Smiths News has secured contracts it says will add \u00a3375m a year in revenue and underpin the business until 2037, but the cost of building a national network means the group faces a dip in profitability next year.<\/p>\n
The newspaper and magazine wholesaler has signed exclusive deals with News UK, Associated Newspapers (ANL) and Telegraph Media Group, plus magazine distributors Frontline and Seymour. They take effect in stages, from July 2027 with News UK, then the Telegraph in October 2027 and ANL in January 2028, before the magazine contracts begin in April 2030.<\/p>\n
Between them they cover around 61% of the national newspaper and magazine market. They also extend relationships that were due to expire in 2029 and 2030, and the \u00a3375m secured is out of about \u00a3600m of potential new revenue.<\/p>\n
Delivering them means taking a network that serves England and Wales to all of Great Britain, with about 700 new routes and 23 new depots. Smiths News puts the implementation cost at between \u00a321m and \u00a327m, while it expects a further \u00a37m to \u00a39m of early-life transition costs in the 2027 financial year, equivalent to roughly a fifth of this year\u2019s adjusted operating profit.<\/p>\n
The expansion is forecast to add between nothing and \u00a32m of net profit in the 2028 financial year, rising to between \u00a312m and \u00a318m a year from 2029.<\/p>\n
Chief executive Jonathan Bunting said: \u201cWhile this investment will have a short-term impact on profitability as we absorb the costs of expansion, we expect the enlarged network to deliver incremental net profit from FY2028, with material benefits from FY2029 and beyond.\u201d<\/p>\n
He added: \u201cThis is a transformational moment for our business. We have secured a number of significant, long-term national contracts with leading publishers, providing a sustainable revenue platform through to 2037 and underpinning our ambitions for continued investment and growth.\u201d<\/p>\n
The announcement came alongside results for the year to 29 August 2026, in which revenue slipped 3% to \u00a31.04bn. Pre-tax profit edged up 1% to \u00a336.2m on lower borrowing costs, with a \u00a33.5m boost from the FIFA Men\u2019s World Cup outweighed by higher National Insurance and technology spending. After \u00a34.1m of reorganisation and transformation costs, statutory pre-tax profit fell 15% to \u00a332.1m.<\/p>\n
A final dividend of 3.90p a share takes the ordinary payout to 5.65p, but with no repeat of last year\u2019s 3.0p special, the total dividend falls by about a third. The board has pledged to keep next year\u2019s ordinary dividend at or above analysts\u2019 consensus of 5.2p.<\/p>\n
\n","protected":false},"excerpt":{"rendered":"
Investment of up to \u00a327m required to expand network with 23 new depots planned<\/p>\n","protected":false},"author":18,"featured_media":37605,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[120781],"coauthors":[81],"class_list":["post-48698","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured-story"],"yoast_head":"\n