Edison Investment Research - Smiths News (SNWS) Smiths News - Stronger balance sheet leads to big dividend hike

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Edison Investment Research

Toby Thorrington

Smiths News - Stronger balance sheet leads to big dividend hike

Smiths News management again delivered on its promises and produced a strong set of interim results, with PBT up 6.3% and EPS up 10.9%. The interim dividend was nearly tripled due to a combination of already announced loosened banking arrangements and considerably lower debt levels. This implies a full-year dividend of 4.2p, which could offer investors a yield of c 13%. Underlying market conditions continue to normalise and with the one-off proceeds now received, we have increased our valuation from 81.5p to 92p a share, nearly three times the current share price.

31/05/2022 1 EN

Underlying

Smiths News

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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GB00B17WCR61 London Stock Exchange United Kingdom

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Toby Thorrington

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Smiths News - Growth potential and a double-digit yield

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Smiths News - Stronger balance sheet leads to big dividend hike

Smiths News - Growth potential and a double-digit yield

Smiths News - FY24 trading good, special dividend proposed

Smiths News - Refinancing releases dividend shackles

Team Internet Group - Two potential bids at 125p

Mendus - Regulatory endorsement supports vididencel focus

Melrose Industries - Fundamentals remain positive

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