Interim Results as at 28 February 2026
Summary by AI BETAClose X
6 May 2026
Smiths News PLC
("Smiths News" or the "Company")
Interim Results for the 26 weeks ended 28 February 2026
- Solid trading performance with full year results expected to be in line with market expectations*
- Men's Football World Cup and growth verticals underpin forward momentum
- Interim dividend of 1.75 pence per share due to be paid on 3 July 2026
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 interim results for the 26 weeks ended 28 February 2026 (the "Period" or "HY2026").
Financial highlights:
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· |
The business delivered a solid performance in the Period with results expected to be in line with market expectations for the full year* |
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|
|
o |
Revenues of £515.7m (-3.9% versus HY2025), in line with broader print market dynamics and historic norms |
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|
o |
Adjusted operating profit of £18.3m (HY2025: £19.4m) and adjusted profit after tax of £12.7m (HY2025: £13.1m), reflecting the annualisation of National Insurance Contributions and ongoing investments in the cost base, including technology |
|
· |
Investment in growth verticals continues, delivering 35% revenue growth in the Period, principally driven by the Recycling division, with revenues up over 50% |
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|
· |
On track to deliver in excess of £4m of operational efficiencies in FY2026 |
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|
· |
Strong free cash flow of £21.2m, generated in line with expectations and includes a working capital benefit in the Period of £7.6m |
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|
· |
Interim dividend of 1.75 pence per share (HY2025: 1.75 pence) due to be paid on 3 July 2026 |
|
|
£m |
26 weeks to |
26 weeks to |
Change |
|
|
28 February 2026 |
1 March 2025 |
|
|
Adjusted results (1) |
|
|
|
|
Revenue |
515.7 |
536.4 |
(3.9%) |
|
Operating profit |
18.3 |
19.4 |
(5.7%) |
|
Profit after tax |
12.7 |
13.1 |
(3.1%) |
|
Earnings per share |
5.2p |
5.4p |
(3.7%) |
|
Statutory results |
|
|
|
|
Revenue |
515.7 |
536.4 |
(3.9%) |
|
Operating profit |
17.7 |
20.0 |
(11.5%) |
|
Profit after tax |
12.2 |
13.5 |
(9.6%) |
|
Earnings per share |
5.0p |
5.6p |
(10.7%) |
|
Interim dividend per share |
1.75p |
1.75p |
- |
|
|
|
|
|
|
Cash flow and net cash/debt |
|
|
|
|
Free cash flow (2) |
21.2 |
13.3 |
59.4% |
|
Bank Net Cash/(Debt) (3) |
7.8 |
(12.4) |
162.9% |
|
Average Bank Net Cash/(Debt) |
16.2 |
(1.1) |
1,572.7% |
Business Highlights:
|
· |
Newspapers and magazines revenues performed in line with historic norms, with good contribution from collectables and growth vertical revenue streams |
|
· |
96% of newspapers and magazines revenues secured to 2029 (HY2025: 91%), following the successful renewal of a long-term contract with the Guardian Newspaper Group |
|
· |
Sustained demand across collectables market, supported by continued interest in UK football and Pokémon collections |
|
· |
Ongoing progress advancing growth verticals, including working with brokers to generate higher recycling volumes and onboarding an international optical and hearing care provider for overnight delivery services |
|
· |
Internal investment programme progressing as planned, enhancing customer service and operational efficiency across all verticals, with fleet-wide transport management system implementation scheduled to commence in H2 2026 |
Outlook:
|
· |
The Company has delivered a solid first half of trading in the current financial year and expects to deliver full year results in line with current market expectations* |
|
· |
Newspapers and magazines remain resilient, with strong collectables performance, improving contribution from growth verticals, and further efficiency gains expected in H2 2026 |
|
· |
Positive H2 outlook, supported by growth verticals and demand-drivers, including the Pokémon 30th anniversary collection and the FIFA Men's Football World Cup |
Jonathan Bunting, Chief Executive Officer of Smiths News, commented:
"We are pleased to report a solid start to the financial year, with positive momentum across the business.
Our newspaper and magazine operations continue to perform in line with expectations, while opportunities in our growth verticals are gaining traction. During the Period, we secured our largest book delivery contract to date and made further progress in expanding our recycling activities.
Importantly, we have now secured 96% of our existing publisher contract revenues through to 2029. This includes the recent renewal of a long-term contract with the Guardian Newspaper Group, further strengthening our revenue visibility and supporting our commitment to delivering high-level service to our newspapers and magazines customers and sustained value for all stakeholders."
* Prior to this announcement, the Company determines that consensus market expectation for FY2026 is adjusted operating profit of £37.2m.
Retail Investor Presentation
Smiths News' management team will provide a webcast presentation of the Company's half year results at 12.00 p.m. today, Wednesday 6 May 2026. The presentation is open to all existing and potential shareholders.
The presentation will be hosted on the Investor Meet Company platform, where questions can be submitted at any time during the presentation. Investors can register for free and subscribe to alerts on Smiths News by visiting: Smiths News IMC meeting
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For further information, please contact: |
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Smiths News PLC Jonathan Bunting, Chief Executive Officer Richard Clay, Chief Financial Officer
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via Vigo Consulting |
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Vigo Consulting Jeremy Garcia / Fiona Hetherington / Anna Sutton |
Tel: +44 (0) 20 7390 0230 |
About Smiths News
Smiths News is the UK's largest news wholesaler and leading provider of early morning, end-to-end supply chain solutions. Smiths News has been delivering newspapers to retailers across the UK for over 200 years on behalf of the major national and regional publishers. Today, Smiths News delivers to over 22,000 customers across England and Wales on a daily basis.
Smiths News's service capability now extends into a number of new verticals that build on its expertise in warehousing, reverse logistics and early morning final mile services, across its extensive high-density UK delivery network, including a waste recycling collection service, the delivery of additional categories such as books and home entertainment, and extending our services in the final mile.
The speed of turnaround and the density of Smiths News' coverage is critical to one of the world's fastest physical supply chains and we remain focused on continuing to deliver best in class service to the newspapers and magazines market, whilst exploring opportunities for growth based on this strong foundation.
For more information, please visit: www.smithsnews.co.uk
Person responsible for arranging release of this announcement:
Stuart Marriner, General Counsel & Company Secretary
Smiths News plc, Rowan House, Cherry Orchard North, Kembrey Park, Swindon SN2 8UH
Email: cosec@smithsnews.co.uk
Notes
The Company uses certain performance measures for internal reporting purposes and employee incentive arrangements. The terms 'Bank Net Cash/(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.
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(1) |
The following are key APMs identified by the Company in the consolidated interim financial statements as Adjusted results: |
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a. Adjusted operating profit - is defined as operating profit excluding Adjusting items. |
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b. Adjusted profit before tax (PBT) - is defined as profit before tax before the impact of Adjusting items. |
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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. |
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d. Adjusting items - Adjusting items of income or expense are excluded in presenting 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 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 consolidated interim income statement. |
|
(2) |
Free cash flow - is defined as the movement in cash and cash equivalents excluding the following: the payment of dividends, the impact of acquisitions and disposals, the repayment of bank loan principal amounts and RCF repayments, 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/or the reduction of debt. |
|
(3) |
Bank Net Cash/(Debt) - represents the net position drawn under the Company's banking facilities and is calculated as total debt less cash and cash equivalents (excluding cash held by the Employee Benefit Trust (EBT)). Total cash/(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 28 February 2026 and the Report and Accounts for the year ended 30 August 2025 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
Smiths News delivered a solid performance across HY2026 with trading in line to meet market expectations for the full year. The newspapers and magazines business generated solid revenues, alongside pleasing progress from our growth verticals with a marked improvement in revenue in the Period. The Company remains confident about trading across the remainder of the current financial year, supported by growth verticals and demand drivers including the Pokémon 30th anniversary collection and the FIFA Men's Football World Cup.
