Smiths News (LON:SNWS) Issues Earnings Results

Smiths News (LON:SNWS) posted its quarterly earnings data on Wednesday. The company reported GBX 5.20 EPS for the quarter, Digital Look Earnings reports. Smiths News had a return on equity of 744.74% and a net margin of 2.66%.The firm had revenue of £515.70 million for the quarter.

Here are the key takeaways from Smiths News’ conference call:

• In-line results: Adjusted operating profit was £18.3m and adjusted profit after tax £12.7m, revenues were down 3.9% but management expects full?year results to be in line with market expectations and approved an interim dividend of £0.0175 per share.
• Strong cash generation: Free cash flow was £21.2m (up £7.9m year?on?year) and average net cash was £16.2m for the half, supporting the £16.7m of ordinary and special dividends paid and ongoing capital allocation review.
• Revenue mix remains concentrated in newspapers & magazines (>90% of sales) which fell ~4.1%, while Collectables grew 13.3% and growth verticals rose 35% (recycle +50%), showing diversification but continuing dependence on print.
• Collectables momentum looks set to continue—ongoing Pokémon demand, new retail placements and trials in Japanese anime cards, plus an expected H2 boost from the men’s FIFA World Cup support a second?half profit weighting.
• Pensions regulatory risk: the board is responding to a Pensions Regulator warning notice over the Tuffnells defined benefit scheme, has incurred professional fees and faces potential regulatory exposure.

Smiths News Trading Up 2.1%

LON SNWS opened at GBX 68 on Thursday. The company has a market cap of £164.58 million, a price-to-earnings ratio of 6.02, a price-to-earnings-growth ratio of 0.29 and a beta of 0.33. Smiths News has a twelve month low of GBX 53.20 and a twelve month high of GBX 79.40. The business’s fifty day moving average is GBX 66.26 and its 200 day moving average is GBX 67.91. The company has a quick ratio of 0.83, a current ratio of 0.94 and a debt-to-equity ratio of 338.95.

Analyst Ratings Changes

A number of research firms have commented on SNWS. Canaccord Genuity Group restated a “buy” rating and set a GBX 95 price objective on shares of Smiths News in a research note on Wednesday. Berenberg Bank reiterated a “buy” rating and issued a GBX 85 price target on shares of Smiths News in a research note on Wednesday. Two research analysts have rated the stock with a Buy rating, Based on data from MarketBeat.com, Smiths News has a consensus rating of “Buy” and a consensus price target of GBX 90.

About Smiths News

In 1792 we started delivering the nation’s newspapers. Today, we’re proud to be the UK’s largest wholesaler of newspapers and magazines, serving 24,000 retailers from superstores to corner shops.

Service and efficiency put us at the forefront of our industry and with 55% market share we are the leading player in one of the world’s fastest-moving supply chains. Our teams go further, when others stop, striving to meet the highest standards in all we do.