REG - Smiths News PLC - Preliminary Results
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RNS Number : 0142G Smiths News PLC 04 November 2025
4 November 2025
Smiths News PLC
("Smiths News" or the "Company")
Final Results for the 52 weeks ended 30 August 2025
· Operating profit ahead of market expectations, largely driven by collectables
· Cash position underpinned by strong trading and one-off receipts
· Ordinary and special dividend aligned with capital allocation policy
Smiths News (LSE: SNWS), the UK's largest news wholesaler and a leading
provider of early morning end-to-end supply chain solutions, today announces
audited results for the 52 weeks ended 30 August 2025 (the "Period" or
"FY2025").
Financial highlights:
· Delivered a strong performance in the Period, with adjusted operating profit
above market expectations at £39.1m (FY2024: £39.1m), driven by excellent
collectables performance
· Adjusted operating profit ahead of FY2024 by £0.9m on a comparable 52-week
basis*
· Revenues of £1,064m (-3.6% versus FY2024, -1.7% on a 52-week basis), with 16%
revenue growth from new verticals, and 93% of revenues secured to 2029
· Ongoing focus on cost out programme, delivering £4.9m of operational
efficiencies in FY2025
· Investment programme progressing to plan, with £2.4m of £6.0m three-year
investment made by the end of FY2025
· Adjusted profit after tax increased £2.3m to £27.0m due to lower finance
costs, driving an 8% increase to the ordinary dividend proposed at 2x cover in
line with our capital allocation policy
· Cash generation increased to £36.1m for FY2025 (FY2024: £23.0m on a 52-week
basis*), benefitting from £6.9m of additional receipts, including £5.4m from
the administrators of McColl's Retail Group ("McColl's"), accounting for 98%
of the original debt balance
· In line with our capital allocation policy, we are pleased to announce:
· Proposed final ordinary dividend of 3.80 pence per share due to be paid on 5
February 2026, resulting in a total ordinary dividend for the year of 5.55
pence per share (FY2024: 5.15 pence per share)
· Proposed special dividend of 3.0 pence per share to be paid on 5 February
2026, resulting in total dividends (interim, final and special) for the year
of 8.55 pence per share (FY2024: 7.15 pence per share)
£m 52 weeks to 53 weeks to Change Change
30 Aug 2025 31 Aug 2024 (52-week basis)
Adjusted results( (1))
Revenue 1,064.0 1,103.7 (3.6%) (1.7%)
Operating profit 39.1 39.1 - 2.4%
Profit after tax 27.0 24.7 9.3%
Earnings per share 11.1p 10.3p 0.8p
Statutory results
Revenue 1,064.0 1,103.7 (3.6%)
Operating profit 41.2 40.0 3.0%
Profit after tax 28.3 25.5 11.0%
Earnings per share 11.7p 10.6p 1.1p
Ordinary dividend per share 5.55p 5.15p 0.40p
Special dividend per share 3.00p 2.00p 1.00p
Cash flow and net debt
Free cash flow inflow ((2)) 36.1 7.3 394.5% 57%
Bank Net Cash/(Debt) ((3)) 3.3 (11.0) 130.0%
Average Bank Net Cash/(Debt) 3.3 (11.7) 128.2%
Outlook:
· Resilience in news and magazines market and ongoing operating efficiencies in
the business model underpins confidence
· Anticipate continued strength in the collectables market across FY2026, driven
by one-off events including the Men's Football World Cup and Pokémon's 30(th)
anniversary
· Ongoing momentum in new verticals supported by the appointment of a Managing
Director of Recycling
· Three-year internal investment programme advancing as scheduled to support and
optimise service and efficiency across all verticals
· Management continues to implement strategy to establish Smiths News as a
leading provider of early morning, end-to-end supply chain solutions
· The Company has delivered a good start to trading in the current financial
year and expects to deliver results in line with current market expectations*
Jonathan Bunting, Chief Executive Officer of Smiths News, commented:
"I am delighted Smiths News has delivered such a strong financial and
operational performance across the year, reinforcing the ongoing confidence we
have in our business. Our strategic priorities remain steadfast as we seek to
both leverage and expand our unique UK operating footprint.
"In addition, our existing capital allocation policy has provided us with the
flexibility to both invest in our new business verticals alongside
distributing funds to shareholders.
"Finally, I would personally like to thank everyone at Smiths News for their
dedication and hard work, which collectively, sits at the heart of our ongoing
success."
* Prior to this announcement, the Company determines that consensus market
expectation for FY2026 is adjusted operating profit of £36.7m.
For further information, please contact:
Smiths News PLC via Vigo Consulting
Jonathan Bunting, Chief Executive Officer
Paul Baker, Chief Financial Officer
www.smithsnews.co.uk (http://www.smithsnews.co.uk)
Vigo Consulting Tel: +44 (0) 20 7390 0230
Jeremy Garcia / Fiona Hetherington / Anna Sutton
smithsnews@vigoconsulting.com (mailto:smithsnews@vigoconsulting.com)
About Smiths News
Smiths News is the UK's largest news wholesaler and leading provider of early
morning, end-to-end supply chain solutions. Smiths News has been delivering
newspapers to retailers across the UK for over 200 years on behalf of the
major national and regional publishers. Today, Smiths News delivers to over
22,000 customers across England and Wales on a daily basis.
Smiths News's service capability now extends into a number of new verticals
that build on its expertise in warehousing, reverse logistics and early
morning final mile services, across its extensive high-density UK delivery
network, including a waste recycling collection service, the delivery of
additional categories such as books and home entertainment, and extending our
services in the final mile.
The speed of turnaround and the density of Smiths News' coverage is critical
to one of the world's fastest physical supply chains and we remain focused on
continuing to deliver best in class service to the news and magazines market,
whilst exploring opportunities for growth based on this strong foundation.
For more information, please visit: www.smithsnews.co.uk
(http://www.smithsnews.co.uk)
Person responsible for arranging release of this announcement:
Stuart Marriner, General Counsel & Company Secretary
Smiths News plc, Rowan House, Cherry Orchard North, Kembrey Park, Swindon SN2
8UH
Email: cosec@smithsnews.co.uk (mailto:cosec@smithsnews.co.uk)
Notes
The Company uses certain performance measures for internal reporting purposes
and employee incentive arrangements. The terms 'Bank Net Cash/ (Debt)', 'free
cash flow', 'Adjusted operating profit', 'Adjusted profit before tax',
'Adjusted earnings per share' and 'Adjusted items' are not defined terms under
IFRS and therefore are Alternative Performance Measures (APM) and may not be
comparable with similar measures disclosed by other companies.
(1) The following are key APMs identified by the Company in the Group Financial
Statements as Adjusted results:
a. Adjusted operating profit - defined as operating profit excluding Adjusting
items.
b. Adjusted profit before tax (PBT) - defined as profit before tax before the
impact of Adjusting items.
c. Adjusted earnings per share - defined as Adjusted PBT, less taxation
attributable to Adjusted PBT and including any adjustment for minority
interest to result in adjusted profit after tax attributable to shareholders;
divided by the basic weighted average number of shares in issue.
d. Adjusting items - Adjusting items of income or expense are excluded in
arriving at Adjusted operating profit to present a further measure of the
Company's performance. Each adjusting item is considered to be significant in
nature and/or quantum, non-recurring in nature and/or considered to be
unrelated to the Company's ordinary activities or are consistent with items
treated as adjusting in prior periods. Excluding these items from profit
metrics provides readers with helpful additional information on the
performance of the business across periods because it is consistent with how
the business performance is planned by, and reported to, the Board and the
Executive Team. They are disclosed and described separately in Note 3 to the
consolidated financial statements to provide further understanding of the
financial performance of the Company. A reconciliation of adjusted profit to
statutory profit is presented on the income statement.
(2) Free cash flow - defined as cash flow excluding the following: payment of
dividends, the impact of acquisitions and disposals, the repayment of bank
loan principal amounts and outflows for purchases of own shares (EBT share
purchases) and cash held by the EBT.
(3) Bank Net Cash/ (Debt) - represents the net position drawn under the Company's
banking facilities and is calculated as total debt less cash and cash
equivalents. Total debt includes loans and borrowings (excluding amortised
arrangement fees and cash held by the EBT), overdrafts and obligations under
finance leases under accounting standards applicable in 2019.
Cautionary Statement
This document contains certain forward-looking statements with respect to
Smiths News plc's financial condition, its results of operations and
businesses, strategy, plans, objectives and performance. Words such as
'anticipates', 'expects', 'intends', 'plans', 'believes', 'seeks',
'estimates', 'targets', 'may', 'will', 'continue', 'project' and similar
expressions, as well as statements in the future tense, identify
forward-looking statements. These forward-looking statements are not
guarantees of Smiths News plc's future performance and relate to events and
depend on circumstances that may occur in the future and are therefore subject
to risks, uncertainties and assumptions. There are a number of factors which
could cause actual results and developments to differ materially from those
expressed or implied by such forward looking statements, including, among
others the enactment of legislation or regulation that may impose costs or
restrict activities; the re-negotiation of contracts or licences; fluctuations
in demand and pricing in the industry; fluctuations in exchange controls;
changes in government policy and taxations; industrial disputes; war and
terrorism. These forward-looking statements speak only as at the date of this
document. Unless otherwise required by applicable law, regulation or
accounting standard, Smiths News plc undertakes no responsibility to publicly
update any of its forward- looking statements whether as a result of new
information, future developments or otherwise. Nothing in this document should
be construed as a profit forecast or profit estimate. This document may
contain earnings enhancement statements which are not intended to be profit
forecasts and so should not be interpreted to mean that earnings per share
will necessarily be greater than those for the relevant preceding financial
period. The financial information referenced in this document does not contain
sufficient detail to allow a full understanding of the results of Smiths News
plc. For more detailed information, please see Preliminary Financial Results
and/or the Annual Report and Accounts, each for the 52-week period ended 30
August 2025 which can each be found on the Investor Zone section of the Smiths
News plc website - www.smithsnews.co.uk. However, the contents of Smiths News
plc's website are not incorporated into and do not form part of this document.
OPERATING REVIEW
Overview of performance
The Company delivered a strong performance in FY2025, with the news and
magazines business performing well, alongside significant demand and proactive
trading in the collectables market.
The Company generated adjusted operating profit of £39.1m (FY2024: £39.1m),
ahead of market expectations and ahead of FY2024 by £0.9m on a 52-week
basis*. Company revenues, reflecting the long-term volume decline in the
newspaper and magazines market, were £1,064.0m (FY2024: £1,103.7m /
£1,082.9m on a 52-week basis), in line with internal forecasts. Revenues from
new verticals increased 16%.
Adjusted profit after tax was £27.0m (FY2024: £24.7m), an increase of
£2.3m, with net finance costs £2.6m lower than FY2024. The Company's cost
out programme continues to perform in line with expectations, delivering
£4.9m of annualised savings in FY2025 (FY2024: £5.6m). The Company ended the
year in a Bank net cash position of £3.3m of (FY2024: Bank net debt of
£11.0m). Adjusted EPS increased 0.8 pence to 11.1 pence (FY2024: 10.3p).
The Company's free cash flow improved to £36.1m (FY2024: £7.3m / £23.0m
52-week basis*), in part due to the receipt of £6.9m of one-off items, which
included the final instalments from the administrators of McColl's, taking the
total payments received from the administrators to £5.4m, 98% of the total
stated debt balance.
Smiths News continues to implement its ongoing programme of internal
investment, increasing investment by £2.0m per annum through to FY2027, to
support delivery of the Company's core capabilities.
Over the course of FY2025, the Company has continued to focus on maintaining
shareholder returns whilst simultaneously developing additional revenue
streams for the business that leverage the Company's existing network and
expertise to drive long-term value creation and mitigate the long-established
and gradual decline of newspaper and magazine volumes.
Smiths News is an established expert in early morning supply chain management,
and the Company's strategy remains to build on these foundations to expand its
services across additional verticals including end-to-end services and final
mile logistics.
The Company continues to apply the capital allocation policy which was updated
following refinancing in May 2024. With higher profit after tax, the proposed
total ordinary dividend increased 8% to 5.55p (FY2024: 5.15p) being 2x cover.
A special dividend of 3.0p (FY2024: 2.0p) is also proposed, taking total
distributions to 8.55p (FY2024: 7.15p).
* The impact of the 53rd week in FY2024 was additional revenue of £20.8m,
additional adjusted operating profit of £0.9m and a net cash outflow of
£15.7m.
News and magazines business
The news and magazines business delivered a pleasing performance in FY2025 and
continues to generate the majority of Smiths News' revenue and profits.
Against a backdrop of long-term market decline - which continues to be in line
with internal expectations - the Company is working closely with retailers to
maximise commercial opportunities across the category, alongside a focus on
continual improvement to our customer proposition.
The collectables market, which has a separate demand cycle to newspapers and
magazines, delivered an excellent performance in FY2025. Recognising this
growth, the Company made a deliberate decision to focus efforts on these
margin accretive products during the year in order to capitalise on momentum.
Whilst some sales are non-repeatable, the Company believes the strength of the
collectables market will continue into FY2026, supported by the 30(th)
anniversary of Pokémon and the 2026 Men's Football World Cup.
New verticals
We continue to develop a number of initiatives as part of the Company's
strategic vision to diversify the business and broaden revenue and profit
streams through opportunities that complement our established news and
magazines operations, and these initiatives continue to evolve.
Our growth verticals continue to build, producing a 16% increase in revenues.
Profit was £1.4m (FY2024: £2.0m), reflecting planned investments, including
trials, capability and capacity.
Within recycling, we see good demand from our existing newspaper and magazines
customers, with volumes having increased by 49% to over 2,500 tonnes in the
last 12 months, a key performance metric.
We welcomed Adam Wylie as Managing Director of Recycling at the end of FY2025.
Adam brings a wealth of highly applicable industry experience and is already
delivering valuable market intelligence to inform new market opportunities,
including the use of partnerships and waste brokers.
In FY2025, we undertook a trial seeking to extend our recycling services to
new customers along selected existing delivery routes in the Northwest. The
trial has now concluded and provided the Company with valuable insights into
the market dynamics, alongside the most efficient routes to market. Adam is
now leading the development of our strategy, targeting scaled retailers where
adoption is supported by both the recently introduced workplace recycling
regulations 1 (#_ftn1) , and the expected introduction of future
regulation 2 (#_ftn2) . With an extended footprint, Smiths News is in a
strong position moving into FY2026 to leverage its network to deliver its
recycling services.
Our second key vertical focuses on the delivery of additional categories to
existing customers, such as books and home entertainment. Smiths News already
delivers to a number of customers in this vertical, including leading
supermarkets and high street retailers. In February 2025, the Company
commenced a trial with leading greetings cards brand Hallmark, and the
offering is now live across circa 175 stores with over 63,000 cards sold in
FY2025.
In the final mile services vertical, where we are specifically focused on
delivering new products to new customers and locations, the small-scale trial
for the delivery of specialist engineering and manufacturing parts was well
received. Further to the trial, the Company was invited to tender for, and has
now been awarded, a multi-year contract to undertake "in-night" deliveries.
Internal investment programme
As previously announced, Smiths News commenced a three-year internal
investment programme in FY2025, increasing investment by £2.0m per annum
through to FY2027. Thereafter, investment is expected to revert to a
normalised level of £4.0m per annum.
The programme seeks to optimise warehouse operations and enhance existing
capabilities and efficiencies, without disrupting service to the Company's
existing customers.
We successfully implemented a new warehouse management system at one of our
key regional hubs in the Period and put the foundations in place for a new
transport management system, with initial implementation expected in FY2026.
Smiths News has simultaneously invested in its team, ensuring the Company has
the skillset and talent to support the news and magazines business and to
drive our new verticals. As noted above, at the end of FY2025, we welcomed a
new Managing Director of Recycling and have continued to add skills in the
wider management team. This investment ensures the business is well-positioned
to capitalise on the opportunities available across all four verticals.
Operational efficiencies
Smiths News continues to identify operational efficiencies to optimise our
network and services. The Company maintained the year-on-year delivery of cost
savings despite the challenge of rising wages, delivering £4.9m in the Period
(FY2024: £5.6m), focused on driving efficiencies in the business,
streamlining operations, and reducing variable costs associated with volume
declines.
Cash position
Cash generation - a core foundation of the Smiths News business model -
remained positive in FY2025, with free cash flow at £36.1m (FY2024: £7.3m,
£23.0m on a 52-week basis*), including the benefit of £6.9m one-off receipts
in the year, being £5.4m from the McColls administrator and a £1.5m tax
refund in respect of the return of surplus from the Smiths News pension
scheme.
The £5.4m receipts from the administrators of McColl's, comprised £1.6m in
H1 2025, a second payment of £1.7m, and a final payment of £2.0m, both
received in H2 2025. This took the total payments received from the
administrators to 98% of the original debt balance.