Solid delivery from newspapers and magazines business
Newspapers and magazines delivered a resilient performance, providing the business with high quality, predictable revenues and the infrastructure and network from which to further expand reach. The newspapers and magazines activity remains the mainstay of Smiths News and the Company remains committed to delivering service excellence and sustaining partner relationships, which are central to maintaining longer-term demand.
Following the Period end, the Company announced it had successfully renewed a long-term contract with the Guardian Newspaper Group, covering all of Smiths News' current distribution territories in the UK. As a result, Smiths News has now secured long-term contracts with 96% of its current newspapers and magazine revenues through to 2029.
The Company continued to see a strong performance in the collectables market in the Period, particularly the Pokémon range, having successfully secured distribution of the range to additional stores of four major UK national supermarket chains.
Additionally, the Company has initiated a small-scale trial around the distribution of other Japanese anime cards, assessing the viability and market appetite to extending our collectables offering.
The ongoing strength of the collectables market is expected to continue into the second half of the year, supported by the upcoming FIFA Men's Football World Cup, which typically drives a seasonal spike in collectables sales, and the 30th anniversary of Pokémon, which occurred on 27 February 2026.
Continued progress with growth verticals
The Company is focused on broadening its early-morning supply chain management expertise and leveraging its existing infrastructure to overlay products and additional services across Smiths News' established UK footprint.
Ongoing progress has been made within the Group's Recycling, New Categories and Final Mile activities, delivering an increase in revenues of 35% versus HY2025. Smiths News continues to invest in, develop and support the growth verticals, generating positive momentum as we move into the second half of the year.
Within Recycling, we have continued to see strong demand from our customers, with an increase in revenue of more than 50% compared with HY2025.
We previously announced the appointment of Adam Wylie as Managing Director of Recycling. Adam joined Smiths News in August 2025 and is now driving the strategic direction of the Recycling vertical. Having reviewed the results of the small-scale trial undertaken last year, it was concluded that the most effective route to market to secure new customers is through partnering with waste brokers. As a result, strengthening relationships with key waste brokers remains a strategic focus for the team to drive uptake of our services, with Smiths News now undertaking activities with six different national brokers.
Alongside the new waste brokers, the Company has also embarked on a number of new initiatives to optimise the network and drive penetration. Initially focused on a small subset of customers, the Company is exploring the provision of vape recycling services, WEEE recycling services and is also trialling coffee cup collections with a leading national high street coffee shop. Smiths News also successfully introduced a marginal price increase with customers in January 2026.
Additionally, Smiths News is working to understand the opportunity for further growth from the expected introduction of further regulation, including the Deposit Return Scheme ("DRS"), which the UK Government is currently aiming to introduce across England, Scotland and Northern Ireland in October 2027.[1]
The Company continues to make ongoing progress with its book distribution services, with our teams now delivering approximately 30,000 books per week to existing customers. Smiths News already provides this service to a number of leading supermarket chains, and is well-placed to further expand its customer base in this area going forward. Given the volume of books now being processed by the Company, we are evaluating the introduction of solutions that would drive efficiencies by automating certain stages of the process in this vertical.
Additionally, the Company has secured a multi-year contract with an international provider of optical and hearing care services, to provide through-the-night delivery, six days a week, to their national network of over 580 stores. It is anticipated that Smiths News will be making over 1,600 drops per week to these stores by the end of the financial year.
Internal investment programme
The Company's internal investment programme continues to plan. The investment programme seeks to optimise warehouse operations and enhance existing capabilities, future proofing the business and ensuring continued service delivery to existing customers. Furthermore, the investment in technology and systems will provide the foundations to enable delivery of additional contracts across growth verticals.
We have continued to invest in our transport management system in HY2026, with rollout and implementation expected to start in the second half of the year. The new system will enhance client and retailer delivery communications and see the introduction of variable routing capability.
Operational efficiencies
Smiths News continues to drive operational efficiencies through its focus on streamlining operations and reducing variable costs aligned with volume decline. It remains on track to deliver cost savings in excess of £4.0m in FY2026.
Cash position
The Company continues to maintain strong levels of cash generation, supported by the resilient performance of our newspaper and magazine business.
In HY2026, the business reported £21.2m of free cash flow (HY2025: £13.3m) which included a £7.6m working capital timing benefit (HY2025 £2.5m outflow).
People
In February 2026, we welcomed Richard Clay as Chief Financial Officer, following the departure of Paul Baker in November 2025. We would like to thank George Cooper, who assumed the role of interim Chief Financial Officer, and has now reassumed his position as Group Financial Controller. Richard brings extensive experience in finance roles, and we are pleased to welcome him to Smiths News.
We would also like to thank our colleagues across Smiths News for their ongoing commitment to service excellence in a complex and time-critical market. The Company remains focused on investing in the continued professional development of its people and maintaining a positive, inclusive culture that supports employee wellbeing, engagement, and long-term performance.
Pensions Regulator
On 20 February 2026, Smiths News received a Warning Notice from the UK Pensions Regulator ("tPR") in relation to its ongoing investigation into the former Tuffnells Parcels Express Pension Scheme ("Tuffnells Scheme"), explaining that tPR is considering issuing a Financial Support Direction ("FSD") against Smiths News in relation to the Tuffnells Scheme. It is too early to know if an FSD will be issued, or the amount or form of any such support.
The Board maintains the view that Smiths News acted reasonably throughout its time as parent of Tuffnells and that it was an overall net contributor of funding to Tuffnells during its period of ownership. The group continues to disclose a contingent liability in respect of the investigation, which can be found in Note 9 to the interim financial statements.
Dividend
Reflecting the Board's ongoing confidence in Smiths News, an interim dividend of 1.75p per share will be paid on 3 July 2026 (HY2025: 1.75p per share) to shareholders on the register on 5 June 2026. The ex-dividend date will be 4 June 2026.
In line with our capital allocation policy, 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
The Company has delivered a solid first half of FY2026 and expects to deliver full year results in line with market expectations.
Our newspapers and magazines activities remain solid, with collectables performing strongly, alongside increased contribution from growth verticals, and a positive impact from operational efficiencies to be delivered in the second half.
Looking ahead to the second half, we have positive trading momentum across the business, including an increasing contribution from our growth verticals. In addition, the Pokémon 30th anniversary and the upcoming FIFA Men's Football World Cup positions us to benefit from heightened demand for collectables.
FINANCIAL REVIEW
Overview
The Company has traded well in the first half of the year and is trading in line with full year expectations. Adjusted operating profit of £18.3m (HY2025: £19.4m) was behind last year, due to the increases to National Insurance Contributions and ongoing investments in the cost base. The Company has continued to generate good levels of cash flow with Average Bank Net Cash of £16.2m in the period compared to Average Bank Net Debt of £1.1m in HY2025, noting that dividends of £16.7m were paid at the end of the period in February 2026.
Revenue of £515.7m (HY2025: £536.4m) was down 3.9% on the prior period, within the historic range of -3% to -5%, with lower volumes of newspapers and magazines once again offset by the benefits of cover price increases and increased sales of collectables.
Adjusted operating profit was £1.1m lower than the prior period (HY2026: £18.3m; HY2025: £19.4m) due to the annualisation of National Insurance Contributions since last April and ongoing investments in the cost base. The performance of collectables, including Pokémon, and the benefit of cost reduction plans continue to offset the impact of inflation and lower income from newspapers and magazines. Adjusted operating profit is second-half weighted in FY2026, supported by the FIFA Men's Football World Cup trading card and sticker collections in H2.
Adjusted profit before tax was £0.7m lower (HY2026: £17.0m; HY2025: £17.7m), as the decrease in operating profit was partially offset by lower net finance costs (HY2026: £1.3m; HY2025: £1.7m) which were the result of lower borrowings and an average cash position.
Adjusted profit after tax decreased from £13.1m to £12.7m and adjusted EPS has decreased by 4% from 5.4p to 5.2p.
