2m relate to the ongoing restructure of the
DMD business. During the period £0.1m of provisions were transferred to
insurance and legal claims to better reflect the nature of these provisions.
Insurance and legal provisions represent the expected future costs of
employer's liability, public liability, motor accident claims and legal
claims. Included within the total balance is £0.3m (FY2024: £0.5m) relating
to claims from the Tuffnells business prior to disposal.
The property provision represents the estimated future dilapidation costs
across the Group's leased properties. These provisions have been discounted to
present value, and this discount will be unwound over the life of the leases.
The provisions cover the ten-year period to 2035. The Group has performed
sensitivity analysis on the property provision using the possible scenarios
below:
· if the discount rate changes by +/- 0.5%, the property provision
would change by +/- £0.2m;
· if the repair cost per square foot changes by +/- £1.00, the
property provision would change by +/- £0.5m.
10 Contingent liabilities and capital commitments
Bank and other guarantees
As at 1 March 2025, the Group had approved letters of credit of £1.5m
(FY2024: £1.5m) to the insurers of the Group for the motor insurance and
employer liability insurance policies. The letters of credit cover the
employer deductible element of the insurance policy for insurance claims.
Administration of Tuffnells Parcels Express Limited (Tuffnells)
As reported in Note 3, following the administration of Tuffnells in the prior
period, additional provision is being held in light of the probable outcome of
certain insurance claims reverting to the Group which were previously being
handled by Tuffnells.
In addition, following a detailed information request received from the
Pension Regulator (tPR) in October 2024 in respect of an ongoing formal
investigation relating to the Tuffnells defined benefit pension scheme, the
Company has incurred £0.6m of legal advisory costs in considering and
responding to tPR's extensive enquiries which cover both the Company's period
of ownership of Tuffnells as well as the sales process, which concluded with
the sale of Tuffnells in May 2020. Details of the disposal were given in the
FY2020 Annual Report, with the final consideration payment being received in
August 2022. The Company continues to make itself available to provide further
assistance to tPR as required.
The Board has considered the nature and current circumstances of tPR's
investigation, including the detailed information that has been provided by
the Company to tPR to date, and concluded that no provision is required at
this stage given there is no certainty at this time as to how tPR may act on
the information requested or whether a future obligation will arise or on what
terms and, in the Board's view, the Company acted reasonably throughout its
time as parent of Tuffnells and was an overall net contributor of funding to
Tuffnells during its period of ownership.
Indemnity coverage
On winding up of the News Section of the WH Smith Pension Trust defined
benefit pension scheme during FY2022, the Company has agreed run-off indemnity
coverage for any member claims that were uninsured liabilities capped at
£6.5m over the following 60 years. The Group is not aware of any claims
brought during either the current or prior reporting period.
Reversionary leases
Other potential liabilities that could crystallise are in respect of previous
assignments of leases where the liability could revert to the Group if the
lessee defaulted. Pursuant to the terms of the Demerger Agreement from WH
Smith PLC in 2006, any such contingent liability in respect of assignment
prior to demerger, which becomes an actual liability, will be apportioned
between Smiths News plc and WH Smith PLC in the ratio 35:65 (provided that the
actual liability of Smiths News plc in any 12-month period does not exceed
£5m). The Company's share of the rental commitment at 1 March 2025 was £1.0m
(FY2024: £0.4m), which increased during the period following a review of
market rentals.
Capital commitments
Contracts placed for future capital expenditure approved by the directors but
not provided for amount to £0.8m (FY2024: £2.2m).
11 Share capital
a) Share capital
£m 1 Mar 2025 24 Feb 2024
Issued, authorised and fully paid ordinary shares of 5p each
Opening and closing balance 12.4 12.4
b) Movement in share capital
Number (m) Ordinary shares of 5p each
At 1 September 2024 247.7
At 1 March 2025 247.7
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at the general
meetings of the Group. The Group has one class of Ordinary shares, which carry
no right to fixed income.
c) Share premium
£m 1 Mar 2025 24 Feb 2024
Opening and closing balance 60.5 60.5
12 Related Party Transactions
No related party transactions had a material impact on the financial
performance in the period or financial position of the Group at 1 March 2025.
There have been no material changes to or material transactions with related
parties as disclosed in Note 27 of the Annual Report and Accounts for the
53-week period ended 31 August 2024.
13 Subsequent events
The directors have considered the period between the balance sheet date and
the date when the accounts are authorised for issue for evidence of conditions
that existed at the balance sheet date, either adjusting or non-adjusting post
balance sheet events, other than those events disclosed in Note 2.
Glossary - Alternative performance measures
Introduction
In the reporting of financial information, the directors have adopted various
Alternative Performance Measures (APMs).
These measures are not defined by International Financial Reporting Standards
(IFRS) and therefore may not be directly comparable with other companies'
APMs, including those in the Company's industry.
APMs should be considered in addition to, and are not intended to be a
substitute for, or superior to, IFRS measurements.
Purpose
The directors believe that these APMs assist in providing additional useful
measures of the Group's performance. They provide readers with additional
information on the performance of the business across periods which is
consistent with how the business performance is planned by, and reported to,
the Board and the Executive Team.
Consequently, APMs are used by the directors and management for performance
analysis, planning, reporting and incentive-setting purposes.