Average Bank net cash of £3.3m was achieved in the Period (FY2024: average
Bank net debt of £11.7m), and closing Bank net cash improved to £3.3m
(FY2024: £11.0m Bank net debt).
People
In January 2025, we welcomed Manju Malhotra as an independent non-executive
director, replacing Denise Collis who retired from the Board at the conclusion
of the AGM in January 2025. In March 2025, Paul Baker announced his intention
to step down from his role as Chief Financial Officer, with Richard Clay
joining the business in February 2026 to assume the role. George Cooper,
currently Group Financial Controller at the Company, will assume the role of
Interim Chief Financial Officer (a non-board appointment) to cover the period
between Paul's departure and Richard's arrival.
We wish to take this opportunity to thank both Denise and Paul for their
outstanding contribution to Smiths News. We are extremely grateful for the
dedication and insights they have provided the business, and we wish them
every success going forward.
We would also like to thank all our colleagues at Smiths News for their
ongoing commitment to delivering first class customer service in an intense
and time critical market. We remain committed to investing in our staff, and
in creating a positive and inclusive culture that supports employees and
enables our team to thrive.
Dividend
Further to a strong financial and cash generative performance, and in line
with our capital allocation policy, the Company proposes to pay a final
ordinary dividend of 3.80 pence per share on 5 February 2026 (FY2024: 3.40
pence per share) to shareholders on the register at close of business on 9
January 2026, which will bring the total proposed dividend for the year to
5.55 pence per share. The ex-dividend date will be 8 January 2026.
Additionally, the Company proposes to pay a special dividend of 3.0 pence per
share, to be paid alongside the final ordinary dividend on 5 February 2026, to
shareholders on the register at close of business on 9 January 2026.
Outlook
We have seen the positive momentum from FY2025 continue into FY2026, with the
news and magazines business remaining resilient alongside ongoing strength in
our collectables activities. In addition, we continue to refine our strategic
focus to better utilise our early morning market expertise.
We remain committed to further extending our operational footprint into new
verticals by leveraging our early morning, end-to-end supply chain solutions
and utilising our high-density network and unrivalled experience and skillset.
The Company has delivered a good start to trading in the current financial
year and expects to deliver results in line with current market expectations*.
FINANCIAL REVIEW
Overview
In FY2025 the Company traded ahead of expectation, maintaining adjusted
operating profit at £39.1m and increasing adjusted profit after tax to
£27.0m despite one week less trading in the reporting period. This has led to
an 8% increase in the ordinary dividend, paid at 2x cover in line with the
Company's capital allocation policy. The Company continues to demonstrate good
cash generation, augmented this year by additional one-off receipts of £6.9m,
including £5.4m from the McColls administrator, which support the proposal of
a 3.0p (£7.3m) special dividend, compared to 2.0p (£4.8m) in FY2024.
The Company's financial results in FY2025 represented 52 weeks of trading,
compared to 53 weeks in FY2024. The additional week benefitted revenue in
FY2024 by £20.8m (1.9%) and adjusted operating profit by £0.9m and did not
include any significant one-off items.
Revenues of £1,064.0m (FY2024: £1,103.7m), were down 3.6% on the prior year,
of which 1.9% related to the 53(rd) week. The remaining movement excluding the
53(rd) week of -1.7% was below the historic trend of -3% to -5%. Additional
sales of collectables in FY2025 more than offset revenues made in FY2024 from
the Men's UEFA Football Championships, while the decline in revenue from
newspapers and magazines was within with our long-term guidance of -3% to -5%.
Adjusted operating profit of £39.1m was an increase of £0.9m excluding the
impact of the 53(rd) week with beneficial margin mix and continuing operation
cost focus driving improved performance.
Adjusted profit after tax increased by £2.3m to £27.0m with lower debt
levels and banking fees reducing net interest cost (£2.6m lower) and a lower
effective tax rate owing to the successful resolution of overpayments made in
previous tax years. Consequently, Adjusted EPS increased by 0.8p to 11.1p and
this has resulted in a total ordinary dividend of 5.55p for the year in line
with the Company's capital allocation policy.
Adjusting items after tax were a credit of £1.3m (FY2024 credit of £0.8m)
and included a release of the provision for McColls receivables (FY2025:
£3.7m; FY2024: £0.6m), as well as legal expenses of £0.7m and technology
programme improvement costs of £0.7m.
Free cash flow of £36.1m (FY2025: £7.3m) included a working capital inflow
(£4.1m) compared to an outflow in FY2024 (£17.0m), both the result of timing
differences in the Company's normal working capital cycle. Excluding these
movements, the FY2025 cash flow of £32.0m was higher than FY2024 £24.3m due
to lower interest costs and higher income from adjusting items (FY2025: £5.1m
inflow, FY2024: £0.4m outflow) which included £5.4m of cash recovered from
the McColls administrator and £1.5m tax refund in respect of the return of
surplus of the Smiths News pension scheme which occurred in FY2022.
Bank net debt improved by £14.3m from £11.0m (debt) in FY2024 to £3.3m
(cash) in FY2025, the first time the Company has reported a net cash position
but noting the working capital timing benefit of £4.1m during the year.
A final ordinary dividend of 3.8p per share (£9.2m) is proposed by the Board,
which makes a total full year ordinary dividend of 5.55p (£13.5m) an 8%
increase compared to 5.15p in FY2024 (£12.5m). A special dividend of 3.0p
(£7.3m) compared to 2.0p in FY2024 (£4.8m), is also proposed to be paid
alongside the final ordinary dividend in February 2026 reflecting the
distribution of one-off items received during the year.
Adjusted results
Group
£m 52 weeks to 53 weeks to Change 52-week basis
30 Aug 2025 31 Aug 2024
Revenue 1,064.0 1,103.7 (3.6%) (1.7%)
Operating profit 39.1 39.1 - 2.4%
Net finance costs (3.3) (5.9) 44.1%
Profit before tax 35.8 33.2 7.8%
Taxation (8.8) (8.5) (3.5%)
Effective tax rate 24.6% 25.6% (100bps)
Profit after tax 27.0 24.7 9.3%
Revenue
Revenue was £1,064.0m (FY2024: £1,103.7m), down 3.6%, but 1.7% excluding the
impact of the 53(rd) week in FY2024. Lower newspaper and magazines volumes
were offset by the benefits of News UK and Midlands News Association contract
wins (Q2 FY2024), cover price increases, increased sales of trading card and
sticker collectables and increased revenue from new verticals.
Newspaper revenue decreased by 3.1% excluding the impact of the 53(rd) week
and the annualisation of FY2024 contract wins. Magazine revenue was down 4%
excluding the 53(rd) week. Both newspapers and magazine revenue decline rates
are within our long-term expectation of -3% to -5%.
Revenue from collectables increased by 17% excluding the 53(rd) week, with
good Premier League and Champions League football collections and the
popularity of the current Pokémon series. The success of these ranges more
than offset the year-on-year impact of the men's UEFA European Championships
which benefitted FY2024.
Operating profit
Adjusted operating profit £39.1m was the same as FY2024 (£39.1m) and
included the following items:
· A 53(rd) week of trading in FY2024 (£0.9m) compared to 52 weeks in FY2025
· Improved contribution from sales of collectable products (£2.5m) and in
particular Pokémon, which included the benefit of £1.2m of one-off stock
sales
· The net benefit of cost reduction plans within depot and overheads (£4.9m),
which largely offset increases to the cost base driven by inflation (£4.5m)
and the impact of changes to National Insurance Contributions (£0.5m)
· Additional technology costs (£0.7m) including license fees for newly
implemented technology
· The impact of other costs (£0.8m) including £0.4m in trials for new services
and products
Profit after tax
Net finance charges of £3.3m (FY2024: £5.9m) were driven by a lower net
debt, lower interest rates and the write-off of unamortised fees in FY2024
relating to the previous financing facility. Taxation of £8.8m (FY2024:
£8.5m) was higher than the prior period due to higher profit before tax.
Profit after tax of £27.0m (FY2024: £24.7m) was £2.3m higher than last year
and has driven an increase in the ordinary dividend, in line with the
Company's capital allocation policy.
Statutory Results
Group
£m 52 weeks to 53 weeks to Change
30 Aug 2025 31 Aug 2024
Revenue 1,064.0 1,103.7 (3.6%)
Operating profit 41.2 40.0 3.0%
Net finance costs (3.3) (5.9) 44.1%
Profit before tax 37.9 34.1 11.1%
Taxation (9.6) (8.6) (11.6%)
Effective tax rate 25.3% 25.2% 10bps
Profit after tax 28.3 25.5 11.0%
Statutory profit after tax of £28.3m was a £2.8m increase on the prior year
(FY2024: £25.5m), resulting from the £2.3m increase in Adjusted profit after
tax described above and a £0.5m higher benefit from adjusting items (FY2025
£1.3m credit; FY2024: £0.8m credit).
Earnings per share
Adjusted Statutory
52 weeks to 53 weeks to 52 weeks to 53 weeks to
30 Aug 2025
31 Aug 2024
30 Aug 2025
31 Aug 2024
Earnings attributable to ordinary shareholders (£m) 27.0 24.7 28.3 25.5
Basic weighted average number of shares (millions) 242.4 240.3 242.4 240.3
Basic Earnings per share 11.1 10.3 11.7 10.6
Diluted weighted number of shares (millions) 250.2 251.1 250.2 251.1
Diluted Earnings per share 10.8 9.8 11.3 10.2
Adjusted basic earnings per share of 11.1p, was an increase of 0.8p on the
prior year driven by the increase in earnings of the business, offset by an
increase in the average number of shares as a result of the employee benefit
trust holding fewer shares.
Statutory basic earnings per share increased by 1.1p to 11.7p (FY2024: 10.6p)
due to the benefit of adjusting items.
Dividends
52 weeks to 53 weeks to
30 Aug 2025 31 Aug 2024
Dividend per share (proposed) 8.55p 7.15p
Dividend per share (paid and recognised) 7.15p 4.50p
The Board is proposing a final ordinary dividend of 3.80p per share (FY2024:
3.40p per share). The proposed final dividend is subject to approval by
shareholders at the Annual General Meeting on 29 January 2026 and has not been
included as a liability in these accounts. The Board is also proposing a
special dividend of 3.0p per share. These dividend recommendations follow the
capital allocation policy which was revised following the Company's
refinancing in May 2024.
The proposed dividends will each be paid on 5 February 2026 to shareholders on
the register at close of business on 9 January 2026. The ex-dividend date will
be 8 January 2026.
Adjusting items
£m 52 weeks to 53 weeks to
30 Aug 2025 31 Aug 2024
Tuffnells (costs)/credits (0.8) 0.2
Technology transformation costs (0.7) (0.1)
Network and reorganisation costs (0.1) (0.1)
Impairment reversal in investment in joint ventures - 0.3
Impairment reversal on receivables - McColl's 3.7 0.6
Total before tax 2.1 0.9
Taxation (0.8) (0.1)
Total after taxation 1.3 0.8
Adjusting items after tax was a net credit of £1.3m, compared to a net credit
of £0.8m in the prior year period, both periods including a release of the
provision for McColls receivables originally made in FY2022.
Tuffnells costs of £0.8m arose from professional fees incurred in responding
to information requests from the Pensions Regulator in respect of its
investigation into the Tuffnells defined benefit pension scheme (£0.7m), and
an increase in provisions to settle insurance claims (£0.1m). Technology
transformation costs of £0.7m related to enhancements made to technology
infrastructure, and £0.1m of costs arose from simplifying the Group
structure. The Company also recognised a £3.7m impairment reversal of the
provision for McColl's receivables following final recoveries from the
administrator. In total, the Company received £5.4m from the administrator,
being 98% of the £5.5m receivable which was owing at the point of McColls
administration. Of the initial provision of £4.4m, £4.3m has therefore been
released (£0.6m in FY2024 and £3.7m in FY2025).
In the prior period, the Company also reversed the remaining impairment held
on the Rascal joint venture of £0.3m and released insurance provisions made
following Tuffnells entering into administration of £0.2m. These credits were
partially offset by £0.1m of reorganisation costs in relation to simplifying
the Group structure and £0.1m in respect of technology transformation costs.
Further information on these items can be found in Note 3 to the Group
Financial Statements. Adjusting items are defined in the Glossary to the Group
Financial Statements and present a further measure of the Company's
performance. Excluding these items from profit metrics provides readers with
helpful additional information on the performance of the business across
periods because it is consistent with how the business performance is planned
by, and reported to, the Board and the Executive Team. Alternative Performance
Measures (APMs) should be considered in addition to, and are not intended to
be a substitute for, or superior to, IFRS measurements.
Free cash flow
£m 52 weeks to 53 weeks to
30 Aug 2025 31 Aug 2024
Adjusted operating profit 39.1 39.1
Depreciation and amortisation 9.5 8.5
Adjusted EBITDA 48.6 47.6
Working capital movements 4.1 (17.0)
Capital expenditure (4.5) (4.4)
Lease payments (6.5) (5.9)
Net interest and fees (3.2) (5.0)
Taxation (8.8) (8.5)
Other 1.3 0.9
Free cash flow (excluding Adjusting items) 31.0 7.7
Adjusting items (cash effect) 5.1 (0.4)
Free cash flow 36.1 7.3
Free cash flow of £36.1m (FY2024: £7.3m) was £28.8m higher than last year
in part due to the impact of the 53(rd) week in FY2024, which was a net
outflow of £15.7m and the benefit of £5.1m of adjusting items in FY2025
which included £5.4m of cash received from the McColls administrator.
There was a working capital inflow of £4.1m in FY2025 and an outflow of
£17.0m in FY2024. The FY2025 inflow arose from increased collectables trading
in the second half of the year, while the FY2024 outflow related to payments
made to publishers in the 53(rd) week and part of the Company's normal working
capital cycle at the end of the calendar month.
Capital expenditure in the period was £4.5m (FY2024: £4.4m), an increase of
£0.1m and including £1.2m of spend relating to the Company's three-year
investment programme.
Lease payments of £6.5m (FY2024: £5.9m) increased by £0.6m, driven by rent
renewals.
Net interest and fees of £3.2m (FY2024: £5.0m) decreased by £1.8m, due to
lower net debt.
Cash tax outflow of £8.8m (FY2024: £8.5m) was an increase on the prior
period of £0.3m, owing to higher levels of profit.
Other items include non-cash share-based payment expense.
The total cash impact of other Adjusting items was a net inflow of £5.1m
(FY2024: outflow of £0.4m).
In the current period, there were two significant inflows; £5.4m was received
from the McColls administrators, and a £1.5m tax refund in respect of the
return of surplus of the Smiths News pension scheme which occurred in FY2022.
Offsetting these items were £0.8m of professional fees in respect of the
Pensions Regulator's investigation into the Tuffnells pension scheme, £0.7m
relating to technology investments, £0.2m settlement of Tuffnells insurance
claims and reorganisation costs of £0.1m.
In the prior period, the outflow of £0.4m resulted from the £0.2m settlement
of Tuffnells insurance claims, technology investment of £0.1m, and
reorganisation costs of £0.1m.
A reconciliation of free cash flow to the net movement in cash and cash
equivalents is given in the Glossary.
Net cash/debt
£m As at As at
30 August 2025 31 August 2024
Opening Bank Net Debt (11.0) (4.2)
Free cash flow 36.1 7.3
Dividend paid (17.4) (10.8)
Purchase of shares and cash held by employee benefit trust (4.4) (3.3)
Closing Bank Net Cash/(Debt) 3.3 (11.0)
Bank net cash closed the year at £3.3m compared to Bank net debt of £11.0m
at 31 August 2024, an improvement of £14.3m.
Average daily bank net debt moved from £11.7m (net debt) in the prior period
to average Bank net cash of £3.3m in the current period, reflecting good
ongoing cash generation and benefitting from increased collectables trading
within the working capital cycle.
Total dividends paid during the year amounted to £17.4m (FY2024: £10.8m), an
increase of £6.6m. The FY2024 final ordinary dividend of £8.3m was paid in
February 2025 (FY2024: £6.7m), alongside a special dividend of £4.9m,
bringing the total dividend paid in respect of FY2024 to £17.4m. The Company
also paid an interim ordinary dividend in July 2025 of £4.2m (FY2024:
£4.2m).
Reported net debt is impacted by the timing of the Company's working capital
cycle. The intra-month working capital cash flow cycle generates a routine and
predictable cash swing within the overall bank facility of £40.0m (FY2024:
£40.0m) at the period end. This results in a predictable fluctuation of net
debt during the month compared to the closing net debt position.
The Company's Bank net cash: Bank EBITDA ratio improved to -0.1x (FY2024: Debt
ratio of +0.3x) which is within our main leverage covenant ratio of +2.5x. We
remain within all our other bank covenant tests at period end.
A reconciliation of Bank net debt (which excludes IFRS 16 lease liabilities
and unamortised arrangement fees) to the balance sheet and Bank EBITDA (which
uses pre-IFRS16 lease accounting) to the profit and loss account is provided
in the Glossary.