Statutory profit after tax was £12.2m (HY2025: £13.5m) and included a net cost from adjusting items of £0.5m (HY2025: £0.4m credit). Adjusting items in the period consisted mainly of technology investment costs of £0.3m, strategic project costs of £0.2m and professional fees of £0.1m in relation to the Pension Regulator's review of the Tuffnells defined benefit pension scheme. The prior period included the benefit of dividends from the McColls administrator. Statutory EPS decreased by 11% from 5.6p to 5.0p due to these factors.
Free cash flow was £21.2m (HY2025: £13.3m), including a working capital timing benefit which was £10.1m higher than last year, offset by a £0.6m outflow from adjusting items compared to a £2.1m inflow in HY2025. The flows in the prior period included £1.6m from the first dividend from the McColls administrator and a £1.5m tax refund in respect of the buyout and winding up of the News Section of the WH Smith defined benefit pension scheme.
Average Bank Net Cash for the period improved from £1.1m (debt) in HY2025 to £16.2m (cash). Dividends totalling £16.7m were paid in February near the end of the period. Bank Net Debt improved by £20.2m from £12.4m (debt) at HY2025 to £7.8m (cash).
An interim dividend of 1.75p (HY2025: 1.75p) per share (£4.3m) is proposed to be paid in July 2026.
Adjusted results
Group
|
£m |
26 weeks to 28 Feb 2026 |
26 weeks to 1 Mar 2025 |
Change
|
|
Revenue |
515.7 |
536.4 |
(3.9%) |
|
Operating profit |
18.3 |
19.4 |
(5.7%) |
|
Net finance costs |
(1.3) |
(1.7) |
23.5% |
|
Profit before tax |
17.0 |
17.7 |
(4.0%) |
|
Taxation |
(4.3) |
(4.6) |
6.5% |
|
Effective tax rate |
25.3% |
26.0% |
0.7% |
|
Profit after tax |
12.7 |
13.1 |
(3.1%) |
Revenue
Revenue was £515.7m (HY2025: £536.4m), down 3.9% on the prior period, with lower newspaper and magazine volumes offset by cover price increases and increased sales of trading card and sticker collectables.
Newspaper revenues declined by 4.5% (HY2025: 0.4% decrease). Magazine revenue was 3.6% lower (HY2025: 4.6% lower). Both remain in line with our long-term planning assumption and continue to drive the overall 3.9% variance as they make up over 90% of total revenue. Revenue from collectables increased by 13.3% (HY2025: 4.3% increase), underpinned by the ongoing popularity of Pokémon.
Revenue from growth activities increased by 35.1% (HY2025: 25.3%) largely as a result of additional revenues from our recycle propositions.
Operating profit
Adjusted operating profit decreased by £1.1m to £18.3m (HY2025: £19.4m), driven by the following items:
· Improved contribution from sales of collectables which offset the impact of reduced contribution from newspapers and magazines.
· Cost reduction plans within depot and overheads (+£1.9m) which partially offset inflationary increases (total -£2.5m), which included the £0.6m impact of increases to National Insurance Contributions.
· Additional technology and other investments in the cost base of £0.5m.
Profit after tax
Net finance costs of £1.3m (HY2025: £1.7m) were lower than the prior period, benefitting from a period of Average Bank Net Cash. Taxation of £4.3m was £0.3m lower than the prior period due to lower levels of profit. As a result, profit after tax of £12.7m (HY2025: £13.1m) was £0.4m lower than last year.
Statutory Results
Group
|
£m |
26 weeks to 28 Feb 2026 |
26 weeks to 1 Mar 2025 |
Change
|
|
Revenue |
515.7 |
536.4 |
(3.9%) |
|
Operating profit |
17.7 |
20.0 |
(11.5%) |
|
Net finance costs |
(1.3) |
(1.7) |
23.5% |
|
Profit before tax |
16.4 |
18.3 |
(10.4%) |
|
Taxation |
(4.2) |
(4.8) |
12.5% |
|
Effective tax rate |
25.6% |
26.2% |
0.6% |
|
Profit after tax |
12.2 |
13.5 |
(9.6%) |
Statutory profit after tax of £12.2m was a £1.3m decrease on the prior period (HY2025: £13.5m). The decrease was driven by the £0.4m decrease in Adjusted profit after tax described above, and a £0.9m difference in adjusting items after tax of (HY2026: cost of £0.5m, HY2025: credit of £0.4m) driven by a credit in the prior year relating to receipts from the McColls administrator not repeated.
Earnings per share
|
|
Adjusted |
Statutory |
||
|
|
26 weeks to 28 Feb 2026 |
26 weeks to |
26 weeks to 28 Feb 2026 |
26 weeks to |
|
Earnings attributable to ordinary shareholders (£m) |
12.7 |
13.1 |
12.2 |
13.5 |
|
Basic weighted average number of shares (millions) |
244.1 |
242.5 |
244.1 |
242.5 |
|
Basic Earnings per share |
5.2p |
5.4p |
5.0p |
5.6p |
|
Diluted weighted number of shares (millions) |
252.1 |
252.0 |
252.1 |
252.0 |
|
Diluted Earnings per share |
5.0p |
5.2p |
4.8p |
5.4p |
Adjusted basic earnings per share decreased by 0.2p to 5.2p (HY2025: 5.4p), driven by a decrease in profit after tax and by a decrease in the weighted average number of shares held by the employee benefit trust.
Statutory basic earnings per share decreased by 0.6p to 5.0p (HY2025: 5.6p) as it includes the impact of adjusting items which was a cost of £0.5m (HY2025: net credit of £0.4m).
Dividend
|
|
26 weeks to 28 Feb 2026 |
26 weeks to 1 Mar 2025 |
|
Dividend per share (proposed) |
1.75p |
1.75p |
|
Dividend per share (paid and recognised) |
6.80p |
5.40p |
The Board is proposing an interim dividend of 1.75p per share (HY2025: 1.75p per share). The proposed dividend will be paid on 3 July 2026 to shareholders on the register at close of business on 5 June 2026. The ex-dividend date will be 4 June 2026.
The FY2025 final ordinary dividend of 3.8p per share (£9.3m) and special dividend of 3.0p (£7.4m) were approved by shareholders at the Annual General Meeting on 29 January 2026, paid on 5 February 2026 and recognised in these Interim Financial Statements.
Adjusting items
|
£m |
26 weeks to 28 Feb 2026 |
26 weeks to 1 Mar 2025 |
|
Technology transformation costs |
(0.3) |
(0.4) |
|
Transformation programme planning costs |
(0.2) |
- |
|
Tuffnells costs |
(0.1) |
(0.6) |
|
Network and reorganisation costs |
- |
(0.1) |
|
Impairment of receivables - McColl's |
- |
1.7 |
|
Total before taxation |
(0.6) |
0.6 |
|
Taxation |
0.1 |
(0.2) |
|
Total after taxation |
(0.5) |
0.4 |
Adjusting items after tax were costs of £0.5m (HY2025: net credit of £0.4m).
In the period, the Company incurred £0.3m of technology transformation costs, £0.2m of consultancy fees in respect of a strategic recycling project, and £0.1m of professional fees in responding to the Pensions Regulator (tPR) in respect of its formal investigation into the Tuffnells defined benefit pension scheme.
In the prior period, Tuffnells costs of £0.6m related to the responding to tPR's investigation, 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 and third (final) dividends were received in cash during the second half of FY2025.
