Smiths News PLC · LSE:SNWS
Smiths News — FY2008 Earnings Presentation
24 slides from Smiths News's earnings presentation, Oct 16, 2008
Slide 1: Preliminary results
Preliminary results 16 October 2008
Slide 2: Agenda
Agenda Highlights Mark Cashmore Business update Mark Cashmore Financial performance Alan Humphrey Summary and outlook Mark Cashmore Questions
Slide 3: Highlights
Highlights Industry leading performance in challenging markets • Underlying profit before tax of £32.5m up 5% • Full year dividend of 6.7p up 5% • EPS of 14.5p up 4% • Free cash flow of £21.4m • Net debt reduced by £8.7m (16.5%) Cost control ahead of inflation Investments delivering planned benefits
Slide 4: Business update
miths News Business update
Slide 5: Markets
Markets Overview • Challenging markets in tough economic conditions • Poor sales in the last quarter Newspapers • Trend of value growth to continue • Price increases and promotions compensating for lower volumes • Regional press environment supports our strategy Magazines • Volume declines reflect d
Slide 6: Service and efficiency
Service and efficiency Key goals achieved • Cost savings of £3.5m • Fuel-price increase managed • Service at all time high • No1 for publishers and retailers Future plans • Further service improvements • Offsetting inflation with cost savings • Investments in place to deliver new efficiencies • Furt
Slide 7: Investing in leadership
Investing in leadership Improving our offer • Widest range of services • Best performance in all areas Securing revenue growth • Future contract opportunities • Corporate development • News International
Slide 8: News International
News International Current network Future network Smiths News Smiths News Current market share of News International - 24% Future market share of News International - 39%
Slide 9: News International
News International New territories resulting from NI contract Brighton Bristol Coventry Harlow Luton Swindon Warrington Current network coverage of Smiths News Additional network coverage from July 2009
Slide 10: OFT
OFT OFT due to report ’late summer’ Announcement expected soon Well positioned for opportunities and challenges
Slide 11: Business development
Business development New revenues • Rascal • TRC – Harper Collins • Newsworks – Newspread (IN&M) • Instore – Sainsbury’s and Co-op • Regional Press – Newsquest New market opportunities • Extending expertise to new contiguous market segments • Shareholder value paramount
Slide 12: A year of progress
A year of progress Increased PBT, dividend, EPS and strong cash flows Cost saving of £3.5m Service leadership Rascal joint venture News International contract gains
Slide 13: Financial performance
miths News Financial performance
Slide 14: Financial Summary
Financial Summary Underlying Underlying Fav/(Adv) Aug 2008 Aug 2007 Change £m £m % Revenue 1,240.6 1,232.4 0.7 Operating profit 36.0 36.0 - Profit before tax 32.5 31.0 4.8 EPS 14.5p 14.0p 3.6 Dividend per share 6.7p 6.4p 4.7 Net debt 44.0 52.7 16.5 • Underlying results exclude non recurring items of
Slide 15: Revenue
Revenue Growth Like-for-like Aug 2008 Aug 2007 revenue Fav/(Adv) growth (1) £m £m % % Newspapers 657.6 640.8 2.6 1.0 Magazines 527.7 541.2 (2.5) (2.5) Other 55.3 50.4 9.7 9.7 Total Revenue 1,240.6 1,232.4 0.7 (0.2) 1 Like-for-like revenue growth excludes major newspaper and magazine publisher contra
Slide 16: Income statement
Income statement Aug 2008 Aug 2007 Fav/(Adv) £m £m Change Underlying Underlying % Revenue 1,240.6 1,232.4 0.7 Gross profit 123.5 125.2 (1.4) Net operating costs (87.5) (89.2) 1.9 Operating profit 36.0 36.0 - Finance costs (3.5) (5.0) Profit before tax 32.5 31.0 4.8 Taxation (6.5) (6.1) Profit after
Slide 17: Earnings per share
Earnings per share Underlying Underlying Fav/(Adv) EPS EPS Change Aug 2008 Aug 2007 % Profit after tax £26.0m £24.9m 4.4 Basic earnings per share 14.5p 14.0p 3.6 Weighted average number of 179.3m 177.8m 0.8 shares Dividend per share 6.7p 6.4p 4.7 Interim dividend 2.2p 2.1p 4.8 Final dividend 4.5p 4.
Slide 18: Non recurring items
Non recurring items Aug 2008 Aug 2007 £m £m Profit on disposal of freehold properties 1.4 - Reorganisation costs (1.3) - Pension curtailment - 5.4 Profit before tax 0.1 5.4 Taxation 0.4 (1.6) Profit after tax 0.5 3.8
Slide 19: Free cash flow
Free cash flow Aug 2008 Aug 2007 £m £m Underlying profit before interest and tax 36.0 36.0 Non-recurring items 0.1 5.4 Profit before interest and tax 36.1 41.4 Depreciation and amortisation 6.1 5.5 Working capital, share based payments and (3.0) 6.9 movement in provisions Adjustment for pension curt
Slide 20: Net debt movement
Net debt movement Aug 2008 £m Free cash flow 21.4 Dividend (11.7) Acquisition of Rascal (2.1) Disposal of freehold properties 2.3 New finance leases (1.2) Movement in net debt 8.7 Opening net debt – Aug 2007 (52.7) 2008 movement 8.7 Closing net debt – Aug 2008 (44.0) The group currently has a £45m t
Slide 21: Pension
Pension Change Aug 2008 Aug 2007 £m £m £m Fav/(Adv) Scheme assets 382.5 321.2 61.3 Scheme liabilities (320.1) (311.3) (8.8) Surplus 62.4 9.9 52.5 Asset cap (62.4) (9.9) (52.5) IAS 19 balance per accounts - - -
Slide 22: Financial Summary
Financial Summary Underlying Underlying Fav/(Adv) Aug 2008 Aug 2007 Change £m £m % Revenue 1,240.6 1,232.4 0.7 Operating profit 36.0 36.0 - Profit before tax 32.5 31.0 4.8 EPS 14.5p 14.0p 3.6 Dividend per share 6.7p 6.4p 4.7 Net debt 44.0 52.7 16.5 • Underlying results exclude non recurring items of
Slide 23: Summary and outlook
miths News ~ Summary and outlook
Slide 24: Summary and outlook
Summary and outlook Key targets achieved Challenging markets Continued focus on service and efficiency Platform for growth in core markets and beyond Strong business fundamentals Difficult year ahead