PRINCIPAL AND EMERGING RISKS
Principal Risks
During FY2025 the Board and Audit Committee each continued to undertake an
ongoing assessment of the principal and emerging risks, the Board having
considered the performance of the business, its markets, the changing
regulatory and macroeconomic landscape, the Company's future strategic
direction and ambition as well as the heightened climate-related risk
environment. In addition, in evaluating the Company's risk management and
internal control processes, the Audit Committee has considered both internal
and external audit reports and received confirmation from management that the
Company's control frameworks have operated satisfactorily. The sustainable
development risks considered throughout our business have been reviewed by the
Sustainability Committee. The directors are therefore of the view that they
have carried out a robust assessment of the Company's emerging and principal
risks, including those that could threaten its business model, future
performance, solvency or liquidity.
Emerging Risks
Emerging risks are identified as either a new or previously unforeseen risk
that we are now adding to our risk registers or a risk that was already on our
radar and which has the potential to become a principal risk. Most risks
identified as emerging are already reflected on our functional risk registers
with a current risk rating of 'serious likelihood' or above. The Board has
noted that in the execution of its growth and diversification strategy, new
emerging risks have been identified. These emerging risks are managed through
mitigating activities, such that the residual risk exposure is not considered
significant. All new initiatives are planned in detail, with contingency and
BCP plans in place and ongoing reviews conducted to evaluate the project
execution against the original plan and to identify lessons learnt. We will
continue to monitor potential risks relating to our growth and diversification
strategy in the year ahead.
Key Changes in the Year
In line with our usual procedures, a refresh of the Company's principal and
emerging risks was conducted at the half and full year, taking into account
changes in our business practices, our industry sector, the development of our
three growth verticals and any other market changes across our business and
industry sector, together with the increasing relevance of climate-related
risks and cyber security incidents across all sectors and industries (in
relation to the former, considering both transitional and physical-related
risks to both our business and through our supply chain). This broad review
was conducted through discussion with a cross-section of the Executive
Leadership Team, senior management and the Audit Committee, who were each
asked to consider the key risks (both in place and emerging) and the
challenges facing the business (by reference to the existing principal risks),
our current activities and controls that help address these risks, and future
actions that may be taken to further mitigate these risks (where appropriate).
The opportunity to review and refresh the Company's principal and emerging
risks has resulted in all but one of our identified principal risks remaining
stable, with a reduction in the acquisition and retention of labour risk in
light of vacancies (internally and amongst the outsourced final mile delivery
contractors) having stabilised at a consistently lower level each month and
our colleague turnover comparing favourably versus our sector. Following
this review, there remains a general alignment around the nature of risks, the
risk ownership, the direction of travel, any mitigation actions to reduce the
gross risk, and acceptance of remaining net risk.
In light of the above, we have therefore been able to maintain a stable number
of principal risks but with a reduction in the number of emerging risks
identified by the Board given that those events previously identified as
emerging were, in fact, already broadly under review either as part of another
principal or emerging risk.
The table below details each principal business risk, those aspects that would
be impacted were the risk to materialise, our assessment of the current status
of the risk and how each is mitigated.
Principal risks and potential impact Mitigations Strategic link/ change
1. Cyber security
Global trends demonstrate a continued high volume of cyber-attacks against all · Defined risk-based approach to the information security roadmap Strategic link:
industry sectors and that cyber threats continue to indiscriminately evolve. and technology strategy which is aligned to the strategic plans.
Technology
To meet the needs of our stakeholders, our IT infrastructure and data · Regular tracking of key programmes against spend targets and
processes need to be flexible, reliable and secure from cyber attacks. delivery dates.
Secure infrastructure acts as a deterrent to, and helps prevent and/or · The Company assesses cyber risk on a day-to-day basis, using Change:
mitigate the impact of, external cyber-attack, internal threat or proactive and reactive information security controls to detect and mitigate
supplier-related breach, which could cause service interruption and/or the common threats. Stable - despite ongoing investment and enhancements in the Company's IT
loss of Company and customer data.
infrastructure and IT security - the backdrop remains heightened, leading to
· Dedicated investments in information security and access to stable risk assessment.
Cyber incidents could lead to major adverse customer, financial, reputational third-party cyber security experts, including 24/7 security monitoring,
and regulatory impacts. advanced AI-driven threat detection and managed incident response, endpoint
protection platforms and specialist testing.
· The Company encourages a cyber-aware culture by undertaking
exercises, such as computer-based training and simulated phishing attacks and
regular communications about specific cyber threats.
· All functions that place reliance on business systems have
established business continuity plans that set out how to conduct key
activities if a system interruption takes place due to a disruptive event such
as a cyber-attack.
2. Macro-economic uncertainty
Deterioration in the macro-economic environment could result in supply-side · Annual budgets and forecasts take into account the current Strategic link:
cost inflation and/or a reduction in demand-side sales volumes. macro-economic environment to set expectations internally and externally,
allowing for, or changing, objectives to meet short- and medium-term financial Cost and efficiencies, Operations
Supply-side macro-economic pressures could present the Company with additional targets.
cost challenges, e.g. increased competition in the distribution labour market
and/or rises in fuel and utility prices. Adverse changes to economic · Weekly cost monitoring enables oversight and action on a timely
conditions could result in reduced consumer demand for newspapers and basis. Change:
magazines and/or reduction in titles/editions. These cost increases and sales
pressures present a risk when they cannot be fully mitigated through increased · Cover price increases in magazine and newspaper titles provide Stable - whilst the UK economy has grown in 2025, inflation remains above the
prices or other productivity gains. some offset against the impact of volume decline. Bank of England's target range. Increases in the National Living Wage continue
to match or exceed inflation. Employers' national insurance contributions
This could result in deterioration in the level of profitability in both the · Predictable level of volume decline within the core business increased in April 2025 and have added to the Company's cost base. The
short and medium term and impacts on the Company's ability to execute its enables cost optimisation planning. tightening of standards pursuant to the Employment Rights Bill is expected to
strategies, including level of debt and liquidity objectives.
create further cost pressures.
· Use of fixed-term contracts as a hedge against rapidly rising
prices e.g. energy costs.
· The Company continues to be significantly cash generating to
support its strategic priorities.
3. Changes to retailers' commercial environment
Our largest retailers (e.g. grocers and symbol group members) remain under · Our EPoS-based returns (EBR) solution has been introduced Strategic link:
significant pressure to maximise sales and profitability by channel within in-store with our largest retailers, improving staff efficiency in managing
their retail stores and at associated sale outlets, such as at petrol the magazine category, thereby reducing cost to the retailer. Cost and efficiencies
forecourt stores. This could result at any time in a category review of the
newspaper and/or magazine channel, leading to a significant reduction in · Potential to extend EBR to newspapers in order to broaden
newspapers' and/or magazines' selling space-in-store (or its location) in efficiency-benefits to retailers.
favour of other higher margin products and/or the delisting of all/particular
Change:
titles of newspapers and/or magazines. · Supply-side shrink activities underway and renewed focus improve
channel profitability and reduce complexity associated with the category. Stable
A reduction in (or change in location of) sales space and/or full delisting of
newspapers and/or magazines by our largest retailers (or a high number of · Form stronger partnerships with emerging retailers to stock
other retailers) could materially reduce the Company's revenue, profitability magazines and newspapers.
and cash flow.
· Expand retail offering to include single copy digital downloads
of newspapers and/or magazines to supplement physical print and category range
in-store.
4. Acquisition and retention of labour
Due to competition and constraints in the current distribution labour market, · We seek to offer market competitive terms to ensure talent Strategic link:
this could lead to an increased risk of being unable to recruit and/or retain remains engaged.
warehouse colleagues and support staff.
People first,
· We offer long-term contracts with our sub-contracted delivery
The same pressures are also being felt in sourcing and retaining delivery partners. Culture and values,
sub-contractors as well as filling in-house roles within our central support
functions. · We use a variety of platforms to recruit employees and Cost and efficiencies
contractors.
A failure to maintain an appropriate level of resourcing could result in
increased costs, employee disengagement and/or loss of management focus which · The level of vacancies across warehouse and delivery contractors
underpin our ability to address the strategic priorities and to deliver is monitored daily. Change:
forecasted performance.
· We undertake workforce planning; performance, talent and Reducing - vacancies have stabilised at a consistently lower level each month
succession initiatives; learning and development programmes; and promote the and our colleague turnover compares favourably with our sector. Retention
Company's culture and core values. challenges remain for specific job roles which are managed through agile and
bespoke responses.
· Retention plans are reviewed to address key risk areas, and
attrition across the business is regularly monitored.
· Regular surveys are undertaken to monitor the engagement of
colleagues.
5. Execution risk within the 3 growth verticals
A successful growth and diversification strategy is essential to the long-term · Strong project management and governance in place to sign-off new Strategic link:
success of the Company. vertical activities and oversee their implementation.
Cost and efficiencies
Implementing new business opportunities in order to grow the Company's revenue · A Growth Business Development Group and Growth Operations
and profit streams carries an execution risk to achieving our vision and Delivery Steering Committee have been established to review and control new
purpose. business opportunities and then plan and measure the impact of these
opportunities on core operations. Change:
· Experimentation through trials of new business opportunities has Stable - our growth verticals' initiatives are expected to become a more
been deployed to assess the demand and potential economic benefit of such significant part of our business over time, leading to space and capacity
opportunities. constraints at both our sites and in our vehicles potentially increasing. In
addition, layering in of change projects such as our investment in a Warehouse
· The Executive Leadership Team's balanced scorecard of key Management System and the Operational Excellence programme may create
performance indicators ensures sub-optimal performance is tracked and management bandwidth and operational pressures in the short-term before
monitored on a regular basis and allows appropriate interventions to be made. improvements become evident.
6. Sustainability and climate change - for details of all Sustainability and
climate-related risks please refer also to the Sustainability Report in the
Annual Report for 2025.
Our sustainability linked risks extend beyond the physical and transitional · Board Sustainability Committee established (Chaired by the Chief Strategic link:
risks associated with climate change which we have previously identified, such Financial Officer) to consider and determine the Company's sustainability
as a scarcity of resources, extreme weather events, power outages, increasing strategy and progress, together with risk environment and activities and Cost and efficiencies,
regulation and associated cost in response to a drive to 'net zero' carbon actions.
emissions and the increasingly stringent air quality emission zones.
Operations,
Regulatory requirements and reporting obligations on environmental, social and · Dedicated management Sustainability Steering Committee
governance (ESG) matters are increasing and ongoing investment is required to established (also chaired by the Chief Financial Officer) coordinates the Sustainability
maintain a safe working environment and to protect the Company from Company's day-to-day activities and actions in delivering the Company's
cyber-attacks, as well as making progress in delivering on our diversity and sustainability strategy, including in relation to climate change.
inclusion ambitions. In common with all major organisations, there is a risk
of reputational damage and/or loss of revenue if the Company fails to meet · Working with suppliers to ensure they share the Company's vision Change:
stakeholder expectations across our sustainability framework. to act on sustainability and climate change.
Stable
· Emissions and air quality targets in UK towns and cities are
monitored by a central team in the Operations function which ensures the
Company can fulfil its obligations to customers and remain compliant with
legal requirements.
· Operational sites are reviewed for their resilience to extreme
weather events, such as flooding, with upgrades and interventions made where
these are cost-effective. Depots are relocated to new sites (e.g. during lease
break windows) where this represents a better option than adapting an existing
location.
7. Major newspaper titles exit the market or move to digital-only editions
Significant decline in advertising and/or circulation, together with rising · We seek to ensure full availability of alternative newspaper Strategic link:
production costs, could lead to one or more national newspaper titles exiting titles to maximise substitution opportunities for customers.
the market and/or publications being taken fully digital. This could lead to a
Cost and efficiencies,
significant deterioration in the Company's profitability and cash flow in both · Partial mitigation against newspaper title closures is built into
the short and medium term as well as impacting on its ability to execute its our contracts with major publishers.
strategies.
· Ongoing successful execution of our growth and diversification Change:
strategy provides longer-term mitigation through alternative profitable
revenue streams. Stable
8. Legal and regulatory compliance
The Company is required to be compliant with all applicable laws and · Changes in laws and regulations are monitored, with policies and Strategic link:
regulations. Failure to adhere to these could result in financial penalties, procedures being updated as required.
third party redress, and/or reputational damage.
Technology, Sustainability, Operations
· Business-wide mandatory training programmes for higher-risk
Key areas of legal and regulatory compliance include: regulatory areas.
· GDPR · External experts are used where applicable. Change:
· Health and Safety · All major policies are reviewed by the Board or Audit Committee Stable
on an annual basis.
· Tax compliance
· Operational auditing and monitoring systems for higher risk
· Environmental legislation areas.
· Employment law
The Audit Committee believes that it has been able to respond quickly and
efficiently to the ever-evolving risk environment that the business regularly
faces head on and have deployed effective risk management processes across the
Company. Accordingly, the Audit Committee is satisfied (on behalf of the
Board) that it has carried out a robust assessment of the principal and
emerging risks that the Company faces (within the scope of the Board's risk
appetite) as required by the 2018 edition of the UK Corporate Governance Code.
GROUP FINANCIAL STATEMENTS
Group Income Statement
for the 52-week period ended 30 August 2025
£m 52-week period ended 53-week period ended
30 August 2025 31 August 2024
Note Adjusted* Adjusting Total Adjusted* Adjusting items Total
items
Revenue 2 1,064.0 - 1,064.0 1,103.7 - 1,103.7
Cost of sales 2 (988.9) - (988.9) (1,030.5) - (1,030.5)
Gross profit 75.1 - 75.1 73.2 - 73.2
Administrative expenses (35.8) (1.6) (37.4) (33.8) - (33.8)
Net impairment (loss)/reversal on trade receivables 13 (0.1) 3.7 3.6 (0.1) 0.6 0.5
Losses from equity accounted joint ventures 11 (0.1) - (0.1) (0.2) - (0.2)
Impairment reversal of joint venture investment 11 - - - - 0.3 0.3
Operating profit 39.1 2.1 41.2 39.1 0.9 40.0
Finance costs 5 (3.6) - (3.6) (6.3) - (6.3)
Finance income 5 0.3 - 0.3 0.4 - 0.4
Profit before tax 35.8 2.1 37.9 33.2 0.9 34.1
Income tax expense 6 (8.8) (0.8) (9.6) (8.5) (0.1) (8.6)
Profit for the period attributable to equity shareholders 27.0 1.3 28.3 24.7 0.8 25.5
Earnings per share Pence Pence
Basic 8 11.7 10.6
Diluted 8 11.3 10.2
*This measure is described in Note 1(4) of the accounting policies and the
Glossary to the Accounts. Adjusting items are set out in Note 3 to the Group
Financial Statements.
Group Statement of Comprehensive Income
for the 52-week period ended 30 August 2025
£m 52-week 53-week
period ended period ended
30 August 2025 31 August 2024
Items that may be reclassified to the income statement:
Currency translation differences - (0.1)
Items that will not be reclassified to the income statement:
Tax credit on pension surplus 21 1.5 -
Other comprehensive result for the period 1.5 (0.1)
Profit for the period 28.3 25.5
Total comprehensive income for the period 29.8 25.4
Group Balance Sheet
as at 30 August 2025
£m Note At 30 At 31
August 2025 August 2024*
Non-current assets
Intangible assets 9 2.5 2.4
Property, plant and equipment 10 10.7 9.7
Right-of-use assets 17 29.4 29.5
Interest in equity accounted joint ventures 11 4.6 4.6
Deferred tax assets 18 0.8 1.3
Other non-current assets 0.9 -
48.9 47.5
Current assets
Inventories* 12 12.6 18.0
Trade and other receivables* 13 103.4 106.2
Cash and cash equivalents 15 8.2 7.0
Corporation tax receivable 0.9 0.9
125.1 132.1
Total assets 174.0 179.6
Current liabilities
Trade and other payables 14 (127.2) (128.5)
Lease liabilities 17 (5.6) (5.5)
Provisions 19 (0.5) (1.3)
(133.3) (135.3)
Non-current liabilities
Bank loans and other borrowings 15 (1.7) (17.6)
Lease liabilities 17 (24.9) (25.4)
Provisions 19 (4.6) (4.6)
(31.2) (47.6)
Total liabilities (164.5) (182.9)
Total net assets/(liabilities) 9.5 (3.3)
Equity
Called up share capital 22(a) 12.4 12.4
Share premium account 22(c) 60.5 60.5
Demerger reserve 23(a) (280.1) (280.1)
Own shares reserve 23(b) (2.9) (3.7)
Translation reserve 23(c) 0.2 0.2
Retained earnings 219.4 207.4
Total shareholders' funds/(deficit) 9.5 (3.3)
*Comparatives have been restated as detailed in Note 1(26).