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 28 Feb 2026 |
26 weeks to 1 Mar 2025 |
|
Adjusted operating profit |
18.3 |
19.4 |
|
Depreciation and amortisation |
4.7 |
4.6 |
|
Adjusted EBITDA |
23.0 |
24.0 |
|
Working capital movements |
7.6 |
(2.5) |
|
Capital expenditure |
(0.9) |
(2.3) |
|
Lease payments |
(3.0) |
(3.3) |
|
Net interest and fees |
(1.2) |
(1.6) |
|
Taxation |
(4.2) |
(3.6) |
|
Other |
0.5 |
0.5 |
|
Free cash flow (excluding Adjusting items) |
21.8 |
11.2 |
|
Adjusting items (cash effect) |
(0.6) |
2.1 |
|
Free cash flow |
21.2 |
13.3 |
Free cash flow of £21.2m (HY2025: £13.3m) was £7.9m higher, driven by a £10.1m improvement in working capital flows and £1.4m lower capital expenditure, and offset by £1.1m lower adjusted operating profit and £2.7m from adjusting items.
The working capital inflow of £7.6m (HY2025: outflow of £2.5m) since year end is due to the timing of period end compared to the billing cycles of both publishers and retailers as well as beneficial terms on collectables.
Capital expenditure in the period was £0.9m (HY2025: £2.3m), a decrease of £1.4m driven by the timing of investment in technology, warehouses and offices.
Lease payments of £3.0m (HY2025: £3.3m) decreased by £0.3m in line with lease renewals.
Net interest and fees of £1.2m (HY2025: £1.6m) decreased by £0.4m, due to an improved Average Bank Net Cash position in the current period.
Tax paid of £4.2m (HY2025: £3.6m) was a £0.6m increase, owing to a refund of corporation tax received in the prior 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 an outflow of £0.6m (HY2025: inflow of £2.1m). In the current period, outflows include £0.3m of technology investments and £0.1m of professional fees in respect of the Pensions Regulator's investigation into the Tuffnells pension scheme and settlement of insurance claims.
In the prior 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 buy out and winding up of the News Section of the WH Smith defined benefit 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.
Refer to the Glossary for a reconciliation of free cash flow to the net movement in cash and cash equivalents.
Bank Net Cash/Debt
|
£m |
As at 28 Feb 2026 |
As at 1 Mar 2025 |
|
Opening Bank Net Cash/(Debt) |
3.3 |
(11.0) |
|
Free cash flow |
21.2 |
13.3 |
|
Dividend paid |
(16.7) |
(13.2) |
|
Purchase of shares for employee benefit trust |
- |
(1.5) |
|
Bank Net Cash/(Debt) |
7.8 |
(12.4) |
Bank Net Cash at 28 February 2026 was £7.8m, compared to £12.4m (Debt) at 1 March 2025, an improvement of £20.2m. Average Bank Net Cash/(Debt) moved from £1.1m (Net Debt) to £16.2m (Net Cash) in the current period.
Compared to Average Bank Net Cash, reported Bank Net Cash is impacted by the payment of the final ordinary dividend (£9.3m) and special dividend (£7.4m) on 5 February 2026 offset by a working capital inflow for the period.
The Company's Bank Net Cash: Bank EBITDA ratio was -0.3x (HY2025: +0.3x), which is within our main leverage covenant ratio of +2.5x (HY2025: 2.5x) 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 FY2025 final ordinary dividend of £9.3m (HY2025: FY2024, £8.3m) and a special dividend of £7.4m (HY2025: FY2024, £4.9m) were paid, bringing the total dividends paid in respect of FY2025 to £20.9m (FY2024: £17.4m).
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 Board's assessment of these risks is aligned to the strategic business planning process and regulatory landscape.
Risks are plotted on risk maps with descriptions, owners, and mitigating actions using a risk rating matrix which takes into consideration both the likelihood and the magnitude of the impact in the event that a risk event occurs. The final risk rating matrix used to identify principal risks is based on the residual risk that the Company faces after taking into consideration the internal control environment and related mitigating actions and controls. 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 climate-related risk environment. The Board has 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 remain 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 industry sectors and that cyber threats continue to indiscriminately evolve. To meet the needs of our stakeholders, our IT infrastructure and data processes need to be flexible, reliable and secure from cyber-attacks. Secure infrastructure acts as a deterrent to, and helps prevent and/or mitigate the impact of, external cyber-attack, internal threat or supplier-related breach, which could cause service interruption and/or the loss of Company and customer data. Cyber incidents could lead to major adverse customer, financial, reputational and regulatory impacts.
|
· Defined risk-based approach to the information security roadmap and technology strategy which is aligned to strategic plans. · Regular tracking of key programmes against spend targets and delivery dates. · The Company assesses cyber risk on a day-to-day basis, using proactive and reactive information security controls to detect and mitigate common threats. · Dedicated investments in information security and access to third-party cyber security specialists, including 24/7 security monitoring, 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. |
Strategic link: Technology
Change: Stable - despite ongoing investment and enhancements in the Company's IT infrastructure and IT security the backdrop remains heightened, leading to a stable risk assessment. |
|
2. Macro-economic uncertainty |
||
|
Deterioration in the macro-economic environment could result in supply-side cost inflation and/or a reduction in demand-side sales volumes. Supply-side macro-economic pressures could present the Company with additional cost challenges, e.g. increased competition in the distribution labour market and/or rises in fuel and utility prices. Adverse changes to economic conditions could result in reduced consumer demand for newspapers and magazines and/or reduction in titles/editions. These cost increases and sales pressures present a risk when they cannot be fully mitigated through increased prices or other productivity gains. This could result in deterioration in the level of profitability in both the short and medium term and impacts on the Company's ability to execute its strategies, including level of debt and liquidity objectives. |
· Annual budgets and forecasts take into account the current macro-economic environment to set expectations internally and externally, allowing for or changing objectives to meet short- and medium-term financial targets. · Weekly cost monitoring enables oversight and action on a timely basis. · Cover price increases in magazine and newspaper titles provide some offset against the impact of volume decline. · Predictable level of volume decline within the news and magazine wholesaling business enables cost optimisation planning. · 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.
|
Strategic link: Cost and efficiencies, Operations
Change: Stable - Whilst the UK economy grew modestly in 2025 and the first quarter of 2026, inflation remains above the Bank of England's target range. Increases in the National Living Wage continue to match or exceed inflation. Employers' national insurance contributions increased in April 2025 and have added to the Company's cost base. The tightening standards pursuant to the Employment Rights Bill is expected to create further cost pressures.
The ongoing conflict in the Middle East has not had a significant direct impact on Smiths News to date, with negligible effect on our cost base at this stage. We continue to monitor the situation closely and assess any potential implications for our contractor base.
|
|
3. Changes to retailers' commercial environment |
||
|
Our largest retailers (e.g. grocers and symbol group members) remain under significant pressure to maximise sales and profitability by channel within their retail stores and at associated sale outlets, such as at petrol 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 newspapers' and/or magazines' selling space in-store (or its location) in favour of other higher margin products and/or the delisting of all/particular titles of newspapers and/or magazines. 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 other retailers) could materially reduce the Company's revenue, profitability and cash flow. |
· Our EPoS-based returns (EBR) solution is utilised by our largest retailers, improving staff efficiency in managing the newspaper and magazine category, thereby reducing cost to the retailer. · Supply-side shrink activities underway and renewed focus improve channel profitability and reduce complexity associated with the category. · Form stronger partnerships with emerging retailers to stock magazines and newspapers. · Monitor the impact to the business of a change to major retail customer ownership.
|
Strategic link: Cost and efficiencies
Change: Stable |
|
4. Acquisition and retention of labour |
||
|
Due to competition and constraints in the current distribution labour market, this could lead to an increased risk of being unable to recruit and/or retain warehouse colleagues and support staff. The same pressures are also being felt in sourcing and retaining delivery sub-contractors as well as filling in-house roles within our central support functions. A failure to maintain an appropriate level of resourcing could result in increased costs, employee disengagement and/or loss of management focus which underpin our ability to address the strategic priorities and to deliver forecasted performance. |
· We seek to offer market competitive terms to ensure talent remains engaged. · We offer long-term contracts with our sub-contracted delivery partners. · We use a variety of platforms to recruit employees and delivery sub-contractors. · The level of vacancies across warehouse and delivery sub-contractors is monitored daily. · We undertake workforce planning; performance, talent and succession initiatives; learning and development programmes; and promote the Company's culture and core values. · 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.
