Smiths News Plc · LSE:SNWS
Smiths News — H1 2008 Earnings Presentation
20 slides from Smiths News's earnings presentation, Apr 24, 2008
Slide 1: Interim Results April 2008
Interim Results 24 April 2008 Mark Cashmore Interim Results April 2008 Chief Executive
Slide 2: Agenda
Agenda Highlights Mark Cashmore Financial performance Alan Humphrey Business update Mark Cashmore Questions Interim Results April 2008
Slide 3: Highlights
Highlights Financials Profit before tax of £16.1m up 6% Interim dividend of 2.2p up 5% Core Value growth across existing markets Cost efficiencies on track Further contract wins Interim Results April 2008 New Revenue Joint venture formed with Rascal Solutions Ltd TRC wins contract with
Slide 4: Financial Performance
Financial Performance Alan Humphrey Interim Results April 2008 Finance Director
Slide 5: Financial summary
Financial summary Change Feb 2008 Feb 2007 Fav/(Adv) £m £m % Revenue 618.4 615.0 0.6% Operating profit 17.9 17.6 1.7% Profit before tax 16.1 15.2 5.9% Interim Results April 2008 Adjusted earnings per share1 7.2p 6.9p 4.3% Dividend per share 2.2p 2.1p 4.8% 1 EPS has been adjusted to reflect the estim
Slide 6: Revenue
Revenue Like for like Year to Change growth1 Feb 2008 Feb 2007 Aug 2007 Fav/(Adv) Fav/(Adv) £m £m £m % % Newspapers 326.6 318.1 2.7% 1.7% 640.8 Magazines 265.2 272.4 (2.6%) (2.6%) 541.2 Other 26.6 24.5 8.6% 8.6% 50.4 Total revenue 618.4 615.0 0.6% - 1,232.4 Interim Results April 2008 1Like for like
Slide 7: Profit before tax
Profit before tax Change Year to Feb 2008 Feb 2007 Fav/(Adv) Aug 2007 £m £m % £m Revenue 618.4 615.0 0.6% 1,232.4 Gross profit 61.7 63.1 (2.2%) 125.2 Net operating costs (43.8) (45.5) 3.7% (89.2) Operating profit 17.9 17.6 1.7% 36.0 Finance costs (1.8) (2.4) (5.0) Interim Results April 2008 Profit b
Slide 8: Earnings per share
Earnings per share Feb Feb Change Adjusted Adjusted Change 2008 2007 Fav/(Adv) Feb 2008 Feb 2007 Fav/(Adv) £m £m % £m £m % Profit before tax 16.1 15.2 5.9% 16.1 15.2 5.9% Taxation (2.0) (0.9) (3.2) (3.0) Tax rate 12% 6% 20% 20% Profit after tax 14.1 14.3 (1.4%) 12.9 12.2 5.7% Interim Results April 2
Slide 9: Free cash flow
Free cash flow Year Feb Feb to 2008 2007 Aug £m £m 2007 £m Profit before interest and tax 17.9 17.6 36.0 Depreciation and amortisation 3.0 2.7 5.5 Non cash items 0.4 0.5 0.5 Working capital (8.0) (3.5) 3.4 Movement in tax debtor - 3.0 3.0 Interim Results April 2008 Capital expenditure (1.3) (1.2) (3
Slide 10: Net debt movement
Net debt movement 6 mths to Feb 2008 £m Free cash flow 4.2 Dividend (7.7) Other movements (0.2) New finance leases (0.7) Movement in net debt (4.4) Interim Results April 2008 Opening net debt (52.7) Closing net debt (57.1)
Slide 11: Pension
Pension Change Feb 2008 Aug 2007 £m £m £m Fav/(Adv) Scheme assets 333.5 321.2 12.3 Scheme liabilities (283.4) (311.3) 27.9 Surplus 50.1 9.9 40.2 Interim Results April 2008 Asset cap (50.1) (9.9) (40.2) IAS 19 balance per accounts - - -
Slide 12: Post balance sheet transactions
Post balance sheet transactions Acquisition of 50% interest in Rascal Solutions Ltd Total consideration £3.0m (£1m deferred until 30 Oct 2008) Net Assets 2007 £1.0m PBT 2007 £0.2m Marginally profit enhancing in the first full year Interim Results April 2008 Sale and leaseback of 5 freehold propertie
Slide 13: Financial summary
Financial summary Change Feb 2008 Feb 2007 Fav/(Adv) £m £m % Revenue 618.4 615.0 0.6% Operating profit 17.9 17.6 1.7% Profit before tax 16.1 15.2 5.9% Interim Results April 2008 Adjusted earnings per share1 7.2p 6.9p 4.3% Dividend per share 2.2p 2.1p 4.8% 1 EPS has been adjusted to reflect the estim
Slide 14: Strategy
Strategy Vision Vision To To be be the the best best performing performing wholesaler wholesaler for for publishers publishers and and retailers, retailers, thereby thereby delivering delivering value value to to shareholders shareholders Efficiency Service New New Revenues Revenues Cost savings wil
Slide 15: Markets
Markets Newspapers H1 Strong price growth Innovative promotions H2 Resilient markets Magazines H1 Continued growth in weekly magazines Interim Results April 2008 Decline slowing in monthly market H2 Challenging market conditions
Slide 16: Operations
Operations Cost efficiencies continue Network rationalisation Service and KPIs improvements Bespoke services Interim Results April 2008 Fleet configuration
Slide 17: Category Management
Category Management Retailer partnerships Profit focused Flexibility of service offer Additional “paid for” services Interim Results April 2008 “Working with Smiths News we are seeing significant progress and finding new ways of adding value.” Tony Start, Martin McColl
Slide 18: Rascal
Rascal Stock management across all stores Contracts with Tesco One-Stop Sainsbury’s Integration with Smiths News’ technology drives value Interim Results April 2008 Wider commercial opportunities
Slide 19: New Business
New Business Core business Contract gains Last mile distribution Business development TRC – HarperCollins Newspread Interim Results April 2008 Rascal Solutions Senior level appointments “By moving to Smiths News, we made significant cost savings without compromising service to retailers“
Slide 20: Summary/Outlook
Summary/Outlook Current sales trends continue Service and efficiency plans on track Strengthening our added value services Progress on new business Interim Results April 2008 OFT announcement Trading in line with expectations "Smiths News is head and shoulders above its competitors and r