The accounts were approved by the Board of Directors and authorised for issue
on 3 November 2025 and were signed on its behalf by:
Jonathan Bunting Paul Baker
Chief Executive Officer Chief Financial Officer
Registered number - 05195191
Group Statement of Changes in Equity
for the 52-week period ended 30 August 2025
£m Note Called up share capital Share premium account Demerger reserve Own shares reserve Translation reserve Retained earnings Total
Balance at 27 August 2023 12.4 60.5 (280.1) (4.4) 0.4 194.9 (16.3)
Profit for the period - - - - - 25.5 25.5
Currency translation differences - - - - (0.2) 0.1 (0.1)
Total comprehensive income for the period - - - - (0.2) 25.6 25.4
Dividends paid 7 - - - - - (10.8) (10.8)
Employee share scheme purchases - - - (3.3) - - (3.3)
Employee share scheme awards - - - 4.0 - (3.2) 0.8
Recognition of share-based payments net of tax - - - - - 0.9 0.9
Current tax recognised in equity - - - - - 0.1 0.1
Deferred tax recognised in equity - - - - - (0.1) (0.1)
Balance at 31 August 2024 and 1 September 2024 12.4 60.5 (280.1) (3.7) 0.2 207.4 (3.3)
Profit for the period - - - - - 28.3 28.3
Tax credit on pension surplus - - - - - 1.5 1.5
Total comprehensive income for the period - - - - - 29.8 29.8
Dividends paid 7 - - - - - (17.4) (17.4)
Employee share scheme purchases - - - (1.6) - - (1.6)
Employee share scheme awards - - - 2.4 - (2.1) 0.3
Recognition of share-based payments net of tax - - - - - 1.3 1.3
Current tax recognised in equity - - - - - 0.5 0.5
Deferred tax recognised in equity - - - - - (0.1) (0.1)
Balance at 30 August 2025 12.4 60.5 (280.1) (2.9) 0.2 219.4 9.5
Group Cash Flow Statement
for the 52-week period ended 30 August 2025
£m Note 52-week 53-week
period ended period ended
30 August 2025 31 August 2024
Net cash inflow from operating activities 21 49.4 22.4
Investing activities
Dividends received from joint ventures 11 0.2 0.2
Purchase of intangible assets 9 (0.6) (1.0)
Purchase of property, plant and equipment 10 (3.9) (3.4)
Interest received 0.2 0.4
Net cash used in investing activities (4.1) (3.8)
Financing activities
Interest paid (3.2) (4.9)
Dividend paid 7 (17.4) (10.8)
Repayments of lease principal (6.5) (5.9)
Repayment of term loan - (41.5)
Net (decrease)/increase in revolving credit facility 15 (15.9) 17.5
Purchase of own shares by Employee Benefit Trust (1.6) (3.3)
Proceeds from exercise of share purchase options 0.5 -
Net cash used in financing activities (44.1) (48.9)
Net decrease in cash and cash equivalents 1.2 (30.3)
Opening net cash and cash equivalents 7.0 37.3
Closing net cash and cash equivalents 15 8.2 7.0
Notes to the Accounts
1. Accounting policies
(1) Basis of consolidation
Smiths News plc ('the Company') is a company incorporated in England, UK under
the Companies Act 2006. The Group accounts for the 52-week period ended 30
August 2025 comprise the Company and its subsidiaries (together referred to as
the 'Group') and the Group's interests in joint ventures. Subsidiary
undertakings are included in the Group Accounts from the date on which control
is obtained. They are deconsolidated from the date on which control ceases.
All significant subsidiary accounts are made up to 30 August 2025 and are
included in the Group Accounts.
Unless otherwise noted references to 2024 and 2025 relate to a 53-week period
ended 31 August 2024 and the 52-week period ended 30 August 2025 as opposed to
calendar year.
The Accounts were authorised for issue by the directors on 3 November 2024.
(2) Accounting basis of preparation
The financial information contained within this preliminary announcement for
the 52 weeks to 30 August 2025 and the 53 weeks to 31 August 2024 does not
comprise statutory financial statements for the purpose of the Companies Act
2006 but is derived from those statements. The statutory accounts for Smiths
News PLC for the 53 weeks to 31 August 2024 have been filed with the Registrar
of Companies and those for the 52 weeks to 30 August 2025 will be filed
following the Company's annual general meeting. The auditor's reports on the
accounts for both the 52 weeks to 30 August 2025 and the 53 weeks to 31 August
2024 were unqualified, did not draw attention to any matters by way of
emphasis, and did not include a statement under Section 498 (2) or (3) of the
Companies Act 2006. The Annual Report and Accounts will be available for
shareholders in December 2025.
The Accounts are prepared on the historical cost basis and are presented in
Pound Sterling and rounded to £0.1m, except where otherwise indicated.
The Group Accounts have been prepared in accordance with UK-adopted
International Accounting Standards (IFRS) in conformity with the requirements
of the Companies Act 2006.
Intra-group balances and unrealised gains and losses or income and expenses
arising from intra-group transactions are eliminated in preparing the Group
Accounts. Unrealised gains and losses arising from transactions with joint
ventures are eliminated to the extent of the Group's interest in these
entities.
(3) Going concern
The Group accounts have been prepared on a going concern basis.
When assessing the going concern of the Group, the directors have reviewed the
period-to-date financial actuals, as well as detailed financial forecasts for
the period up to 27 February 2027, the Company's interim reporting date for
FY2027, the going concern period.
The Group currently has a net asset position of £9.5m as at 30 August 2025.
All bank covenant tests were met at the balance sheet date. The key Bank Net
(Cash)/Debt: Bank EBITDA ratio of (0.1)x was below the covenant test threshold
of 2.5x.
The intra-month working capital cash flow cycle at Smiths News generates a
routine and predictable cash swing and therefore a predictable fluctuation in
Bank Net Debt during the course of the month compared to the closing Bank Net
Debt position. The Group's average daily Bank Net Cash during the period was
£3.3m (2024: £11.7m Bank Net Debt). The Company utilises a Revolving Credit
Facility (RCF) to manage the cash swing. At the balance sheet date, £36.4m of
the RCF was available and the Company had £5.4m of cash on hand giving
headroom of £41.8m. Additionally the Group held £2.8m in the EBT for the
purpose of purchasing own shares.
3i) Bank facility
The Group's banking facility comprises an RCF of £40.0m and an uncommitted
accordion facility of £10.0m. The RCF is available less committed letters of
credit amounting to £1.5m (see Note 15). The agreement is with HSBC and
Santander.
The facility's current margin is 2.45% per annum over SONIA and has a final
maturity date of 2 May 2028, following the extension exercised on the
facility's first anniversary, and with the option of a one-year extension with
lender consent on the second anniversary.
3ii) Reverse stress testing
The Directors have prepared their base case forecast which represents their
best estimate of cash flows over the going concern period, and in accordance
with FRC guidance have prepared a reverse stress test that identifies either
insufficient liquidity or breach of the Bank Net Debt: Bank EBITDA ratio that
at peak debt would create a scenario which could lead to the facility being
exhausted or becoming repayable on demand, respectively.
A point of insufficient liquidity would occur in February 2027 if EBITDA was
56% below the Board approved three-year plan. The directors consider the
likelihood of this level of downturn to be remote based on:
· current trading which is in line with expectations;
· period-on-period declines in revenues would have to be
significantly greater than historical trends;
· 93% of contracts secured with publishers to 2029; and
· the Company continues to trade with adequate profit to
service its debt covenants.
3iii) Mitigating actions
In the event the break environment scenario went from being remote to possible
then management would seek to take mitigating actions to maintain liquidity
and compliance with the bank facility covenants. The options within the
control of management would be to:
· Optimise liquidity by working capital management of the
peak-to-trough intra-month movement. Utilising existing vendor management
finance arrangements;
· Utilise arrangements with retailers and optimise
contractual payment cycles to suppliers which would improve liquidity
headroom;
· Not pay planned dividend payments;
· Delay non-essential capex projects;
· Cancel discretionary annual bonus payments;
· Increase the principal facility amount by exercising the
£10m accordion option in the RCF Facility; and
· Identify other overhead and depot savings.
More extreme mitigating actions would also be available if the scenario
arose.
The Company has vendor finance arrangements in place where it has the ability
to request early payment of invoices at a small discount, the payments are
non-recourse and the invoices are considered settled from both sides once
payment is received. The Company has not made use of this facility in the
current or prior periods, nor since the balance sheet date.
3iv) Assessment
Having considered the above and the funding requirements of the Group and
Company, the directors are confident that headroom under the bank facility
remains adequate, future covenant tests can be met and there is a reasonable
expectation that the business can meet its liabilities as they fall due for a
period of greater than 12 months (being an assessment period of 16 months)
from the date of approval of the Group Financial Statements. For this reason,
the directors continue to adopt the going concern basis in preparing the
financial statements and no material uncertainty has been identified.
(4) Alternate performance measures
In reporting financial information, the Group presents alternative performance
measures (APMs), which are not defined or specified under the requirements of
IFRS.
The Group believes that these APMs (listed in the Glossary), are not
considered to be a substitute for, or superior to, IFRS measures but provide
stakeholders with additional helpful information on the performance of the
business. These APMs are consistent with how the business performance is
planned and reported to the Board and Executive Leadership Team.
The APMs do not have standardised meaning prescribed by IFRS and therefore may
not be directly comparable to similar measures presented by other companies.
(5) Estimates and judgements
The preparation of these accounts requires management to make judgements,
estimates and assumptions that affect the application of accounting policies
and the reported amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
Key accounting judgements
The significant judgements made in the accounts are:
Revenue recognition
The Group recognises the wholesale sales price for its sales of newspapers and
magazines. The Group is considered to be the principal based on the following
indicators of control over its inventory: discretion to establish prices; it
holds some of the risk of obsolescence once in control of the inventory on
returns; and has the responsibility of fulfilling the performance obligation
on delivery of inventory to its customers. If the Group were considered to be
the agent, revenue and cost of sales would reduce by £898.2m (2024:
£937.3m).
Adjusting items
Adjusting items of income or expense are excluded in arriving at adjusted
operating profit to present a further measure of the Group's performance. Each
adjusting item is considered to be significant in nature and/or quantum,
non-recurring in nature and/or considered to be unrelated to the Group's
ordinary activities or consistent with items treated as adjusting in prior
periods. Excluding these items from profit metrics provides readers with
helpful additional information on the performance of the business across
periods because it is consistent with how the business performance is planned
by, and reported to, the Board and the Executive Leadership Team.
The classification of adjusting items requires significant management
judgement in considering the nature and intentions of a transaction. Adjusted
measures are defined with other APMs in the Glossary.
Based on the nature of the transactions, adjusting items after tax was a
credit of £1.3m (2024: credit of £0.8m) and a breakdown is included within
Note 3.
Contingent liabilities
During the period the Group has responded to information requests from the
Pensions Regulator in respect of its investigation relating to the Tuffnells
defined benefit pension scheme and the Company's former period of ownership of
Tuffnells. Management has, supported by external legal advice, applied
judgement in concluding the matter to be disclosed as a contingent liability,
with further details included in Note 20.
Key sources of estimation uncertainty
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and
future periods.
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the end of the reporting period that may have a significant
risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next period are as follows.
Property provision
The Group holds a provision which estimates the future liabilities to restore
leased premises to an agreed standard at the date the lease is terminated. The
provision is calculated using assumptions which include the length of time
properties will be occupied, the discount rate applied, inflation and the
future costs of restoration and the condition of the property at the end of
occupation.
A change in any of these assumptions could materially impact the provision
balance. Refer to Note 19 for further details on the sensitivity of the
assumptions used to calculate the property provision. The property provision's
carrying value at the balance sheet date was £4.6m (2024: £5.2m).
(6) Revenue
Revenue from wholesale distribution
Revenue from wholesale distribution is recognised when products and services
have been delivered to and receipted by customers and there is no unfulfilled
obligation that could affect the customer's acceptance of the products or
services.
Revenue is earned from the wholesale of products, from charges for services,
being the sortation, delivery, merchandising and return of products, and from
the sale of recyclable returns waste. Products sold and handled are
principally newspapers, magazines and collectables, but also include other
items such as books and greeting cards. Certain products are sold to retailers
on a sale or return basis and estimation is made of the expected returns as
outlined further below.
Other revenue
Other revenue includes income from services to collect recyclate waste from
customers, the short-term use of storage and space in depots and management
fees for support provided to third parties.
Returns reserve
Sale of wholesale products are typically made on a sale or return basis, the
Group estimates a value of expected returns from retailers. Likewise, as the
publishers are required to provide the Group with credit for any purchase
returns, so a purchase returns reserve is also required. The key estimates
used in calculating the period end reserve are rates of returns (based on
historical tends), average shelf life of the product types and average margin
of each product type. These estimates are similarly applied to calculate the
credit for purchase returns.
Revenue for goods supplied with a right of return is stated net of the value
of any returns. Newspapers and magazines are often sold with retrospective
volume discounts based on aggregate net sales. Revenue from these sales is
recognised based on the price specified in the contract, net of the estimated
volume discounts. Accumulated experience is used to estimate and provide for
the discount and returns, using the expected value method, and revenue is only
recognised to the extent that it is highly probable that a significant
reversal will not occur. A returns reserve accrual and discount accrual
(included in trade and other payables) is recognised for expected volume
discounts and refunds payable to customers in relation to sales made until the
end of the reporting period. A right to the returned goods (included in other
debtors) is recognised for the products expected to be returned.
No element of financing is deemed present because the sales are made with
short credit terms, which is consistent with market practice.
A receivable is recognised when the goods are delivered, since this is the
point in time that the consideration is unconditional because only the passage
of time is required before the payment is due.
(7) Cost of sales and gross profit
The Group considers cost of sales to equate to cost of inventories recognised
as an expense and distribution costs as these are considered to represent for
the Group direct costs of making a sale.
Gross profit is equal revenue less cost of sales.
(8) Taxation
Tax on the profit or loss for the period comprises current and deferred tax.
Tax is recognised in the income statement, except to the extent it relates to
items recognised in other comprehensive income or directly in equity. Current
tax is the expected tax payable based on the taxable profit for the period,
using tax rates enacted, or substantively enacted, at the balance sheet date
and any adjustment to tax payable in respect of previous periods.
Deferred tax is provided on the balance sheet using the liability method with
temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes
recorded as a deferred tax asset of liability.
The amount of deferred tax provided is calculated using tax rates enacted or
substantively enacted at the balance sheet date that are expected to apply
when the related deferred tax asset is realised or the deferred tax liability
is settled. Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against which these
temporary differences can be realised.
(9) Segmental reporting
The Board is responsible for allocating resources and assessing the
performance of the business and is therefore identified as the chief operating
decision maker.
The Group has determined that it has one reportable segment identified as
Smiths News, a UK market-leading distributor of newspapers, magazines and
ancillary products and services to retailers across the UK. The performance of
Smiths News is reviewed, on a monthly basis, by the Board, making decisions
based on the Group as whole.
Included in revenues arising from Smiths News are revenues of £100.3m (2024:
£100.5m) which arose from sales to the Group's largest customer. Three other
customers contributed 13.1% (2024: 13.9%) of the Group's revenue in the
period.
No segmental analysis is required on geographical lines as substantially all
of the Group's activities are in the United Kingdom. As a result, no segmental
disclosure is provided.
(10) Dividends
Interim and final dividends are recognised in the financial statements in the
period in which they are declared.
(11) Capitalisation of internally generated development costs
Expenditure on developed software is capitalised when the Group is able to
demonstrate all of the following:
· the technical feasibility of the resulting asset;
· the ability (and intention) to complete the development
and use it;
· how the asset will generate probable future economic
benefits;
· adequate technical, financial and other resources to
complete the development and to use the software are available; and
· the ability to measure reliably the expenditure
attributable to the asset during its development.
Software costs are also capitalised if they can be hosted on another server,
are portable and the Group has sole rights to the software. Subsequent to
initial recognition, internally generated intangible assets are reported at
cost less accumulated amortisation and accumulated impairment losses, on the
same basis as intangible assets that are acquired separately. Software costs
provided on a licence agreement (software-as-a-service) are expensed as
incurred.
(12) Interests in joint ventures
The Group Financial Statements include the Group's share of the total
recognised gains and losses in its joint ventures on an equity accounted
basis.
Investments in equity accounted joint ventures are carried in the balance
sheet at cost adjusted by post-acquisition changes in the Group's share of the
net assets of the joint ventures, less any impairment losses. The carrying
values of investments in joint ventures include acquired goodwill. Losses in
joint ventures that are in excess of the Group's interest are recognised only
to the extent that the Group has incurred legal or constructive obligations or
made payments on behalf of the joint venture.
(13) Business combinations - goodwill and intangibles
The Group uses the acquisition method of accounting to account for business
combinations. The cost of an acquisition is measured at the fair value of the
assets given, equity instruments issued, liabilities incurred or assumed at
the date of exchange. Acquisition-related costs are recognised in profit or
loss as incurred. Any deferred or contingent purchase consideration is
recognised at fair value over the period of entitlement.