|
Strategic link: People first, Culture and values, Cost and efficiencies
Change: Stable - Vacancy levels remain stable and our colleague turnover compares favourably with our sector. Retention challenges remain for specific job roles which are managed through agile and bespoke responses. |
|
5. Execution risk within the growth verticals |
||
|
A successful growth and diversification strategy is essential to the long-term success of the Company. Landing and implementing new business growth opportunities to increase the Company's revenue and profit streams carries an execution risk to achieving our vision and purpose. |
· Strong project management and governance in place to sign-off new vertical activities and oversee their implementation. · A Growth Business Development Group and Growth Operations Delivery Steering Committee have been established to review and control new business opportunities and then plan and measure the impact of these opportunities on established operations. · Experimentation through trials of new business opportunities is deployed to assess the demand and potential economic benefit of such opportunities. · 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. |
Strategic link: Cost and efficiencies
Change: Stable - Our growth verticals' initiatives are expected to become a more significant part of our business over time, leading to space and capacity constraints at both our sites and in our vehicles potentially increasing. In addition, layering in of change projects such as our investment in a Warehouse and separate Transport Management systems, and the Operational Excellence programme may create management bandwidth and operational pressure pressures in the short-term before improvements become evident. |
|
6. Sustainability and climate change |
||
|
Our sustainability linked risks extend beyond the physical and transitional risks associated with climate change which we have previously identified, such as a scarcity of resources, extreme weather events, power outages, increasing regulation and associated cost in response to a drive to 'net zero' carbon emissions and the increasingly stringent air quality emission zones. While we have seen some regulatory requirements and reporting obligations on environmental, social and governance (ESG) matters being reduced (in both the USA and EU) this has not been reflected in UK trends in many areas and thus the need for ongoing investment and focus remains to ensure we continue to deliver in the areas of workplace safety, cyber security, as well as delivering on our diversity and inclusion commitments. Despite perceptions of reductions in the regulations and expectations associated with sustainability we remain aware of the ongoing risk of reputational damage and/or loss of revenue if the Company fails to meet regulatory requirements and stakeholder expectations across our sustainability framework. |
· Board Sustainability Committee established (chaired by the Chief Financial Officer) to consider and determine the Company's sustainability strategy and progress, together with risk environment and activities and actions. · Dedicated management Sustainability Steering Committee established (also chaired by the Chief Financial Officer) coordinates the Company's day-to-day activities and actions in delivering the Company's sustainability strategy, including in relation to climate change. · We work with suppliers to ensure they share the Company's vision to act on sustainability and climate change. · 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. |
Strategic link: Cost and efficiencies, Operations, Sustainability
Change: Decreasing - Carbon emissions are reducing and emission reporting has been strengthened. Health and safety and diversity risk controls and mitigating actions are now well established and embedded within the processes to address the risk.
|
|
7. Major newspaper titles exit the market or move to digital only editions |
||
|
Significant decline in advertising and/or circulation revenues, together with rising production costs, could lead to one or more national newspaper titles exiting the market and/or publications being taken fully digital. This could lead to a significant deterioration in the Company's profitability and cash flow in both the short and medium term, as well as impacting on its ability to execute its strategies. |
· We seek to ensure full availability of alternative newspaper titles to maximise substitution opportunities for customers. · Partial mitigation against newspaper title closures is built into our contracts with major publishers. · Ongoing successful execution of our growth and diversification strategy provides longer-term mitigation through alternative profitable revenue streams. |
Strategic link: Cost and efficiencies,
Change: Decreasing - Closure of a major title is considered unlikely in the foreseeable future. |
|
8. Legal and regulatory compliance |
||
|
The Company is required to be compliant with all applicable laws and regulations. Failure to adhere to these could result in financial penalties, third party redress, and/or reputational damage. Key areas of legal and regulatory compliance include: · GDPR · Health and Safety · Tax compliance · Environmental legislation · Employment law |
· Changes in laws and regulations are monitored, with policies and procedures being updated as required. · Business-wide mandatory training programmes for higher-risk regulatory areas. · External experts are used where applicable. · All major policies are reviewed by the Board or Audit Committee on an annual basis. · Operational auditing and monitoring systems for higher risk areas.
|
Strategic link: Technology, Sustainability, Operations
Change: Decreasing - Recent engagement activities support a lessening risk environment together with specific legal advice having been sought in order to improve our awareness of recycling and waste management-related regulations for Smiths News Recycle proposition.
The risk environment in other key areas of legal and regulatory compliance remains stable. |
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 |
Richard Clay |
|
Chief Executive Officer |
Chief Financial Officer |
|
5 May 2026 |
5 May 2026 |
INTERIM FINANCIAL STATEMENTS
Condensed Consolidated Income Statement (Unaudited)
For the 26 weeks to 28 February 2026
|
£m |
Note |
26 weeks to 28 February 2026 |
26 weeks to 1 March 2025 |
||||
|
|
|
Adjusted |
Adjusting items* |
Total |
Adjusted |
Adjusting items* |
Total |
|
Revenue |
|
515.7 |
- |
515.7 |
536.4 |
- |
536.4 |
|
Cost of sales |
|
(478.3) |
- |
(478.3) |
(499.1) |
- |
(499.1) |
|
Gross profit |
|
37.4 |
- |
37.4 |
37.3 |
- |
37.3 |
|
Administrative expenses |
3 |
(19.2) |
(0.6) |
(19.8) |
(17.8) |
(1.1) |
(18.9) |
|
Net impairment (loss)/reversal on trade receivables |
|
(0.1) |
- |
(0.1) |
(0.1) |
1.7 |
1.6 |
|
Income from joint ventures |
|
0.2 |
- |
0.2 |
- |
- |
- |
|
Operating profit |
3 |
18.3 |
(0.6) |
17.7 |
19.4 |
0.6 |
20.0 |
|
Finance costs |
|
(1.6) |
- |
(1.6) |
(1.8) |
- |
(1.8) |
|
Finance income |
|
0.3 |
- |
0.3 |
0.1 |
- |
0.1 |
|
Profit before tax |
3 |
17.0 |
(0.6) |
16.4 |
17.7 |
0.6 |
18.3 |
|
Income tax (expense)/credit |
4 |
(4.3) |
0.1 |
(4.2) |
(4.6) |
(0.2) |
(4.8) |
|
Profit for the period attributable to equity shareholders |
|
12.7 |
(0.5) |
12.2 |
13.1 |
0.4 |
13.5 |
|
|
|
|
|
|
|
|
|
|
Earnings in pence per share |
|
|
|
|
|
|
|
|
Basic |
6 |
|
|
5.0 |
|
|
5.6 |
|
Diluted |
6 |
|
|
4.8 |
|
|
5.4 |
|
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 to the interim financial statements.