APM Closest equivalent IFRS measure Adjustments to reconcile to IFRS measure Note/page reference for reconciliation Definition and purpose
Income Statement
Adjusting Items No direct equivalent N/A Note 3 Adjusting items of income or expenses are excluded in arriving at adjusted
operating profit to present a further measure of the Group's performance. Each
Adjusting items is considered to be significant in nature and/or quantum,
non-recurring in nature and/or unrelated to the Group's ordinary activities or
consistent with items treated as adjusting in prior periods. Excluding these
items from profit metrics provides readers with helpful additional information
on the performance of the business across periods because it is consistent
with how the business performance is planned by, and reported to, the Board
and the Executive Team.
Adjusted operating profit Operating profit* Adjusted items Income statement/ Note 3 Adjusted operating profit is defined as operating profit excluding the impact
of adjusting items (defined above). This is the headline measure of the
Group's performance and is a key management incentive metric.
Adjusted profit before tax Profit before tax (PBT) Adjusted items Income statement/ Adjusted profit before tax is defined as profit before tax excluding the
impact of adjusting items (defined above).
Note 3
Adjusted profit after tax Profit after tax (PAT) Adjusted items Income statement/ Adjusted profit after tax is defined as profit after tax, excluding the impact
of adjusting items (defined above).
Note 3
Adjusted Operating profit* Depreciation and amortisation Glossary This measure is based on business unit operating profit from continuing
operations. It excludes depreciation, amortisation and adjusting items.
EBITDA Adjusting items
Bank EBITDA Operating profit* Depreciation and amortisation Glossary This measure is based on business unit operating profit from continuing
operations. It excludes depreciation, amortisation, adjusting items and adds
Adjusting items back operating lease charges under accounting standards applicable in 2019 and
share-based payments expense. This measure is used to calculate compliance
Operating lease charges with banking covenants.
Adjusted earnings per share Earnings per share Adjusting items Note 6 Adjusted earnings per share is defined as Adjusted PBT, less taxation
attributable to Adjusted PBT and including any adjustment for minority
interest to result in adjusted PAT attributable to shareholders; divided by
the basic weighted average number of shares in issue.
Cash flow Statement
Free cash flow Net movement in cash and cash equivalents Dividends, acquisitions and disposals, repayment of bank loans, EBT share Glossary Free cash flow is defined as the movement in cash and cash equivalent plus the
purchases following: payment of dividends, the impact of acquisitions and disposals, the
repayment of bank loan principal amounts, and outflows for purchases of own
shares (EBT share purchases). This measure reflects the cash available to the
Group, which can be used for investments, dividends and the reduction of debt.
Free cash flow (excluding adjusting items) Net movement in cash and cash equivalents Dividends, acquisitions and disposals, repayment of bank loans, EBT share Financial review Free cash flow (excluding adjusting items) is free cash flow adding back
purchases, pension deficit repair payments adjusting items adjusting cash costs.
Balance Sheet
Bank Net Debt Borrowings less cash Cash flow statement Bank net debt is calculated as total debt less cash and cash equivalents.
Total debt includes loans and borrowings (excluding unamortised arrangement
fees), overdrafts and obligations under finance leases under accounting
standards applicable in 2019.
Net debt Borrowings less cash Cash flow statement Net debt is calculated as total debt less cash and cash equivalents. Total
debt includes loans and borrowings, overdrafts and obligations under leases.
*Operating profit is presented on the Company's income statement. It is not
defined per IFRS, however, it is a generally accepted profit measure.
Reconciliation of free cash flow to net movement in cash and cash equivalents
26 weeks to 26 weeks to 24 Feb 2024
1 Mar 2025
Net decrease in cash and cash equivalents (0.7) (20.8)
(Increase)/decrease in borrowings and overdrafts (0.7) 15.0
Movement in borrowings and cash (1.4) (5.8)
Dividend paid 13.2 6.7
Outflow for purchase of own shares 1.5 3.3
Total free cash flow 13.3 4.2
Reconciliation of bank net debt to reporting net debt
At At
1 Mar 2025 31 Aug 2024
Bank net debt (12.4) (11.0)
Unamortised arrangement fees (note 8) 0.3 0.4
Lease liabilities (30.7) (30.9)
Net debt (note 8) (42.8) (41.5)
Reconciliation of free cash flow to Bank EBITDA
26 weeks to 26 weeks to 24 Feb 2024
1 Mar 2025
Operating profit 20.0 18.6
Adjusting items (0.6) 0.2
Adjusted operating profit 19.4 18.8
Depreciation 1.2 1.0
Amortisation 0.2 0.2
Right of use asset depreciation 3.2 2.8
Adjusted EBITDA 24.0 22.8
Operating lease charges (4.2) (3.8)
Share-based payments expense 0.5 0.2
Bank EBITDA 20.3 19.2
INDEPENDENT REVIEW REPORT TO SMITHS NEWS PLC
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the 26 week period ended 1 March 2025 is not prepared, in
all material respects, in accordance with UK adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the 26 week period ended 1
March 2025 which comprises the Condensed Consolidated Income Statement, the
Condensed Consolidated Statement of Comprehensive Income, the Condensed
Consolidated Balance Sheet, the Condensed Consolidated Statement of Changes in
Equity, the Condensed Consolidated Cash Flow Statement and the related notes
to the Consolidated Unaudited Interim Financial Statements.
Basis for conclusion
We conducted our review in accordance with Revised International Standard on
Review Engagements (UK) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410
(Revised)"). A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in Note 1, the annual financial statements of the Group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410 (Revised), however future events or conditions may cause the
Group to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority and for
no other purpose. No person is entitled to rely on this report unless such a
person is a person entitled to rely upon this report by virtue of and for the
purpose of our terms of engagement or has been expressly authorised to do so
by our prior written consent. Save as above, we do not accept responsibility
for this report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
BDO LLP
Chartered Accountants
London, UK
06/05/25
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
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