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured, initially, at their fair
values at the acquisition date, irrespective of the extent of any
non-controlling interest.
Goodwill arising on all acquisitions is initially recognised as an asset at
cost and is subsequently measured at cost and accumulated impairment losses.
The carrying value of goodwill is reviewed annually for impairment or whenever
events or changes in circumstances indicate that the carrying value may not be
recoverable. Intangible assets arising under a business combination (acquired
intangibles) are capitalised at fair value as determined at the date of
exchange and are stated at fair value less accumulated amortisation and
impairment losses. Amortisation of acquired intangibles is charged to the
income statement on a straight-line basis over the estimated useful lives as
follows:
Customer relationships - 2.5 to
7.5 years
Trade
name
- 5 to 10 years
Software and development costs - 3 to 7 years
Computer software and internally generated development costs which are not
integral to the related hardware are capitalised separately as an intangible
asset and stated at cost less accumulated amortisation and impairment losses.
All intangible assets are reviewed for impairment when there are indications
that the carrying value may be higher than its recoverable value. The
recoverable value used is the value in use. The value in use is determined by
estimating the future cash inflows and outflows to be derived from continuous
use of the asset and applying the appropriate discount rate to those future
cash flows. Where the carrying value is higher than the calculated value in
use, an impairment loss will be recognised.
(14) Property, plant and equipment
Property, plant and equipment assets are stated at cost less accumulated
depreciation and any recognised impairment losses. No depreciation has been
charged on freehold land. Other assets are depreciated, to a residual value,
on a straight-line basis over their estimated useful lives, as follows:
Freehold and long-term leasehold properties - over 20 years
Short-term leasehold properties - shorter of the lease
period and the estimated remaining economic life
Fixtures and
fittings - 3 to 15
years
Equipment and vehicles - 2 to 12
years
All property, plant and equipment is reviewed for impairment when there are
indications that the carrying value may not be recoverable.
(15) Leasing
Leases are recognised as a right-of-use asset and a corresponding liability at
the date at which the leased asset is available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of the
following lease payments:
· fixed payments (including in-substance fixed payments)
less any lease incentives receivable;
· variable lease payments that are based on an index or a
rate, initially measured using the index or rate as at the commencement date;
· amounts expected to be payable by the Group under
residual value guarantees;
· the exercise price of a purchase option if the Group is
reasonably certain to exercise that option; and
· payments of penalties for terminating the lease, if the
lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, which is generally the case
for leases in the Group, the lessee's incremental borrowing rate is used,
being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset
in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
· where possible, uses recent third-party financing
received by the individual lessee as a starting point, adjusted to reflect
changes in financing conditions since third-party financing was received;
· makes adjustments specific to the lease where applicable,
for example with regards to the term and security.
The Group is exposed to potential future increases in variable lease payments
based on an index or rate, which are not included in the lease liability until
they take effect. When adjustments to lease payments based on an index or rate
take effect, the lease liability is reassessed and adjusted against the
right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance
cost is charged to profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability
for each period.
Right-of-use assets are measured at cost comprising the following:
· the amount of the initial measurement of lease liability;
· any lease payments made at or before the commencement
date less any lease incentives received; and
· any initial direct costs.
Right-of-use assets are depreciated over the lease term on a straight-line
basis unless the lease transfers ownership of the underlying asset to the
lessee, to which depreciation is over the useful life of the underlying asset.
If the Group is reasonably certain to exercise a purchase option, the
right-of-use asset is depreciated over the underlying asset's useful life.
Payments associated with short-term leases of equipment and vehicles and all
leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of
12 months or less. Low-value assets comprise IT equipment and small items of
office furniture.
Extension and termination options
Extension and termination options are included in a number of property and
equipment leases across the Group. These are used to maximise operational
flexibility in terms of managing the assets used in the Group's operations.
The majority of extension and termination options held are exercisable only by
the Group and not by the respective lessor.
Modifications
When the Group revises its estimate of the term of any lease (because, for
example, it re-assesses the probability of a lessee extension or termination
option being exercised), it adjusts the carrying amount of the lease liability
to reflect the payments to make over the revised term, which are discounted
using a revised discount rate. The carrying value of lease liabilities is
similarly revised when the variable element of future lease payments dependent
on a rate or index is revised, except the discount rate remains unchanged. In
both cases an equivalent adjustment is made to the carrying value of the
right-of-use asset, with the revised carrying amount being amortised over the
remaining (revised) lease term. If the carrying amount of the right-of-use
asset is adjusted to zero, any further reduction is recognised in profit or
loss.
(16) Inventories
Inventories comprise goods held for resale and are stated at the lower of cost
or net realisable value. Inventories are recorded at purchase cost.
(17) Financial instruments
Financial assets and financial liabilities are recognised on the Group's
balance sheet when the Group becomes a party to the contractual provisions of
the instrument. The Group derecognises financial assets and liabilities only
when the contractual rights and obligations are transferred, discharged or
expire.
Financial assets comprise trade and other receivables and cash and cash
equivalents. Financial liabilities comprise trade payables, financing
liabilities and bank borrowings.
(18) Financial assets
The Group classifies its financial assets in the following measurement
categories:
· those to be measured subsequently at fair value (either
through profit or loss (FVTPL) or through other comprehensive income (FVOCI);
and
· those to be measured at amortised cost.
The classification depends on the entity's business model for managing the
financial assets and the contractual terms of the cash flows.
Trade receivables
Trade receivables are initially measured at fair value, which for trade
receivables is equal to the consideration expected to be received from the
satisfaction of performance obligations, plus any directly attributable
transaction costs. Subsequent to initial recognition these assets are measured
at amortised cost less any provision for impairment losses including expected
credit losses. The Group applies the simplified approach to measuring expected
credit losses which uses a lifetime expected loss allowance for all trade
receivables. To measure the expected credit losses, trade receivables have
been grouped based on shared credit risk characteristics such as the ageing of
the debt and the credit risk of the customers. An historical credit loss rate
is then calculated for each group and then adjusted to reflect expectations
about future credit losses. The Group does not have any contract assets.
Classification as trade receivables
Trade receivables are amounts due from customers for goods sold or services
performed in the ordinary course of business. They are generally due for
settlement within 30 days and are therefore all classified as current. The
Group holds trade receivables with the objective of collecting the contractual
cash flows, and so it measures them subsequently at amortised cost using the
effective interest method. Details about the Group's impairment policies and
the calculation of the loss allowance are provided in Note 13.
Due to the short-term nature of current receivables, their carrying amount is
considered to be the same as their fair value.
Other receivables
Other receivables are recognised on trade date, being the date on which the
Group has the right to the asset. Other receivables are derecognised when the
rights to receive cash flows from the other receivables have expired or have
been transferred and the Group has transferred substantially all the risks and
rewards of ownership.
At initial recognition, the Group measures other receivables at their fair
value plus, in the case of a financial asset not held at FVTPL, transaction
costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of FVTPL financial assets are expensed in profit or
loss.
Subsequent measurement of other receivables depends on the Group's business
model for managing the asset and the cash flow characteristics of the asset.
The Group classifies its other receivables at amortised cost.
Assets that are held for collection of contractual cash flows, where those
cash flows represent solely payments of principal and interest, are measured
at amortised cost. Interest income from these financial assets is included in
finance income using the effective interest rate method. Any gain or loss
arising on derecognition is recognised within other gains/(losses). Impairment
losses are presented separately in Note 2.
The Group classifies its financial assets at amortised cost when it is held
within a business model whose objective is to collect the contractual cash
flows, and the contractual terms give rise to cash flows that are solely
payments of principal and interest.
The Group applies the general approach to impairment under IFRS 9 based on
significant increases in credit risk rather than the simplified approach for
trade receivables using lifetime ECL.
(19) Trade and other payables
These amounts represent liabilities for goods and services provided to the
Group prior to the end of the period which are unpaid. The amounts are
unsecured and are usually paid within 30 days of recognition. Trade and other
payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost using the effective
interest method.
(20) Treasury
Cash and cash equivalents
Cash and cash equivalents in the balance sheet and cash flow statement
comprise cash at bank and in hand, short-term deposits and funds with an
original maturity of three months or less, held with the intention to meet
short-term cash commitments, and it is subject to an insignificant risk of
changes in value. BACS and next-day payments are recognised at the settlement
date, rather than when they are initiated, to reflect the nature of these
transactions.
Cash and cash equivalents includes amounts held by the EBT for the purpose of
purchasing own shares.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument
is any contract that evidences a residual interest in the assets of the Group
after deducting all of its liabilities. Equity instruments issued are recorded
at the proceeds received, net of direct issue costs.
Bank borrowings
Interest-bearing bank loans and overdrafts are initially measured at fair
value (being proceeds received, net of direct issue costs), and are
subsequently measured at amortised cost, using the effective interest rate
method. Finance charges, including premiums payable on settlement or
redemptions and direct issue costs, are accounted for on an accruals basis and
taken to the income statement using the straight-line method and are added to
the carrying value of the instrument to the extent that they are not settled
in the period in which they arise.
Modification/derecognition of financial liabilities
Financial liabilities are derecognised when there is extinguishment of the
original financial liability and recognition of a new financial liability.
Equally, significant modification of the terms of the existing financial
liability is accounted for as an extinguishment of the original financial
liability and recognition of a new financial liability.
Foreign currencies
Financial statements of foreign operations
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on acquisition of a foreign entity, are treated as
assets and liabilities of the foreign entity and are translated at foreign
exchange rates ruling at the balance sheet date. The revenues and expenses of
foreign operations are translated at an average rate for the period where this
rate approximates to the foreign exchange rates ruling at the dates of the
transactions.
Foreign currency transactions
Transactions in foreign currencies are recorded using the rate ruling at the
date of the transaction. Monetary assets and liabilities denominated in
foreign currencies at the balance sheet date are translated at the foreign
exchange rate ruling at that date. Foreign exchange differences arising on
translation are recognised in the income statement. Non-monetary assets and
liabilities that are measured in terms of historical cost in a foreign
currency are translated using the exchange rate at the date of the
transaction. Non-monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are translated at foreign exchange
rates ruling at the dates the fair value was determined.
(21) Provisions
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of a past event and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are
measured at the present value of the directors' best estimate of the
expenditure required to settle the present obligation at the balance sheet
date and if this amount is capable of being reliably estimated. If such an
obligation is not capable of being reliably estimated, no provision is
recognised and the item is disclosed as a contingent liability where material.
Where the effect is material, the provision is determined by discounting the
expected future cash flows.
(22) Retirement benefit costs
Defined contribution schemes
The Group operates two defined contribution schemes for the benefit of its
employees. Payments to the Group's schemes are recognised as an expense in the
income statement as incurred.
(23) Employee Benefit Trust
The Smiths News Employee Benefit Trust (EBT) purchases and holds shares in the
Company from the market to satisfy the demand from the Group's share schemes.
The EBT is a separately administered trust that is funded by contributions
from Group companies. The assets of the trust comprise shares held in Smiths
News plc and cash balances.
The Group consolidates the assets and liabilities of the EBT into the Group
Financial Statements as a subsidiary on the basis of control. Where the EBT
holds any shares in the Company, these are deducted from equity as 'own shares
reserve' until those shares are either cancelled or transferred out of the
EBT.
The shares held by the EBT are valued at the historical cost of the shares
acquired. This value is deducted in arriving at shareholders' funds and
presented as the own share reserve.
(24) Share schemes
Share-based payments
The Group operates several share-based payment schemes, being the Sharesave
Scheme, the Executive Share Option Scheme, the LTIP and the Deferred Bonus
Plan. Details of these are provided in the Directors' Remuneration report and
in Note 24.
Equity-settled share-based schemes are measured at fair value at the date of
grant. The fair value is expensed with a corresponding increase in equity on a
straight-line basis over the period during which employees become
unconditionally entitled to the options. The fair values are calculated using
an appropriate option pricing model and are adjusted where a scheme includes
market-based performance criteria. The income statement charge is then
adjusted to reflect expected and actual levels of vesting based on non-market
performance-related criteria.
Administrative expenses and distribution and marketing expenses include the
cost of the share-based payment schemes.
(25) Changes in accounting policies
During the period the Group has adopted the following accounting standards and
interpretations:
· Lease Liability in a Sale and Leaseback (Amendments to IFRS 16 Leases);
· Classification of Liabilities as Current or Non-Current (Amendments to
IAS 1 Presentation of Financial Statements);
· Non-current Liabilities with Covenants (Amendments to IAS 1
Presentation of Financial Statements); and
· Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash
Flows and IFRS 7 Financial Instruments: Disclosures).
The standards and amendments adopted had no impact on the financial statements
to prior periods and are not expected to significantly affect the current or
future periods.
New standards and interpretations not yet applied
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
IFRS 18 - Presentation and Disclosure of Financial Statements was issued in
April 2024 and replaces IAS 1 - Presentation of Financial Statements. The
standard sets out new requirements for presentation in the income statement,
including specified totals and subtotals, additional guidance on aggregation
and disaggregation, and additional required disclosures in respect of
management performance measures (which replace alternative performance
measures).
The impact of this standard on the Group is currently being assessed. The
standard is effective from 1 January 2027 with early adoption permitted.
The Group does not expect any other standards issued by the IASB, but not yet
effective, to have a material impact on the Group.
(26) Restatement of comparative information
The prior period balance sheet has been restated to reclassify £4.1m of
returned newspapers from inventories to trade and other receivables to
correctly reflect the nature of the balance. This has no impact on the net
assets, cash flow statement, or income statement. The same reclassification
of £4.1m was also required in the 2023 period end balance sheet.
2. Operating profit
Revenue and cost of sales are analysed as follows:
£m 2025 2024
Adjusted Adjusting items Total Adjusted Adjusting items Total
Wholesale distribution revenue 1,061.0 - 1,061.0 1,101.1 - 1,101.1
Other revenue 3.0 - 3.0 2.6 - 2.6
Total revenue 1,064.0 - 1,064.0 1,103.7 - 1,103.7
Cost of inventories recognised as an expense (898.2) - (898.2) (937.3) - (937.3)
Distribution costs (90.7) - (90.7) (93.2) - (93.2)
Cost of sales (988.9) - (988.9) (1,030.5) - (1,030.5)
Gross profit 75.1 - 75.1 73.2 - 73.2
Operating profit is stated after charging/(crediting):
£m Note 2025 2024
Depreciation on property, plant and equipment 10 2.5 2.2
Amortisation of intangible assets 9 0.5 0.4
Depreciation on right-of-use assets 17 6.5 5.9
Short-term and low-value lease charges on equipment and vehicles 0.6 0.5
Lease rental income - land and buildings (0.2) (0.4)
Staff costs (excluding share-based payments) 4 46.6 44.1
Included in administrative expenses are amounts payable by the Company and its
subsidiary undertakings in respect of audit and non-audit services which are
as follows:
£m 2025 2024
Fees payable to the Company's auditor for the audit of the Group and Company's 0.2 0.2
annual accounts - BDO LLP
Fees payable to the Company's auditor for the audit of the Company's 0.5 0.5
subsidiaries - BDO LLP
Total non-audit fees (interim review) 0.1 0.1
Total fees 0.8 0.8
Details of the Company's policy on the use of auditors for non-audit services
and how the auditor's independence and objectivity were safeguarded are set
out in the Audit Committee Report in the Annual Report 2025.
3. Adjusting items
£m 2025 2024
Tuffnells costs (a) (0.8) 0.2
Technology transformation costs (b) (0.7) (0.1)
Network and reorganisation costs (c) (0.1) (0.1)
Administrative expenses (1.6) -
Impairment reversal on trade receivables (d) 3.7 0.6
Impairment reversal of investment in joint ventures (e) - 0.3
Total before tax 2.1 0.9
Taxation (0.8) (0.1)
Total after taxation 1.3 0.8
The Group recognised a net total adjusting items credit before tax of £2.1m
(2024: £0.9m) and net credit of £1.3m (2024: £0.8m) after tax respectively.
Adjusting items are defined in the accounting policies in Note 1 and in the
Glossary. In the directors' opinion, removing these items from the adjusted
profit provides a relevant analysis of the trading results of the Group
because it is consistent with how the business performance is planned by, and
reported to, the Board and Executive Team. However, these additional measures
are not intended to be a substitute for, or superior to, IFRS measures. They
comprise:
Administrative expenses: £1.6m costs (2024: net £nil)
(a) Tuffnells costs: £0.8m (2024: £0.2m credit)
As part of the sale of Tuffnells Parcels Express Limited (Tuffnells) in May
2020, a contractual agreement was put in place in respect of the future
treatment and responsibility of certain insurance claims brought or notified
to insurers. This agreement extinguished the Group's exposure to new accident
and insurance claims brought after the sale of Tuffnells but which related to
the Group's period of ownership of Tuffnells up to May 2020.