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
For the 26 weeks to 28 February 2026
|
£m |
Note |
26 weeks to 28 Feb 2026 |
26 weeks to 1 Mar 2025 |
|
Profit for the period |
|
12.2 |
13.5 |
|
Items that will not be reclassified to the Income Statement: |
|
|
|
|
Tax credit on pension surplus |
10 |
- |
1.5 |
|
Total comprehensive income for the period |
|
12.2 |
15.0 |
Condensed Consolidated Balance Sheet (Unaudited)
As at 28 February 2026
|
£m |
Note |
As at 28 Feb 2026 |
As at 30 Aug 2025 |
|
|
|
Non-current assets |
|
|
|
|
|
|
Intangible assets |
|
2.4 |
2.5 |
|
|
|
Property, plant and equipment |
|
10.2 |
10.7 |
|
|
|
Right of use assets |
|
28.3 |
29.4 |
|
|
|
Interest in joint ventures |
|
4.6 |
4.6 |
|
|
|
Deferred tax assets |
|
0.6 |
0.8 |
|
|
|
Other non-current assets |
|
0.9 |
0.9 |
|
|
|
|
|
47.0 |
48.9 |
|
|
|
Current assets |
|
|
|
|
|
|
Inventories |
|
11.7 |
12.6 |
|
|
|
Trade and other receivables |
|
99.1 |
103.4 |
|
|
|
Cash and cash equivalents |
7 |
10.5 |
8.2 |
|
|
|
Corporation tax receivable |
|
1.3 |
0.9 |
|
|
|
|
|
122.6 |
125.1 |
|
|
|
Total assets |
|
169.6 |
174.0 |
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade and other payables |
|
(128.8) |
(127.2) |
|
|
|
Lease liabilities |
|
(6.2) |
(5.6) |
|
|
|
Provisions |
8 |
(0.6) |
(0.5) |
|
|
|
|
|
(135.6) |
(133.3) |
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Borrowings |
7 |
- |
(1.7) |
|
|
|
Lease liabilities |
|
(23.4) |
(24.9) |
|
|
|
Provisions |
8 |
(4.7) |
(4.6) |
|
|
|
|
|
(28.1) |
(31.2) |
|
|
|
Total liabilities |
|
(163.7) |
(164.5) |
|
|
|
Total net assets |
|
5.9 |
9.5 |
|
|
|
Equity |
|
|
|
||
|
Called up share capital |
11 |
12.4 |
12.4 |
||
|
Share premium account |
11 |
60.5 |
60.5 |
||
|
Demerger reserve |
|
(280.1) |
(280.1) |
||
|
Own shares reserve |
|
(1.2) |
(2.9) |
||
|
Translation reserve |
|
0.1 |
0.2 |
||
|
Retained earnings |
|
214.2 |
219.4 |
||
|
Total shareholders' funds |
|
5.9 |
9.5 |
||
Condensed Consolidated Statement of Changes in Equity (Unaudited)
For the 26 weeks to 28 February 2026
|
£m |
Note |
Share capital |
Share Premium Account |
Demerger reserve |
Own shares reserve |
Translationreserve |
Retained Earnings |
Totalequity |
|
Balance at 31 August 2025 |
|
12.4 |
60.5 |
(280.1) |
(2.9) |
0.2 |
219.4 |
9.5 |
|
Profit for the period |
|
- |
- |
- |
- |
- |
12.2 |
12.2 |
|
Total comprehensive income for the period |
|
- |
- |
- |
- |
- |
12.2 |
12.2 |
|
Dividends paid |
5 |
- |
- |
- |
- |
- |
(16.7) |
(16.7) |
|
Employee share schemes purchases |
|
- |
- |
- |
(0.1) |
- |
- |
(0.1) |
|
Employee share scheme awards |
|
- |
- |
- |
1.8 |
- |
(1.4) |
0.4 |
|
Recognition of share-based payments, net of tax |
|
- |
- |
- |
- |
- |
0.5 |
0.5 |
|
Transfer |
|
- |
- |
- |
- |
(0.1) |
0.1 |
- |
|
Current tax recognised in equity |
|
- |
- |
- |
- |
- |
0.3 |
0.3 |
|
Deferred tax recognised in equity |
|
- |
- |
- |
- |
- |
(0.2) |
(0.2) |
|
Balance at 28 February 2026 |
|
12.4 |
60.5 |
(280.1) |
(1.2) |
0.1 |
214.2 |
5.9 |
|
£m |
Note |
Share capital |
Share Premium Account |
Demerger reserve |
Own shares reserve |
Translationreserve |
Retained Earnings |
Totalequity |
|
Balance at 1 September 2024 |
|
12.4 |
60.5 |
(280.1) |
(3.7) |
0.2 |
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 |
(280.1) |
(2.8) |
0.2 |
207.9 |
(1.9) |
Condensed Consolidated Cash Flow Statement (Unaudited)
For the 26 weeks to 28 February 2026
|
£m |
Note |
26 weeks to 28 Feb 2026 |
26 weeks to 1 Mar 2025 |
|
Net cash inflow from operating activities |
10 |
26.0 |
20.4 |
|
Investing activities |
|
|
|
|
Interest received |
|
0.2 |
0.1 |
|
Dividends received from joint ventures |
|
0.1 |
0.1 |
|
Purchase of fixed assets |
|
(0.9) |
(2.3) |
|
Net cash used in investing activities |
|
(0.6) |
(2.1) |
|
Financing activities |
|
|
|
|
Interest paid |
|
(1.4) |
(1.7) |
|
Dividend paid |
|
(16.7) |
(13.2) |
|
Repayments of lease principal |
|
(3.0) |
(3.3) |
|
Net (decrease)/increase in revolving credit facility |
7 |
(2.1) |
0.7 |
|
Purchase of shares for employee benefit trust |
|
(0.1) |
(1.5) |
|
Proceeds from exercise of share purchase options |
|
0.2 |
- |
|
Net cash used in financing activities |
|
(23.1) |
(19.0) |
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
2.3 |
(0.7) |
|
Opening net cash and cash equivalents |
|
8.2 |
7.0 |
|
Closing net cash and cash equivalents |
|
10.5 |
6.3 |
Notes to the Condensed Unaudited Interim Financial Statements
For the 26 weeks to 28 February 2026
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 2025 Annual Report and Accounts. The financial period represents the 26 weeks ended 28 February 2026 (prior period 26 weeks ended 1 March 2025).
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 52 weeks ended 30 August 2025, 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 52 weeks ended 30 August 2025 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 28 February 2026 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 asset position of £5.9m as at 28 February 2026. 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. 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 £38.5m was available and the Group had £10.5m of cash on hand, giving headroom of £49.0m. Average daily Bank Net Cash during the period was £16.2m (H1 2025: average debt of £1.1m). 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 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. During the prior period, the first one-year extension was exercised. After the balance sheet date, the second one-year extension was exercised, which extended the maturity date to 2 May 2029.
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 2027, 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 2027 if EBITDA was 72% 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;
· period-on-period declines in revenues would have to be significantly greater than historical trends;
· 96% of contracted revenues at current rates are secured with publishers 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 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 "Lack of exchangeability - Amendments to IAS 21".
This amendment to accounting standards had no impact on the financial statements in the prior or current periods.
New standards in issue but not yet effective
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early.
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 continues to be assessed. The standard is effective from 1 January 2027 with early adoption permitted.
The Group does not expect any other standards issued by the IASB, but not yet effective, to have a material impact on the Group.
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
Revenue from wholesale distribution - £513.9m (H1 2025: £534.8m)
Revenue from wholesale distribution is recognised when products and services have been delivered to and receipted by customers and there is no unfulfilled obligation that could affect the customer's acceptance of the products or services.
Revenue is earned from the wholesale of products, from charges for services, being the sortation, delivery, merchandising and return of products, and from the sale of recyclable returns waste. Products sold and handled are principally newspapers, magazines and collectables, but also include other items such as toys and greeting cards. Certain products are sold to retailers on a sale or return basis and estimation is made of the expected returns as outlined further below.
Within revenue from wholesale distribution, the Group recognises revenue from 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 £433.5m (H1 2025: £453.9m).
Other revenue - £1.8m (H1 2025: £1.6m)
Other revenue includes income from services to collect recyclate waste from customers, the short-term use of storage and space in depots and management fees for support provided to third parties.
