Smiths News - Refinancing releases dividend shackles
Smith News’ H124 results highlighted the robustness of the underlying business, but also revealed the success that management is achieving in creating long-term shareholder value. For example, 74% of revenue is now contracted until 2029, the recent refinancing saves costs and removes the dividend restriction, and the organic growth initiatives are gaining significant momentum. Furthermore, the revised capital allocation policy raises the possibility that modest, self-funded M&A could add further scope to the growth initiatives. Our revenue and profit forecasts are broadly unchanged, but dividends are materially raised. Our valuation is edged up to 90p.Connect Group is a distributor operating in early distribution and mixed freight. Co. connects suppliers to customers. Co.'s operating segments are: News and Media: News Distribution, News and Media: Media, and Mixed Freight. Co.'s News and Media: News Distribution segment is a U.K. distributor of newspapers and magazines. As of Aug 31 2017, the segment distributed newspapers and magazines to 27,000 retailers across England and Wales from 39 distribution centers. The News and Media: Media segment is a supplier of newspaper and magazines to airlines and a provider of inflight services. The Mixed Freight segment is a provider of next day B2B delivery of Mixed Freight consignments.
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