During the period, a review of provisions was held in respect of all remaining
claims held following utilisations in the period and as a result, the
provision was increased by £0.1m (2024: reduced by £0.2m), reflecting
management's best estimate of remaining claims brought at the period end.
In the period professional fees of £0.7m were incurred in respect of the
Group responding to information requests from the Pensions Regulator in
respect of its investigation relating to the Tuffnells defined benefit pension
scheme and the Company's former period of ownership of Tuffnells. Further
details are included in Note 20.
These provisions have been reported as adjusting items on the basis that it
relates to a former discontinued operation and is therefore outside the
normal course of activity. The cash impact during the period was an outflow of
£1.0m (2024: £0.1m) being £0.8m of professional fees and £0.2m (2024:
£0.1m) of insurance settlements.
(b) Technology transformation costs: £0.7m (2024: £0.1m)
In the prior period a transformation programme to enhance its technology
infrastructure and enable alignment to the Group's updated vision and strategy
commenced.
Implementation costs of £0.7m (2024: £0.1m) have been recognised as
adjusting items on the basis that the three-year programme is driving a
significant change to the Company and largely comprise software-as-a-service
arrangements. The cash impact was an outflow of £0.7m (2024: £0.1m).
(c) Network and reorganisation costs: £0.1m (2024: £0.1m)
During the period, an additional £0.1m (2024: £0.1m) of costs were provided
for with regards to simplifying the DMD group structure. It is expected that
this work will be concluded in the next 12 months.
The cash impact of network and reorganisation was a £0.1m outflow (2024:
£0.2m outflow).
(d) Impairment provision on trade receivables: £3.7m credit (2024: £0.6m)
In respect of the administration of McColl's Retail Group during FY2022, at
FY2024 a provision of £3.8m was held, in respect of management's best
estimate of recovery of 30% of the total claim filed representing a total of
£1.7m, as per the issued notification from the administrators.
During the period, £5.4m was recovered from the administrators in final
settlement of the claim, which was £3.7m higher than expected, and therefore
released and reported as an adjusting item on the same basis as previous
impairment losses and reversals recognised during the prior periods. Further
details are included in Note 13.
(e) Impairment reversal of investment in joint ventures: £nil (2024: £0.3m
reversal)
During the prior period, the Company reviewed the business plan for the Rascal
joint venture. As a result of this review, the remaining cumulative impairment
of £0.3m was reversed, which has been presented within adjusting items to
align to the previous impairment charge, which was significant in both quantum
and nature to the results of the Group.
Taxation on adjusting items increased by £0.7m to £0.8m (2024: £0.1m),
driven by the release of McColls provision noted above.
4. Staff costs and employees
The aggregate remuneration of employees (including Executive Directors) was:
£m 2025 2024
Wages and salaries 41.2 39.4
Social security 4.2 3.6
Pension costs 1.2 1.1
Share-based payments expense 1.3 0.9
Total 47.9 45.0
The total average number of employees (including Executive Directors) was:
2025 2024*
Operations 1,291 1,345
Support functions 121 120
Total 1,412 1,465
*During the period, the average number of employees reported has been updated
to better align to the requirements of the Companies Act. Comparatives have
been restated as a result.
Defined contribution pension schemes
The Group operates two defined contribution pension schemes. For the 52 weeks
ended 30 August 2025, contributions from the respective employing company
totalled £1.2m (2024: £1.1m) which is included in the income statement.
A defined contribution plan is a pension plan under which the Group pays
contributions to an independently administered fund - such contributions are
based on a fixed percentage of employees' pay. The Group has no legal or
constructive obligations to pay further contributions to the fund once the
contributions have been paid. Members' benefits are determined by the amount
of contributions paid by the Company and the member, together with investment
returns earned on the contributions arising from the performance of each
individual's chosen investments and the type of pension the member chooses to
buy at retirement. As a result, actuarial risk (that benefits will be lower
than expected) and investment risk (that assets invested in will not perform
in line with expectations) fall on the employee.
5. Finance costs and finance income
£m Note 2025 2024
Interest on bank overdrafts and loans (0.8) (2.7)
Amortisation of loan arrangement fees* (0.2) (1.4)
Interest payable on leases (2.4) (2.0)
Total interest cost on financial liabilities at amortised cost (3.4) (6.1)
Unwind of discount on provisions 19 (0.2) (0.2)
Finance costs (3.6) (6.3)
Finance income 0.3 0.4
Net finance costs (3.3) (5.9)
*During the prior period £0.8m of unamortised arrangement fees were
immediately recognised on derecognition of the previous loan facility.
Finance income comprises interest received on bank deposits.
6. Income tax expense
£m 2025 2024
Adjusted Adjusting items Total Adjusted Adjusting items Total
Current tax 8.7 0.8 9.5 8.2 0.1 8.3
Adjustment in respect of prior period (0.3) - (0.3) - - -
Total current tax charge 8.4 0.8 9.2 8.2 0.1 8.3
Deferred tax - current period 0.4 - 0.4 0.3 - 0.3
Total tax charge 8.8 0.8 9.6 8.5 0.1 8.6
Effective tax rate 24.6% 25.3% 25.6% 25.2%
The effective adjusted income tax rate in the period was 24.6% (2024: 25.6%).
After the impact of tax recognised on adjusting items of £0.8m (2024:
£0.1m), the effective statutory income tax rate was 25.3% (2024: 25.2%).
Corporation tax is calculated at the main rate of UK corporation tax of 25%
(2024: 25%). The Group has assessed its deferred tax positions using a rate of
25%. Taxation for other jurisdictions was applied using prevailing rates.
The tax charge for the period can be reconciled to the profit in the income
statement as follows:
£m 2025 2024
Profit before tax 37.9 34.1
Tax on profit at the standard rate of UK corporation tax 9.5 8.5
Income not subject to tax - (0.1)
Expenses not deductible for tax purposes 0.4 0.3
Adjustment in respect of prior periods (0.3) 0.1
Share options - (0.2)
Tax charge 9.6 8.6
Amounts recognised directly in equity
A current tax credit of £0.5m (2024: £0.1m) and deferred tax charge of
£0.1m (2024: charge of £0.1m) was recognised directly in equity during the
period.
Impact of future tax changes
The UK Government enacted legislation on 11 July 2023 to implement the Base
Erosion and Profit Shifting (BEPS) Pillar Two model rules, including a
Qualified Domestic Minimum Top-Up Tax. This legislation ensures that
multinational enterprises (MNEs) pay a minimum tax rate of 15% on UK and
overseas profits arising after 31 December 2023.
The period ended 30 August 2025 is the first to which these rules apply for
the Group, which falls within scope of the legislation due to its UK and
international presence and revenue exceeding €750 million. However, as the
Group's business is substantially UK-based, and with its international
revenues and profits at a de minimis level, there has been no impact on the
Group's financial statements for the period.
7. Dividends
Amounts paid and proposed as distributions to equity shareholders in each
period is set out below:
Dividends proposed in the period 2025 2024 2025 2024
Per share Per share £m £m
Interim dividend 1.75p 1.75p 4.2 4.2
Final dividend 3.80p 3.40p 9.2 8.2
Special dividend 3.00p 2.00p 7.3 4.8
8.55p 7.15p 20.7 17.2
Dividends paid in the period
Final dividend - prior period 3.40p 2.75p 8.3 6.7
Special dividend - prior period 2.00p - 4.9 -
Interim dividend - current period 1.75p 1.75p 4.2 4.2
7.15p 4.50p 17.4 10.8
After the balance sheet date, a final ordinary dividend of 3.80p per share is
proposed for the 52 weeks ended 30 August 2025 (53 weeks ended 31 August 2024:
3.40p), alongside a special dividend of 3.00p per share (2024: 2.00p), each of
which is expected to be paid on 5 February 2026 to all shareholders who are on
the register of members at close of business on 9 January 2026. The
ex-dividend date will be 8 January 2026.
8. Earnings per share
2025 2024
£m Million Pence £m Million Pence
Earnings Weighted average number of shares per share Earnings Weighted average number of shares per share
Weighted average number of shares in issue 247.7 247.7
Shares held by the Employee Benefit Trust (weighted) (5.3) (7.4)
Basic earnings per share (EPS)
Adjusted earnings attributable to ordinary shareholders 27.0 242.4 11.1 24.7 240.3 10.3
Adjusting items 1.3 0.8
Earnings attributable to ordinary shareholders 28.3 242.4 11.7 25.5 240.3 10.6
Diluted earnings per share (EPS)
Effect of dilutive share options 7.8 10.8
Diluted adjusted EPS 27.0 250.2 10.8 24.7 251.1 9.8
Diluted EPS 28.3 250.2 11.3 25.5 251.1 10.2
Dilutive shares increase the basic number of shares at 30 August 2025 by 7.8m
to 250.2m (31 August 2024: by 10.8m to 251.1m). The calculation of diluted EPS
reflects the potential dilutive effect of employee incentive schemes.
9. Intangible assets
Goodwill Acquired intangibles Internally generated development costs Computer software costs Total
£m Customer relationships Trade name
Cost:
At 1 September 2024 5.7 2.1 0.2 2.6 2.6 13.2
Additions - - - 0.2 0.4 0.6
Disposals - - - - (0.4) (0.4)
At 30 August 2025 5.7 2.1 0.2 2.8 2.6 13.4
Accumulated amortisation and impairment:
At 1 September 2024 (5.7) (2.1) (0.2) (0.6) (2.2) (10.8)
Amortisation charge - - - (0.3) (0.2) (0.5)
Disposals - - - - 0.4 0.4
At 30 August 2025 (5.7) (2.1) (0.2) (0.9) (2.0) (10.9)
Net book value at 30 August 2025 - - - 1.9 0.6 2.5
Cost:
At 27 August 2023 5.7 2.4 0.2 1.8 2.8 12.9
Additions - - - 0.8 0.1 0.9
Disposals - (0.3) - - (0.3) (0.6)
At 31 August 2024 5.7 2.1 0.2 2.6 2.6 13.2
Accumulated amortisation and impairment:
At 27 August 2023 (5.7) (2.4) (0.2) (0.4) (2.3) (11.0)
Amortisation charge - - - (0.2) (0.2) (0.4)
Disposals - 0.3 - - 0.3 0.6
At 31 August 2024 (5.7) (2.1) (0.2) (0.6) (2.2) (10.8)
Net book value at - - - 2.0 0.4 2.4
31 August 2024
10. Property, plant and equipment
£m Land and buildings
Long-term leasehold improvements Short-term leasehold Fixtures and fittings Equipment and vehicles Total
improvements
Cost:
At 1 September 2024 - 9.7 3.2 15.8 28.7
Additions - 2.6 0.7 0.2 3.5
Disposals - (1.1) (0.2) (2.0) (3.3)
At 30 August 2025 - 11.2 3.7 14.0 28.9
Accumulated depreciation:
At 1 September 2024 - (6.4) (1.6) (11.0) (19.0)
Depreciation charge - (0.9) (0.3) (1.3) (2.5)
Disposals - 1.2 0.1 2.0 3.3
At 30 August 2025 - (6.1) (1.8) (10.3) (18.2)
Net book value at - 5.1 1.9 3.7 10.7
30 August 2025
Cost:
At 27 August 2023 0.2 9.2 3.5 17.0 29.9
Additions - 1.4 0.1 1.6 3.1
Disposals (0.2) (0.9) (0.4) (2.8) (4.3)
At 31 August 2024 - 9.7 3.2 15.8 28.7
Accumulated depreciation:
At 27 August 2023 (0.2) (6.8) (1.7) (12.4) (21.1)
Depreciation charge - (0.5) (0.3) (1.4) (2.2)
Disposals 0.2 0.9 0.4 2.8 4.3
At 31 August 2024 - (6.4) (1.6) (11.0) (19.0)
Net book value at - 3.3 1.6 4.8 9.7
31 August 2024
11. Interests in equity accounted joint ventures
£m 2025 2024
At beginning of the period 4.6 4.4
Share of profit* 0.2 0.1
Impairment reversal - 0.3
Dividends received (0.2) (0.2)
At end of the period 4.6 4.6
*During the period working capital loans of £0.3m (2024: £0.3m) were made to
joint ventures that were fully impaired and presented with losses from joint
ventures.
The joint ventures listed below have share capital consisting solely of
ordinary shares, which are held directly by the Group.
Nature of investments in joint ventures
Company name/ Share class Group % Registered address Measurement method
(number)
Rascal Solutions Limited Ordinary A Shares 50% C/O Mercer & Hole, The Pinnacle, 170 Midsummer Boulevard, Milton Keynes, Equity method
MK9 1BP
05191277
Bluebox Systems Group Limited SC544863 Ordinary A Shares 31.8% Estantia House, Pitreavie Drive, Pitreavie Business Park, Dunfermline, Fife Equity method
KY11 8US
Fresh On The Go Limited Ordinary Shares 29.9% 61 Bridge Street, Kington, HR5 3DJ Equity method
08775703
The Group owns 50% of the ordinary shares of Rascal Solutions Limited, a
company incorporated in England, which in turn owns 100% of the ordinary
shares of Open-Projects Limited. The latest statutory accounts of Rascal
Solutions Limited were drawn up to 31 August 2024. Rascal Solutions Limited
provides retail support services and is a strategic partnership for the Group
to provide additional services to its existing customers.
Bluebox Systems Group Limited is the holding company of Bluebox Aviation
Systems Ltd, the principal activity of which is the sale of innovative
in-flight entertainment systems. This business is a strategic partnership with
DMD which also provides inflight media to the aviation industry.
Fresh On The Go Limited provides retail outlets with coffee vending and other
related products. After the balance sheet date, the Group disposed of its
holding in Fresh On The Go Limited for consideration of £25,000.
During the period, the Group disposed of its holding in Lucid Digital
Magazines Limited t/a LoveMedia for the nominal value of the shares,
representing consideration of £100.
There are no other commitments relating to its joint ventures. All joint
ventures are private companies and there is no quoted market price available
for their shares.
Dividends of £0.2m (2024: £0.2m) were received in the period from joint
ventures.
Rascal Solutions Limited investment
During the period Rascal Solutions Limited (Rascal) recorded a profit of
£0.3m (2024: £0.3m). The Group holds £4.6m (2024: £4.6m) on the balance
sheet comprising a £2.2m (2024: £2.2m) share of net assets and £2.4m (2024:
£2.4m) of goodwill. Goodwill represents the difference between the fair value
of the share of the net assets acquired and the amount paid, and forms part of
the investment in the joint venture.
During the prior period, the Company reviewed the business plan for the Rascal
Joint Venture, considering the cumulative previous impairment recognised of
£0.3m, and as a result of this review, the remaining impairment was reversed.
There have been no new indicators of impairment identified during the current
period and therefore an impairment review has not been performed.
12. Inventories
£m 2025 2024
Goods held for resale* 12.5 17.9
Raw materials and consumables 0.1 0.1
Total 12.6 18.0
*Comparatives have been restated as detailed in Note 1(26).
13. Trade and other receivables
£m 2025 2024
Trade receivables 69.4 76.4
Provision for individually assessed expected credit losses ((1)) - (3.8)
Provision for collectively assessed expected credit losses (0.1) (0.1)
69.3 72.5
Other debtors* 31.3 30.5
Prepayments 1.7 1.8
Accrued income 1.1 1.4
Trade and other receivables 103.4 106.2
*Comparatives have been restated as detailed in Note 1(26).
(1) Net impairment loss on trade receivables - McColls
Retail Group
During the period ended 27 August 2022, the Company received notice that
McColl's Retail Group had gone into administration. A statement of claim was
filed with the administrators for an amount of £5.5m.
At the prior period end, a provision of £3.8m was held, in respect of
management's best estimate of recovery of 30% of the total claim filed
representing a total of £1.7m, as per the issued notification from the
administrators. During the period, £5.4m was recovered from the
administrators in final settlement of the claim, which was £3.7m higher than
expected, and therefore released to the income statement. The remaining £0.1m
was written off to the provision.
In the prior period the expected credit loss provision of £3.8m was allocated
to 'over 90 days overdue' matching the ageing profile of the £5.5m total
receivable due.
Trade receivables
The average credit period taken on sale is 32 days (2024: 32 days). Trade
receivables are generally non-interest bearing. The following table provides
information about the Group's exposure to credit risk and expected credit
losses held against customer balances:
£m 2025 2024
Gross Individually Collectively assessed ECL Net Gross Individually Collectively assessed ECL Net
carrying assessed carrying carrying assessed carrying
amount ECL amount amount ECL amount
Current (not overdue) 69.3 - (0.1) 69.2 70.4 - (0.1) 70.3
30-60 days overdue - - - - 0.1 - - 0.1
61-90 days overdue - - - - 0.1 - - 0.1
Over 90 days overdue 0.1 - - 0.1 5.8 (3.8) - 2.1
Total 69.4 - (0.1) 69.3 76.4 (3.8) (0.1) 72.5
The following table provides information about the Group's loss rates applied
against customer balances:
% 2025 2024
Current (not overdue) <0.1 <0.1
1-30 days overdue 1.7 <0.1
30-60 days overdue 17.0 <0.1
61-90 days overdue 20.4 <0.1
Over 90 days overdue 31.0 70.0
Of the trade receivables balance at the end of the period:
· two (2024: two) customers had individual balances that represented more than
10% of the total trade receivables balance. The total of these was £18.7m
(2024: £20.9m); and
· a further five (2024: three) customers had individual balances that
represented more than 5% of the total trade receivables balance. The total of
these was £23.8m (2024: £16.9m).
