Trading Update

RNS Number : 2123D

Connect Group PLC

05 July 2016

 

Connect Group PLC

("Connect Group" or "the Group")

TRADING UPDATE

Connect Group PLC, a leading specialist distributor operating in four divisions; News & Media, Books, Education & Care and Parcel Freight, is today issuing its Trading Update covering the 44 week period to 2 July 2016.

Total Group revenues increased 2.1% compared to the same period last year, including a full period for Tuffnells this year versus 34 weeks last year. On a like for like basis total Group revenues decreased 0.9%.

The performance of each division was as follows:

·     Connect News & Media: total News revenues decreased by 2.3% and like for like revenues decreased by 3.8%, with both newspaper and magazine performance continuing broadly in line with recent run rates. Total Media revenues increased by 5.5% supported by new contract wins while like for like revenues increased by 3.5%.

·     Connect Books: total revenues increased by 1.1% while like for like revenues, excluding completed contracts, increased by 4.8%. Continuing tough conditions in UK Libraries were partially offset by the continuing growth of Wordery and a good performance in Wholesale.

·     Connect Education & Care: total and like for like revenues decreased by 3.3%. Core revenues also decreased by 2.4% with a good performance in Early Years being more than offset by tough conditions in Secondary Education.

·     Connect Parcel Freight: on a comparable 44 week basis, total revenues increased by 10.2% driven by a continuation of strong market growth and new customer wins supported by the continued focus on service.

Whilst it is too early to make a medium term forecast of the implications from the recent UK vote to leave the European Union, the Group as a whole is predominantly UK centric and operates in large and resilient markets, with strong levels of free cash flow. Despite market volatility and uncertainty, forecasts remain in line with market expectations.

There has been no change in the underlying financial condition of the Group since the interim results announcement on 19 April 2016.

The Group will announce its preliminary results for the twelve months ending 31 August 2016 on 18 October 2016.

Note: The following definitions apply consistently throughout Connect Group PLC results

(1) Like for like revenues exclude the impact of gains and losses, including contracts, new business and acquisitions reported in the current or prior year total sales.

Enquiries:

Connect Group PLC
Mark Cashmore, Group Chief Executive	Tel: [phone]
Nick Gresham, Chief Financial Officer
Buchanan
Sophie McNulty Richard Oldworth Victoria Watkins	Tel: [phone]

About Connect Group PLC:

Connect Group PLC is a leading specialist distributor operating in large and diverse markets. The Group has four separate divisions, connecting suppliers to customers in an efficient, knowledgeable and service oriented way:

• Connect News & Media - Encompassing: Smiths News, Dawson Media Direct and Pass My Parcel. Smiths News is the UK's largest newspaper and magazine wholesaling business with an approximate 55 per cent. market share. It distributes newspapers and magazines on behalf of the majority of the major national publishers as well as a large number of regional publishers serving approximately 30,000 customers across England and Wales on a daily basis, including large general retailers as well as smaller independent newsagents with approximately 40 million newspapers supplied weekly; Dawson Media Direct is an international media direct business supplying newspapers, magazines and inflight entertainment technology & content to over 80 airlines in 50 countries. Pass My Parcel, a wholly-owned 'click and collect' delivery service, operated by the News Business, has a network of over 3,000 parcelshops and clients which include Amazon and ASOS.

• Connect Books - Combining a number of recognised brands in print and digital bookselling, including Bertrams, Dawson Books and Wordery. A leading distributor of printed and digital books, the division supplies a mix of traditional and online booksellers, academic and public libraries and direct to consumer through Wordery.

• Connect Education & Care - A leading independent supplier of consumable products to the Education and Care markets through The Consortium and West Mercia Supplies. The division currently holds an approximate 5 per cent. market share of the estimated addressable market, and serves over 30,000 customers with an extensive range of over 40,000 products across a branded, own-brand and value range, including stationery, arts and craft and cleaning.

• Connect Parcel Freight - Tuffnells is a leading provider of next-day B2B delivery of mixed parcel freight consignments, specialising in items of irregular dimension and weight ("IDW"), examples of which include bulky furnishings, building materials and automotive parts. Tuffnells offers distribution coverage throughout the UK through a network of 37 depots and operates a largely depot-to-depot operational model, delivering over 13 million consignments per annum, through a wide range of services to over 4,500 customers focusing on SMEs.

 

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