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 cost of £0.5m (H1 2025: net credit of £0.4m) 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 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 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 8 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
£4.9m (FY2025: £4.6m)
3 Adjusting items
The table below summarises amounts that have been classified as adjusting items in the period:
|
£m |
|
26 weeks to 28 February 2026 |
26 weeks to 1 March 2025 |
|
Technology transformation costs |
(a) |
(0.3) |
(0.4) |
|
Transformation programme planning costs |
(b) |
(0.2) |
- |
|
Tuffnells costs |
(c) |
(0.1) |
(0.6) |
|
Network and reorganisation costs |
(d) |
- |
(0.1) |
|
Administrative expenses |
|
(0.6) |
(1.1) |
|
Impairment reversal on trade receivables |
(e) |
- |
1.7 |
|
Total before tax |
|
(0.6) |
0.6 |
|
Taxation |
|
0.1 |
(0.2) |
|
Total after taxation |
|
(0.5) |
0.4 |
The Group incurred total costs of £0.6m (H1 2025: net credits of £0.6m) in respect of adjusting items before tax and costs of £0.5m (H1 2025: credits of £0.4m) after tax respectively.
a) Technology transformation costs £0.3m (H1 2025: £0.4m)
The Group is undergoing a transformation programme to enhance its technology infrastructure and enable alignment to the Group's vision and strategy.
Implementation costs of £0.3m (H1 2025: £0.4m) 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.
b) Transformation programme planning costs £0.2m (H1 2025: £nil)
During the current period £0.2m of consultancy fees were incurred in respect of a strategic recycling project. These costs have been presented within adjusting items as the nature the project is expected to be significant and transformational. The cash impact during the current period was £nil.
c) Tuffnells costs £0.1m (H1 2025: £0.6m)
In the current period legal and other professional fees of £0.1m (H1 2025: £0.6m) were incurred in respect of the Group responding to 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. Further details are included in note 9.
Insurance claim provisions are held from previous ownership of Tuffnells - no further adjustment has been made in the current or prior period to the remaining insurance provision.
The cash impact during the period was an outflow of £0.1m (H1 2025: £0.7m) comprising £0.1m (H1 2025: £0.1m) of insurance settlements and £nil (H1 2025: £0.6m) of legal and other professional fees.
d) Network and re-organisation costs £nil (H1 2025: £0.1m)
During the prior period, additional costs of £0.1m were provided for simplifying the DMD group structure. The cash impact during the prior period was an outflow of £0.1m.
e) Impairment reversal on trade receivables £nil (H1 2025: release of £1.7m)
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 debt 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 with the provision reduced accordingly. The reduction in provision was reported as an adjusting item on the same basis as previous impairment losses and reversals recognised during prior periods.
4 Income tax charge
The income tax charge for the 26 weeks ended 28 February 2026 was 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 25.3% (H1 2025: 26.0%).
A tax rate of 25% was applied to UK corporation tax and, for other jurisdictions, taxation was applied using prevailing rates.
5 Dividends
|
Dividends proposed in the period |
26 weeks to 28 Feb 2026 |
26 weeks to 1 Mar 2025 |
26 weeks to 28 Feb 2026 |
26 weeks to 1 Mar 2025 |
|
|
Per share |
Per share |
£m |
£m |
|
Interim dividend - proposed |
1.75p |
1.75p |
4.3 |
4.2 |
|
|
|
|
|
|
|
Dividends paid in the period |
Per share |
Per share |
£m |
£m |
|
Final dividend - prior period |
3.80p |
3.40p |
9.3 |
8.3 |
|
Special dividend - prior period |
3.00p |
2.00p |
7.4 |
4.9 |
An interim dividend of 1.75p per ordinary share is proposed for the 26-week period to 28 February 2026 (H1 2025: 1.75p per ordinary share), which is expected to be paid on 3 July 2026 to all shareholders who are on the register of members at the close of business on 5 June 2026. The ex-dividend date will be 4 June 2026.
The FY2025 final ordinary dividend of 3.8p per share (£9.3m) and special dividend of 3.0p (£7.4m) were approved by shareholders at the Annual General Meeting on 29 January 2026, paid on 5 February 2026 and recognised in these Interim Financial Statements.
6 Earnings per share
|
|
26 weeks to 28 Feb 2026 |
26 weeks to 1 Mar 2025 |
||||
|
|
Earnings (£m) |
Weighted average number of shares million |
Pence per share (p) |
Earnings (£m) |
Weighted average number of shares million |
Pence per share (p) |
|
Weighted average number of shares in issue |
|
247.7 |
|
|
247.7 |
|
|
Shares held by the Employee Benefit Trust (weighted) |
|
(3.6) |
|
|
(5.2) |
|
|
|
|
244.1 |
|
|
242.5 |
|
|
Basic earnings per share (EPS) |
|
|
|
|
|
|
|
Adjusted earnings attributable to ordinary shareholders |
12.7 |
244.1 |
5.2 |
13.1 |
242.5 |
5.4 |
|
Adjusting items |
(0.5) |
|
|
0.4 |
|
|
|
Earnings attributable to ordinary shareholders |
12.2 |
244.1 |
5.0 |
13.5 |
242.5 |
5.6 |
|
Diluted EPS |
|
|
|
|
|
|
|
Effect of dilutive securities |
|
8.0 |
|
|
9.5 |
|
|
Diluted Adjusted EPS |
12.7 |
252.1 |
5.0 |
13.1 |
252.0 |
5.2 |
|
Diluted EPS |
12.2 |
252.1 |
4.8 |
13.5 |
252.0 |
5.4 |
Dilutive shares increase the basic number of shares by 8.0m to 252.1m (H1 2025: by 9.5m to 242.0m). The calculation of diluted EPS reflects the potential dilutive effect of employee incentive schemes.
7 Cash and borrowings
Cash and borrowings by currency (sterling equivalent) are as follows:
|
£m |
Sterling |
Euro and other |
Total 28 Feb 2026 |
At 30 Aug 2025 |
|
Cash and cash equivalents |
7.6 |
0.2 |
7.8 |
5.4 |
|
Cash held by the EBT to purchase own shares |
2.7 |
- |
2.7 |
2.8 |
|
Cash and cash equivalents |
10.3 |
0.2 |
10.5 |
8.2 |
|
Revolving credit facility - disclosed within non-current liabilities |
- |
- |
- |
(2.1) |
|
Unamortised arrangement fees - disclosed within non-current liabilities* |
- |
- |
- |
0.4 |
|
Total cash/(borrowings) |
10.3 |
0.2 |
10.5 |
(1.7) |
|
Total cash/net cash |
10.3 |
0.2 |
10.5 |
6.5 |
|
Total borrowings |
|
|
|
|
|
Amount due after 12 months |
- |
- |
- |
(1.7) |
*At 28 February 2026, unamortised arrangement fees of £0.3m were presented within trade and other receivables as no revolving credit facility was drawn at the balance sheet date.
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits and funds 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. During the prior period, the first one-year extension was exercised. After the balance sheet date, the second one-year extension was exercised, which extended the maturity date to 2 May 2029.
At 28 February 2026 none 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 28 February 2026, the Company had £40.0m (FY2025: £37.9m) 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 (FY2025: £1.5m); further details are included in Note 10.
During the period, the net decrease of £2.1m in borrowings comprised £8.9m of cash inflows from drawing down the RCF and £11.0m of cash outflows from repayment of the RCF.
Analysis of net debt
|
£m |
As at 28 Feb 2026 |
As at 30 Aug 2025 |
|
Cash and cash equivalents |
7.8 |
5.4 |
|
Cash held by the EBT for the purchase of shares |
2.7 |
2.8 |
|
Non-current borrowings |
- |
(1.7) |
|
Net cash |
10.5 |
6.5 |
|
Lease liabilities |
(29.6) |
(30.5) |
|
Net debt |
(19.1) |
(24.0) |
8 Provisions
|
£m |
Reorganisation provisions |
Insurance and legal provisions |
Property provisions |
Total |
|
|
At 31 August 2025 |
(0.1) |
(0.4) |
(4.6) |
(5.1) |
|
|
Charged to the income statement |
- |
- |
(0.2) |
(0.2) |
|
|
Utilised in period |
- |
0.1 |
- |
0.1 |
|
|
Unwinding of discount utilisation |
- |
- |
(0.1) |
(0.1) |
|
|
At 28 February 2026 |
(0.1) |
(0.3) |
(4.9) |
(5.3) |
|
|
|
|
|
|
|
|
|
£m |
28 Feb 2026 |
||||
|
Included within current liabilities |
(0.6) |
||||
|
Included within non-current liabilities |
(4.7) |
||||
|
Total |
(5.3) |
||||
Reorganisation provisions relate to the ongoing restructure of the DMD business.
