Smiths News (LON:NWS) is an interesting company. It's an interesting company primarily for  the reason I always come out with - they do something ostensibly very simple. How can simple be interesting? I find simple interesting because companies doing straightforward tasks, by virtue of competition, have to do them well. Bunzl supply products (all sorts) to places and supply vending machines, but they are everywhere. That's a business we can all relate to - hell, if you can drive, it's a service you could set up and start providing yourself. Safestyle manufacture windows, market windows and install windows; clearly, this too is not rocket science. When you strip away a lot of the stuff which puts people off investing - the image of the banks' 200 page annual reports, full of bizarre terminology and impenetrable figures, I think understanding the businesses is the really enjoyable bit.

Smiths News, hinted at in the name, are distributors of newspapers and magazines. They also own Consortium, which anyone who went to school in the last 15 years (maybe more - I can only speak for myself!) might remember from rubbers, rulers and pencils, and Bertrams, a book distributor. Given that both Consortium and Bertrams were fairly recent acquisitions in the history of the group, it doesn't take too much thought to figure out what's going on here - Smiths News are diversifying. Why are they diversifying? It's an age-old story; a decline in their core market, and an attempt to apply expertise and processes from that core market to other sectors.

I'm looking at Smiths News again because their pre-close trading statement saw the group's share price price dip about 20%, and they currently sit a third off their high - for what seems to me to be a fairly innocuous forecast. The group saw performance in line with last year, itself a reasonable performance, though perhaps some of the disappointment comes from the faster-growing segment (Bertrams) performing poorly. I'm not hugely concerned with trying to figure out what the market was thinking or why it reacts in the way it does, but it seems fairly safe to say that growth was expected, and none was delivered.

The sector

Smiths News, really, is a business buffeted by the winds of economic change, but for those running for the…

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