The movement in provision for expected credit losses for the period is
detailed below:
£m Note 2025 2024
At beginning of the period 3.9 4.5
Expected credit losses recognised 0.1 0.1
Reversal of individually assessed credit losses 3 (3.7) (0.6)
Amounts written off as uncollectible (0.2) (0.1)
At end of the period 0.1 3.9
The directors consider that the carrying amount of trade and other receivables
approximates their fair value which is considered to be a level 2 methodology
of valuation. The inputs used to measure fair value are categorised into
different levels of the fair value hierarchy (levels 1 to 3). The fair value
measurement is categorised in its entirety in the level of the lowest level
input that is significant to the entire measurement.
Default occurs when the debt becomes overdue by 90 days.
The Group performed sensitivity analysis on the expected credit loss and
should the default rate change from expected:
· An increase in default rate by 2% would increase the expected credit
loss by £1.4m.
· A decrease in default rate by 2% would result in no credit losses.
· An increase in default rate by 5% would increase the expected credit
loss by £3.4m.
· A decrease in default rate by 5% would result in no credit losses.
Other debtors and prepayments
The largest items included within this balance are returns reserve asset of
£17.0m (2024: £16.9m) (refer to Note 1, section 6) and £7.1m (2024: £8.0m)
of publisher debtors.
14. Trade and other payables
£m 2025 2024
Trade payables (87.2) (88.4)
Other creditors (31.7) (32.6)
Accruals (8.2) (7.4)
Deferred income (0.1) (0.1)
(127.2) (128.5)
Included within other creditors is a balance of £19.8m (2024: £19.8m)
relating to the returns reserve accrual. (Refer to Note 1, section 6.)
Trade and other payables principally comprise amounts outstanding for trade
purchases and ongoing costs. The average credit period taken for trade
purchases is 30 days (2024: 33 days). No interest is charged on trade
payables. The directors consider that the carrying amount of trade and other
payables approximates to their fair value using a level 2 valuation.
15. Cash and borrowings
Cash and borrowings by currency (sterling equivalent) were as follows:
£m Sterling Euro and other Total 2025 2024
Cash at bank and in hand 5.2 0.2 5.4 7.0
Cash held by the EBT to purchase own shares 2.8 - 2.8 -
Total cash and cash equivalents 8.0 0.2 8.2 7.0
Revolving credit facility (2.1) - (2.1) (18.0)
Unamortised arrangement fees - presented in non-current liabilities 0.4 - 0.4 0.4
Total borrowings (1.7) - (1.7) (17.6)
Net cash/(borrowings) 6.3 0.2 6.5 (10.6)
Total borrowings
Amounts due after 12 months (1.7) - (1.7) (17.6)
Total (1.7) - (1.7) (17.6)
The carrying amount of cash and cash equivalents approximates to their fair
value.
The Group has a financing facility in place comprising a £40.0m Revolving
Credit Facility (RCF) with a £10.0m accordion option. The agreement is with
HSBC and Santander. This initial arrangement had a final maturity date of 2
May 2027 with the option of two one-year extensions on the first and second
anniversaries. During the period, the first one-year extension was exercised
which extended the maturity date to 2 May 2028.
At 30 August 2025, £2.1m (2024: £18.0m) of the RCF was drawn. The total
available amount is £40.0m for the life of the facility. As part of the terms
of the financing, the Company and its principal trading subsidiaries provide
security over their assets to the lenders. The current rate on the facility is
2.45% per annum over SONIA.
At 30 August 2025, the Company had £37.9m (2024: £22.0m) of undrawn
committed borrowing facilities in respect of which all conditions precedent
had been met. This is partially reduced by letters of credit of £1.5m (2024:
£1.5m); further details are included in Note 20.
During the period, the net decrease of £15.9m in total borrowings comprised
£101.8m of cash inflows from drawing down the RCF and £117.7m of cash
outflows from repayment of the RCF.
Reconciliation of liabilities arising from financing activities
The table below details changes in the Group's liabilities arising from
financing activities, including both cash and non-cash changes. Liabilities
arising from financing activities are those for which cash flows were, or
future cash flows will be, classified in the Group's consolidated statement of
cash flows as cash flows from financing activities.
£m Note 1 September Financing cash flows New leases Disposals Other changes 30 August
2024 2025
Revolving credit facility 16 17.6 (16.7) - - 1.2 2.1
Leases 30.9 (8.9) 6.6 0.5 1.4 30.5
Total 48.5 (25.6) 6.6 0.5 2.6 32.6
£m Note 27 August 2023 Financing cash flows New leases Disposals Other changes 31 August
2024
Revolving credit facility 16 - 18.0 - - (0.4) 17.6
Term loan 16 40.2 (41.5) - - 1.3 -
Leases 23.2 (7.9) 11.2 - 4.4 30.9
Total 63.4 (31.4) 11.2 - 5.3 48.5
Other changes include rent increases, interest accruals and the amortisation
of loan fees.
Analysis of net debt
£m Note 2025 2024
Cash and cash equivalents* 16 8.2 7.0
Non-current borrowings 16 (1.7) (17.6)
Net borrowings 6.5 (10.6)
Lease liabilities 17 (30.5) (30.9)
Net debt (24.0) (41.5)
*Included within cash and cash equivalents is £2.8m (2024: £nil) of cash
held by the EBT for the purpose of purchasing own shares.
16. Financial instruments
Treasury policy
The Group operates a centralised treasury function to manage the Group's
funding requirements and financial risks in line with the Board-approved
treasury policies and procedures and their delegated authorities. The role of
Treasury is to ensure that cash financing is available for running the
businesses of the Group on a day-to-day basis, whilst minimising net interest
cost. No transactions of a speculative nature are undertaken. Dealings are
restricted to those banks with suitable credit ratings and counterparty risk
and credit exposure is monitored frequently.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be
able to continue as a going concern while maximising the return to
stakeholders through the optimisation of the debt and equity balance. The
capital structure of the Group consists of debt, which includes the
borrowings, cash and cash equivalents as disclosed in Note 15 and equity
attributable to equity holders of the parent, comprising issued capital,
reserves and retained earnings as disclosed in the Group statement of changes
in equity.
The only externally imposed capital requirements for the Group are Bank Net
Debt to Bank EBITDA and interest cover under the terms of the banking
facilities. The Group has fully complied during both the current and prior
periods. To maintain or adjust its capital structure, the Group may adjust the
dividend payment to shareholders and/or issue new shares. In the prior period
there was a cap on dividends of £10.0m under the banking facility; subject to
all the covenants. As part of the refinancing in May 2024, this restriction
was removed.
The Board regularly reviews the capital structure. As part of this review, the
Board considers the cost of capital, and the risks associated with each class
of capital. We expect free cash from operations to be sufficient to manage net
debt while also maintaining an attractive total shareholder return. The Group
is targeting a Bank Net Debt: Bank EBITDA ratio below 1.0x, achieved through
managing free cash from operations. The Group's facilities include a clause to
account for lease charges under accounting standards applicable in 2019; Bank
Net Debt: Bank EBITDA is stated on this basis.
Liquidity risk
The Group manages liquidity risk by maintaining adequate reserves and banking
facilities and by monitoring forecast and actual cash flows. The facilities
that the Group has at its disposal to further reduce liquidity risk are
described below.
As at 30 August 2025, the Group had £40.0m (2024: £40.0m) of committed bank
facilities in place, comprising a £40.0m revolving credit facility (RCF),
which expires on 2 May 2028.
The facility described above is subject to the following covenants:
· Leverage cover - the Bank Net (Cash)/Debt: Bank EBITDA ratio which must remain
below 2.5x. At 30 August 2025 the ratio was (0.1x) (2024: 0.3x);
· Interest cover - the consolidated net interest: Bank EBITDA ratio which must
remain above 4x. As at 30 August 2025 the ratio was 79x (2024: 17.9x); and
· Guarantor cover - the annual turnover, gross assets and pre-tax profits of the
guarantors under the banking facilities contribute, at any time, 90% or more
of the annual consolidated turnover, gross assets and pre-tax profits of the
Group for each period. The guarantors, which are all 100% owned or wholly
owned subsidiaries of Smiths News plc, comprise Smiths News plc, Smiths News
Holdings Limited, and Smiths News Trading Limited.
At 30 August 2025, the Group had available £36.4m (2024: £20.5m) of undrawn
committed borrowing facilities comprising the £37.9m (2024: £22.0m) RCF
above less letters of credit of £1.5m (2024: £1.5m). In addition, the
facility includes a £10m accordion facility option. There were no breaches of
loan agreements during either the current or prior periods.
As the Group is cash generative its liquidity risk is considered low. The
Group's cash generation allows it to meet all loan commitments as they fall
due as well as sustain a negative working capital position.
The Group invests significant resources in the forecasting and management of
its cash flows. This is critical given a routine cash cycle at Smiths News
that results in significant predictable swings within each month; the Group's
average gross borrowing for the period was £6.6m (2024: £26.7m). The Group
has available funding via the undrawn RCF and a £10m accordion facility
option.
The following is an analysis of the undiscounted contractual cash flows
payable under non-derivative financial liabilities. The undiscounted cash
flows will differ from both the carrying value and fair value. Floating rate
interest is estimated using the prevailing rate at the balance sheet date.
£m Due within 1 year Due between 1 and 2 years Due between 2 and 3 years Greater than 3 years Total
2025
Bank and other borrowings (2.1) - - - (2.1)
Trade and other payables (127.2) - - - (127.2)
Leases (7.8) (7.1) (6.0) (18.2) (39.1)
Total (137.1) (7.1) (6.0) (18.2) (168.4)
2024
Bank and other borrowings (18.0) - - - (18.0)
Trade and other payables (128.5) - - - (128.5)
Leases (7.6) (6.8) (6.0) (19.8) (40.2)
Total (154.1) (6.8) (6.0) (19.8) (186.7)
Counterparty risk
Dealings are restricted to those banks with suitable credit ratings and
counterparty risk and credit exposure is monitored.
Foreign currency risk
· The majority of the Group's transactions are carried out in the functional
currencies of its operations, and so transactional exposure is limited.
· The majority of the Group's net assets are held in Sterling, with £0.4m
(2024: £0.6m) of net assets held in overseas currencies. Translation exposure
arises on the retranslation of overseas subsidiaries' profits and net assets
into Sterling for financial reporting purposes and is not seen as significant.
· Note 15 denotes borrowings by currency, with no material currency exposures to
disclose.
Interest rate risk
The Group monitors its exposure to interest rate in light of the Group's debt
exposure, consideration of the macroeconomic environment and sensitivity to
potential interest rate rises. The Group avoids the use of derivatives or
other financial instruments in circumstances when the outcome would
effectively be largely dependent upon speculation on future rate movements.
The Group does not consider interest rate risk to be sensitive.
Credit risk
The Group considers its exposure to credit risk to be as follows:
£m 2025 2024
Bank deposits and money market funds 8.2 7.0
Trade and other receivables* 100.6 103.0
108.8 110.0
*Comparatives have been restated as detailed in Note 1(26).
Further detail on the Group's policy relating to trade receivables and other
receivables can be found in Note 13.
17. Leases
The balance sheet shows the following right-of-use assets in relation to
leases:
£m Equipment Land and buildings Total
and vehicles
Cost:
At 1 September 2024 1.5 49.2 50.7
Additions 1.2 5.6 6.8
Disposals (0.4) (4.2) (4.6)
At 30 August 2025 2.3 50.6 52.9
Accumulated depreciation:
At 1 September 2024 (0.9) (20.3) (21.2)
Depreciation charge (0.3) (6.2) (6.5)
Disposals 0.4 3.8 4.2
At 30 August 2025 (0.8) (22.7) (23.5)
Net book value at 30 August 2025 1.5 27.9 29.4
Cost:
At 27 August 2023 2.0 38.4 40.4
Additions 0.3 13.3 13.6
Disposals (0.8) (2.5) (3.3)
At 31 August 2024 1.5 49.2 50.7
Accumulated depreciation:
At 27 August 2023 (1.4) (17.2) (18.6)
Depreciation charge (0.3) (5.6) (5.9)
Disposals 0.8 2.5 3.3
At 31 August 2024 (0.9) (20.3) (21.2)
Net book value at 31 August 2024 0.6 28.9 29.5
Amounts recognised in respect of leases
£m 2025 2024
Interest expense (included in finance cost) 2.4 2.0
Expense relating to low-value leases (included in cost of sales and 0.6 0.5
administrative expenses)
Property rental income (0.2) (0.4)
Total cash outflow from leases 8.9 7.9
Maturity analysis of lease liabilities
£m 2025 2024
Current (5.6) (5.5)
Non-current (24.9) (25.4)
Total (30.5) (30.9)
Amounts recognised as lessor:
At the balance sheet date, the Group had contracted with tenants for the
following future minimum lease payments:
£m 2025 2024
Within one year 0.2 0.3
In the second to fifth years inclusive 0.2 0.6
0.4 0.9
18. Deferred tax
Deferred tax assets and liabilities are attributable to the following:
£m Fixed assets Share- based payments Other temporary differences Total
At 1 September 2024 - 0.9 0.4 1.3
Charge to income (0.3) (0.1) - (0.4)
Charge to equity - (0.1) - (0.1)
At 30 August 2025 (0.3) 0.7 0.4 0.8
Deferred tax assets - 0.7 0.4 1.1
Deferred tax liabilities (0.3) - - (0.3)
At 27 August 2023 0.4 1.0 0.3 1.7
(Charge)/credit to income (0.4) - 0.1 (0.3)
Charge to equity - (0.1) - (0.1)
At 31 August 2024 - 0.9 0.4 1.3
Deferred tax assets - 0.9 0.4 1.3
The deferred tax assets have been deemed recoverable as the Group forecasts
that it will continue to make profits against which the assets can be utilised
for tax purposes.
The Group has capital losses carried forward of £20.2m (2024: £20.2m).
Deferred tax assets of £5.1m (2024: £5.1m) have not been recognised in
respect of the capital losses carried forward due to the uncertainty of their
utilisation. These capital losses do not have an expiry period.
Deferred tax assets and liabilities at the period end have been calculated
based on the rate of 25% substantively enacted at the balance sheet date on
the basis that the temporary differences are expected to unwind when that rate
applies.
19. Provisions
£m Reorganisation provisions Insurance and legal provisions Property provisions Total
At 1 September 2024 (0.2) (0.5) (5.2) (5.9)
Transfer 0.1 (0.1) - -
Charged to income statement (0.1) (0.1) - (0.2)
Credited to income statement - - 0.2 0.2
Utilised in period 0.1 0.3 0.6 1.0
Unwinding of discount utilisation - - (0.2) (0.2)
At 30 August 2025 (0.1) (0.4) (4.6) (5.1)
£m 2025
Included within current liabilities (0.5)
Included within non-current liabilities (4.6)
Total (5.1)
Reorganisation provisions of £0.1m (2024: £0.2m) relate to the restructure
of the DMD business, the Smiths News network and the Group's support
functions.
Insurance and legal provisions represent the expected future costs of
employer's liability, public liability, motor accident claims and legal
claims; included within the total balance is £0.4m (2024: £0.5m) relating to
claims from the Tuffnells business prior to disposal.
The property provision represents the estimated future cost of dilapidation
costs across the Group. These provisions have been discounted to present value
and this discount will be unwound over the life of the leases. The provisions
cover the period to 2035 with all of the liability falling within ten years
and greater than one year.
The Group has performed sensitivity analysis on the property provision using
the possible scenarios below:
If the discount rate changes by +/- 0.5%, the property provision would change
by +/- £0.2m (2024: +/- £0.1m).
If the repair cost per square foot changes by +/-£1.00p, the property
provision would change by +/- £0.5m (2024: +/- £0.3m).
20. Contingent assets, liabilities and capital commitments
Bank and other guarantees
As at 30 August 2025, the Group had approved letters of credit of £1.5m
(2024: £1.5m) to the insurers of the Group for the motor insurance and
employer liability insurance policies. The letters of credit cover the
employer deductible element of the insurance policy for insurance claims.
Administration of Tuffnells Parcels Express Limited (Tuffnells)
As reported in Note 3, during the year the Company incurred £0.7m of legal
costs in considering and responding to two extensive enquiry requests (October
2024 and June 2025) from the Pensions Regulator (tPR) in relation to tPR's
ongoing investigation into the Tuffnells defined benefit pension scheme and
the Company's period of ownership of Tuffnells, which had concluded with its
sale in May 2020.