Insurance and legal provisions represent the expected future costs of employer's liability, public liability, motor accident claims and legal claims, including those related to the Tuffnells business prior to disposal.
The property provision represents the estimated cost of dilapidations on leased properties across the Group, with exit dates expected over the ten-year period to 2036. These provisions have been discounted to present value, and this discount will be unwound over the life of the leases.
The Group has performed a sensitivity analysis on the property provision. If the repair cost per square foot changed by +/- £1.00, the property provision would change by +/- £0.5m.
9 Contingent liabilities and capital commitments
Bank and other guarantees
As at 28 February 2026, the Group had approved letters of credit of £1.5m (FY2025: £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, during the year the Company incurred £0.1m (H1 2025: £0.6m) of legal and other professional fees in considering and responding to enquiry requests from the Pension Regulator (tPR) in relation to tPR's ongoing investigation into the Tuffnells defined benefit pension scheme and the Company's period of ownership of Tuffnells, which had concluded with its sale in May 2020.
On 20th February 2026, the Company received a Warning Notice 'WN', which explains that tPR is considering issuing a Financial Support Direction ("FSD") against Smiths News in relation to the Tuffnells Scheme. An FSD is based on a 'no-fault' liability-regime and forms part of tPR's wide-ranging powers. In addition to Smiths News, a number of other parties connected to Tuffnells are identified in the WN as potential targets of tPR's powers.
tPR has stated in the WN that the s75 liability of the Tuffnells Scheme, which is the maximum amount tPR can seek in aggregate from all targets, is estimated at £3.467m.
The Company is reviewing the WN with its advisers and will have an opportunity to make submissions to tPR in response. These will be considered by tPR's case team and then referred to a Determinations Panel before any decision is made as to whether an FSD should be issued against Smiths News, and if so, in what form or for what value. It is therefore too early to know if an FSD will be issued, or the amount or form of any such support.
The Board has considered the nature and circumstances of tPR's investigation to date and concluded, at the date of authorisation of the financial statements, that no provision is required, particularly given that no FSD has been issued, it remains uncertain at this time as to how tPR may proceed.
Accordingly, the Board has concluded that the matter represents a possible obligation only and has disclosed a contingent liability. The Board maintains the view that Smiths News acted reasonably throughout its time as parent of Tuffnells and that it was an overall net contributor of funding and support 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
A potential liability could crystallise in respect of the previous assignment of a lease 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). Should the Group be required to pay its share of the rental commitment of this lease at 28 February 2026, total rent of £0.9m (FY2025: £0.9m) would be payable over the remaining lease term to March 2033.
Capital commitments
Contracts placed for future capital expenditure approved by the directors but not provided for amount to £0.1m (FY2025: £0.1m).
10 Net cash inflow from operating activities
|
£m |
|
26 weeks to 28 Feb 2026 |
26 weeks to 1 Mar 2025 |
|
Operating profit |
|
17.7 |
20.0 |
|
Share of profits of joint ventures |
|
(0.2) |
(0.1) |
|
Depreciation of property, plant and equipment |
|
1.2 |
1.2 |
|
Depreciation of right of use assets |
|
3.2 |
3.2 |
|
Amortisation of intangible assets |
|
0.3 |
0.2 |
|
Share-based payments |
|
0.5 |
0.5 |
|
Decrease in inventories |
|
0.9 |
6.2 |
|
Decrease/(increase) in receivables |
|
4.6 |
(1.2) |
|
Increase/(decrease) in payables |
|
2.1 |
(7.0) |
|
Decrease in provisions |
|
(0.1) |
(0.5) |
|
Income tax paid |
|
(4.2) |
(3.6) |
|
Refund of tax on pension surplus* |
|
- |
1.5 |
|
Net cash inflow from operating activities |
|
26.0 |
20.4 |
* During the prior 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.
Net cash inflow from operating activities is stated after outflows of £0.6m (H1 2025: net inflows of £2.1m) from adjusting items.
11 Share capital
a) Share capital
|
£m |
28 Feb 2026 |
1 Mar 2025 |
|
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 March 2025 |
247.7 |
|
At 28 February 2026 |
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 |
28 Feb 2026 |
1 Mar 2025 |
|
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 28 February 2026. There have been no material changes to or material transactions with related parties as disclosed in Note 26 of the Annual Report and Accounts for the 52-week period ended 30 August 2025.
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 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 unrelated to the Group's ordinary activities or consistent with items treated as adjusting in prior periods. Excluding these items provide 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/ Note 3 |
Adjusted profit before tax is defined as profit before tax excluding the impact of adjusting items (defined above). |
|
Adjusted profit after tax |
Profit after tax (PAT) |
Adjusted items |
Income statement/ Note 3 |
Adjusted profit after tax is defined as profit after tax, excluding the impact of adjusting items (defined above). |
|
Adjusted EBITDA |
Operating profit* |
Depreciation and amortisation Adjusting items |
Glossary |
This measure is based on business unit operating profit from continuing operations. It excludes depreciation, amortisation and adjusting items. |
|
Bank EBITDA |
Operating profit* |
Depreciation and amortisation Adjusting items Operating lease charges |
Glossary |
This measure is based on business unit operating profit from continuing operations. It excludes depreciation, amortisation, adjusting items and adds back operating lease charges under accounting standards applicable in 2019 and share-based payments expense. This measure is used to calculate compliance 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 purchases
|
Glossary |
Free cash flow is defined as the movement in cash and cash equivalents excluding the following; the payment of dividends, the impact of acquisitions and disposals, the repayment of bank loan principal amounts and RCF repayments, and outflows for purchases of own shares (Employee Benefit Trust (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 purchases, pension deficit repair payments adjusting items |
Financial review |
Free cash flow (excluding adjusting items) is free cash flow adding back 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 (excluding cash held by the EBT). 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 movements in borrowings and cash to free cash flow
|
|
26 weeks to |
26 weeks to 1 Mar 2025 |
|
Net increase/(decrease) in cash and cash equivalents |
2.3 |
(0.7) |
|
Net decrease/(increase) in borrowings |
2.1 |
(0.7) |
|
Movement in borrowings and cash |
4.4 |
(1.4) |
|
Dividend paid |
16.7 |
13.2 |
|
Outflow for purchase of own shares |
0.1 |
1.5 |
|
Total free cash flow |
21.2 |
13.3 |
Reconciliation of bank net cash to reporting net debt
|
|
At 28 Feb 2026 |
At 30 Aug 2025 |
|
Bank net cash |
7.8 |
3.3 |
|
Cash held by the EBT for the purchase of own shares |
2.7 |
2.8 |
|
Unamortised arrangement fees (note 7) |
- |
0.4 |
|
Lease liabilities |
(29.6) |
(30.5) |
|
Net debt (note 7) |
(19.1) |
(24.0) |
Reconciliation of operating profit to Bank EBITDA
|
|
26 weeks to |
26 weeks to |
|
Operating profit |
17.7 |
20.0 |
|
Adjusting items |
0.6 |
(0.6) |
|
Adjusted operating profit |
18.3 |
19.4 |
|
Depreciation |
1.2 |
1.2 |
|
Amortisation |
0.3 |
0.2 |
|
Right of use asset depreciation |
3.2 |
3.2 |
|
Adjusted EBITDA |
23.0 |
24.0 |
|
Operating lease charges |
(4.4) |
(4.2) |
|
Share-based payments expense |
0.5 |
0.5 |
|
Bank EBITDA |
19.1 |
20.3 |
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 interim financial statements for the 26-week period ended 28 February 2026 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 interim financial statements for the 26-week period ended 28 February 2026 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 the International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410"). 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, 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
5 May 2026
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
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