The Company has continued to engage with tPR after period end and understands
that the Company remains part of tPR's investigations as one of a number of
potential targets relevant to its regulatory powers under the Pensions Act
2004.
tPR are yet to issue a Warning Notice as at the date of these financial
statements, and it is not known when, or if it will be issued (up to tPR's
stated statutory deadline of 20 February 2026). The Board has nevertheless
considered the nature and circumstances of tPR's investigation to date and
concluded, at the date of authorisation of the financial statements, that no
provision is required, particularly given that no Warning Notice has been
issued, it remains uncertain at this time as to how tPR may proceed with the
information before it or whether any future obligation (including the nature
thereof) will arise at all, and the Company therefore does not currently have
a present obligation that could lead to an outflow of resources. Accordingly,
the Board has concluded that the matter represents a possible obligation only
and has disclosed a contingent liability.
tPR has communicated that the Tuffnells defined benefit scheme had an
estimated s75 liability of £3.355m (however the final certified liability is
yet to be confirmed) and that any Warning Notice, if issued, will be made
under its wide-ranging Financial Support Direction powers available to it
(which are based on a "no-fault" liability-regime).
With support of legal advice, the Board maintains the view that the Company
has acted reasonably throughout its time as parent of Tuffnells and notes that
it was an overall net contributor of funding to Tuffnells during its period of
ownership. The Company continues to make itself available to provide further
assistance to tPR as required.
Indemnity coverage
On winding up of the News Section of the WH Smith Pension Trust defined
benefit pension scheme in December 2021, the Company has agreed run-off
indemnity coverage for any member claims that were uninsured liabilities
capped at £6.5m over the following 60 years. The Group is not aware of any
claims brought during either the current or prior reporting period.
Reversionary lease
Other potential liabilities that could crystallise are in respect of the
previous assignment of a lease where the liability could revert to the Group
if the lessee defaulted. Pursuant to the terms of the Demerger Agreement from
WH Smith PLC in 2006, any such contingent liability in respect of assignment
prior to demerger, which becomes an actual liability, will be apportioned
between Smiths News plc and WH Smith PLC in the ratio 35:65 (provided that the
actual liability of Smiths News plc in any 12-month period does not exceed
£5m). The Company's share of the rental commitment at 30 August 2025 was
£0.9m (2024: £0.4m), which increased during the period following a review of
market rent. This lease is expected to end in 2033.
Capital commitments
Contracts placed for future capital expenditure approved by the Directors but
not provided for amount to £0.1m (2024: £2.2m).
21. Net cash inflow from operating activities
£m Note 2025
2024
Operating profit 3 41.2 40.0
Impairment reversal of investment in joint venture 11 - (0.3)
Share of loss of joint ventures 11 0.1 0.2
Depreciation of property, plant and equipment 10 2.5 2.2
Depreciation of right-of-use assets 17 6.5 5.9
Amortisation of intangible assets 9 0.5 0.4
Share-based payments 1.3 0.9
Decrease/(increase) in inventories 5.4 (4.4)
Decrease/(increase) in receivables 1.4 (1.0)
Decrease in payables (1.4) (12.2)
Decrease in provisions (0.8) (0.8)
Income tax paid (8.8) (8.5)
Refund of tax on pension surplus* 1.5 -
Net cash inflow from operating activities 49.4 22.4
Net cash flow from operating activities is stated after the following 3
adjusting items:
Recovery of McColls trade receivables 5.4 -
Refund of tax on pension surplus* 1.5 -
Tuffnells costs (1.0) (0.1)
Technology transformation costs (0.7) (0.1)
Network and reorganisation costs (0.1) (0.2)
Total adjusting items cash flow 5.1 (0.4)
*During the period, the Company received a £1.5m refund of an overpayment of
tax made in respect of the wind up of the News Section of the WH Smith Pension
Trust defined benefit pension scheme during FY2022. This amount has been
presented in other comprehensive income consistent with the original £5.1m
charge recognised during FY2022.
22. Share capital
(a) Share capital
£m 2025 2024
Issued, authorised and fully paid:
247.7m (2024: 247.7m) ordinary shares of 5p each 12.4 12.4
(b) Movement in share capital
Number (m) Ordinary shares of 5p each
At 31 August 2024 and at 30 August 2025 247.7
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at the general
meetings of the Company. The Company has one class of ordinary shares, which
carry no right to fixed income.
No shares were issued during the current or prior periods.
(c) Share premium
£m 2025 2024
At 31 August 2024 and at 30 August 2025 60.5 60.5
23. Reserves
(a) Demerger reserve
£m 2025 2024
At 31 August 2024 and at 30 August 2025 (280.1) (280.1)
The demerger reserve was created on demerger of the Group from WH Smith PLC in
2006. The balance represented the difference between the share capital and
reserves of the Group restated on a pro-forma basis as at 31 August 2004 and
the previously reported share capital.
(b) Own shares reserve
£m 2025 2024
At beginning of the period (3.7) (4.4)
Acquired in the period (1.6) (3.3)
Disposed of on exercise of options 2.4 4.0
At end of the period (2.9) (3.7)
The reserve represents the cost of shares in Smiths News plc purchased in the
market and held by the Smiths News Employee Benefit Trust (EBT) to satisfy
awards and options granted under the Group's Executive Share Schemes (see Note
24). The number of ordinary shares held by the EBT as at 30 August 2025 was
5,665,315 (2024: 8,031,253). In accordance with IAS 32, these shares are
deducted from shareholders' funds. Under the terms of the EBT, the Trustee has
waived all dividends on the shares it holds.
(c) Translation reserve
£m 2025 2024
At beginning of the period 0.2 0.4
Currency translation differences - (0.2)
At end of the period 0.2 0.2
24. Share-based payments
The Group recognised a total charge of £1.3m (2024: £0.9m) related to
equity-settled share-based payment transactions during the period. The average
share price throughout the period was 58.2p (2024: 51.5p).
The Group operates the following share incentive schemes:
Sharesave Scheme Under the terms of the Group Sharesave Scheme, the Board grants options to
purchase ordinary shares in the Company to eligible employees who enter into
an HM Revenue & Customs approved Save-As-You-Earn (SAYE) savings contract
for a term of three years. Options are granted at up to a 20% discount to the
market price of the shares on the day preceding the date of offer and are
normally exercisable for a period of six months after completion of the SAYE
contract.
LTIP Under the terms of the Group LTIP, executive directors and key senior
executives are awarded each year entitlements to ordinary shares in the
Company (which may be in the form of nil cost options or conditional awards)
or, in order to retain flexibility and at the Company's discretion, a cash sum
linked to the value of a notional award of shares up to a value of 200% of
base salary. The vesting of awards is subject to the satisfaction of
three-year performance conditions, which is determined by the Remuneration
Committee at the time of grant. Subject to the satisfaction of the performance
conditions, awards are normally exercisable until the tenth anniversary of the
date of grant.
Deferred Bonus Plan (DBP) Under the terms of the Group Deferred Bonus Plan, each year Executive
Directors and key senior executives are granted share awards (in the form of
nil cost options) dependent on the achievement of the Annual Bonus Plan
performance targets. Awards are immediately exercisable, but a two-year
hold-back period applies, during which the share certificate for such shares
is held by the Company. Separately, key senior executives may also be granted
share awards (in the form of nil cost options) under the DBP plan in respect
of a (discounted) restricted share award which are dependent on continued
employment with the Company.
Details of the options/awards are as follows:
Sharesave ESOS LTIP DBP
No. of shares Weighted average exercise price (p) No. of shares Weighted average exercise price (p) No. of shares Weighted average exercise price (p) No. of shares Weighted average exercise price (p)
At 26 Aug 2023 7,960,613 30.38 800,450 125.3 9,368,088 - 1,221,981 -
Granted 1,603,582 60.80 - - 2,994,040 - 1,389,805 -
Exercised (4,415,748) - - - (3,167,125) - (1,424,789) -
Expired/Forfeited (302,050) 42.83 (340,412) 189.5 (201,737) - (18) -
At 31 Aug 2024 4,846,397 50.75 460,038 153.9 8,993,266 - 1,186,979 -
Granted 1,270,955 61.60 - - 2,474,769 - 1,279,212 -
Exercised (1,347,405) - - - (2,261,850) - (1,323,209) -
Expired/Forfeited (327,398) 56.75 (460,038) 153.9 (2,988,807) - (28,967) -
At 30 Aug 2025 4,442,549 55.50 - - 6,217,378 - 1,114,015 -
Exercisable at 30 Aug 2025 - - - - - - - -
Exercisable at 31 Aug 2024 - - 460,038 153.9 - - - -
The weighted average remaining contractual life in years of options/awards is
as follows:
Sharesave ESOS LTIP DBP
Outstanding at 30 August 2025 1.7 - 1.2 1.6
Outstanding at 31 August 2024 1.0 0.3 1.2 1.6
Details of the options/awards granted or commencing during the period were as
follows:
Sharesave ESOS LTIP DBP
During 2025:
Effective date of grant or commencement date Jul 2025 - Dec 2024 Dec 2024
Average fair value at date of grant or scheme commencement - pence 11.9 - 43.5 60.6
During 2024:
Effective date of grant or commencement date Jul 2024 - Dec 2023 Dec 2023
Average fair value at date of grant or scheme commencement - pence 16.4 - 32.6 47.6
The options outstanding at 30 August 2025 had exercise prices ranging from nil
to 49.3p (2024: nil to 48.9p). The weighted average share price on the date of
exercise was 60.3p (2024: 45.4p).
Sharesave options granted during each period have been valued using the
Black-Scholes model. LTIP performance measures include a 60% (2024: 60%) total
shareholder return (TSR) metric which is valued by reference to the share
price at date of grant less an adjustment for the TSR portion of the award.
The DBP schemes are valued by reference to the share price at the date of
grant.
The inputs to the Black-Scholes model are as follows:
Sharesave LTIP DBP
2025 options/awards:
Share price at grant date - pence 61.6 61 61
TSR adjustment - pence - (29) -
Exercise price - pence 49.3 - -
Expected volatility - per cent 33.6 - -
Expected life - years 3 - -
Risk free rate - per cent 3.8 - -
Expected dividend yield - per cent 9.13 - -
Weighted average fair value - pence 11 43 60
2024 options/awards:
Share price at grant date - pence 60.8 48 48
TSR adjustment - pence - (25) -
Exercise price - pence 48.9 - -
Expected volatility - per cent 69.5 - -
Expected life - years 3 - -
Risk free rate - per cent 3.9 - -
Expected dividend yield - per cent 7.48 - -
Weighted average fair value - pence 16 33 48
25. Post balance sheet events
The Directors have considered the period between the balance sheet date and
the date when the accounts are authorised for issue for evidence of conditions
that existed at the balance sheet date, either adjusting or non-adjusting post
balance sheet events, and have concluded that there are no other events in the
current period.
26. Related-party transactions
Transactions between businesses within the Group which are related parties
have been eliminated on consolidation and are not disclosed in this note.
Trading transactions
Sales to related parties
£m 2025 2024
Joint ventures 0.4 0.4
Sales to related parties are for management fees and payment is due on the
last day of the month following the date of invoice. There were no amounts
owed by related parties in either period.
There were no non-trading transactions with related parties during either
period.
Directors' remuneration
£m 2025 2024
Salaries 0.9 0.8
Bonus 0.7 0.6
Non-executive director fees 0.4 0.4
2.0 1.8
Information concerning Directors' remuneration, interest in shares and share
options is included in the Directors' Remuneration report.
There are two (2024: two) Directors to whom retirement benefits are accruing
in respect of qualifying services under money purchase schemes.
Directors made gains on share options of £nil (2024: £nil).
Key management personnel (including directors)
The remuneration of the Directors and the Executive Leadership Team, who are
the key management personnel of the Group, is set out below in aggregate for
each of the categories specified in IAS 24 'Related Party Disclosures'.
£m 2025 2024
Short-term employee benefits 3.2 3.0
Share-based payments 0.9 0.8
4.1 3.8
27. Subsidiary and associated undertakings
The table below summarises the interests of the Group as at 30 August 2025:
Company name/ Share class Group % Company name/ Share class Group %
(number) (number)
United Kingdom
Rowan House, Cherry Orchard North, Kembrey Park, Swindon SN2 8UH
Connect Limited Ordinary Shares 100% Dawson Holdings Ltd (*) Ordinary Shares 100%
02008952 00034273
Connect Logistics Limited Ordinary Shares 100% Martin Lavell Limited Ordinary Shares 100%
09172965 02654521 (*)
Connect News & Media Limited Ordinary Shares 100% Pass My Parcel Limited Ordinary Shares 100%
08572634 09172022
Connect Parcel Freight Limited Ordinary Shares 100% Smiths News Holdings Limited Ordinary Shares 100%
09295023 04236079
Connect Parcels Limited Ordinary Shares 100% Smiths News Instore Limited Ordinary Shares 100%
09172850 03364589
Connect Services Limited Ordinary Shares 100% Smiths News Investments Limited (*) Ordinary Shares 100%
08522170 06831284
Connect Specialist Distribution Group Limited Ordinary Shares 100% Smiths News Distribution Limited Ordinary Shares 100%
08458801 08506961
Connect2U Limited Ordinary Shares 100% Smiths News Trading Limited Ordinary Shares 100%
03920619 00237811
Dawson Media Services Limited 06882722 Ordinary Shares 100% Dawson Limited Ordinary Shares 100%
03433262
Dawson Guarantee Company Limited 06882393 Ordinary Shares 100% Dawson Media Direct Limited (*) 06882366 Ordinary Shares 100%
Germany
Dawson Media Direct GmbH Ordinary Shares 100% Johannstr. 39 40476 Dusseldorf, Germany
HRB 96649
Thailand
Dawson Media Direct Company Limited Ordinary Shares 48.9% 87 M Thai Tower, All Seasons Place, 23rd Floor, Wittayu Road, Lumpini
Sub-District, Pathumwan District, Bangkok, Thailand
105558138385
*Audit exemption statement
For the 52 weeks ended 30 August 2025, the companies as indicated in the table
by '(*)' above were entitled to exemption from audit under section 479A of the
Companies Act 2006 relating to subsidiary companies. As such, Smiths News plc
has provided a guarantee against all debts and liabilities in these
subsidiaries as at 30 August 2025. The members of these companies have not
required them to obtain an audit of their financial statements for the 52
weeks ended 30 August 2025.
Structured entities
Further to the above, the Group consolidates the Smiths News Employee Benefit
Trust (EBT), a trust for the purpose of purchasing and holding shares in
Smiths News plc to satisfy share schemes. The trust is registered with and
administered by Computershare Trustees (Jersey) Limited (''the Trustee''), 13
Castle Street, St Helier, JE1 1ES, Jersey.
Smiths News plc
Company Balance Sheet
As at 30 August 2025
£m Note 2025 2024
Fixed assets
Investments in subsidiary undertakings 3 225.7 402.5
Current assets
Cash at bank and in hand 0.1 -
Debtors 4 - 30.6
Total assets 225.8 433.1
Current liabilities
Creditors: Amounts due within one year 5 (30.0) (229.8)
Net current liabilities (29.9) (199.2)
Net assets 195.8 203.3
Capital and reserves
Called up share capital 6(a) 12.4 12.4
Share premium account 6(c) 60.5 60.5
Retained earnings 7 122.9 130.4
Total shareholders' funds 195.8 203.3
The result for the period was a profit of £8.6m (2024: £18.9m).
These accounts were approved by the Directors on 3 November 2025.
Signed on behalf of the Board of Directors
Jonathan Bunting Paul Baker
Chief Executive Officer Chief Financial Officer
Registered number - 05195191
Company Statement of Changes in Equity
For the 52 weeks ended 30 August 2025
£m Note Share capital Share premium Retained earnings Total
Balance at 27 August 2023 12.4 60.5 122.3 195.2
Profit for the period and total comprehensive income - - 18.9 18.9
Dividend paid - - (10.8) (10.8)
Balance at 31 August 2024 and 1 September 2024 12.4 60.5 130.4 203.3
Share-based payments - - 1.3 1.3
Profit for the period and total comprehensive income - - 8.6 8.6
Dividend paid - - (17.4) (17.4)
Balance at 30 August 2025 12.4 60.5 122.9 195.8
Smiths News Plc
Notes to the Company balance sheet
1. Accounting policies
(a) Accounting convention
The separate financial statements of the Company are presented as required by
the Companies Act 2006. The Company meets the definition of a qualifying
entity under FRS 100 (Financial Reporting Standard 100) issued by the
Financial Reporting Council. Accordingly, the financial statements have been
prepared in accordance with FRS 101 (Financial Reporting Standard 101)
'Reduced Disclosure Framework' as issued by the Financial Reporting Council.
The Company has taken advantage of section 408 of the Companies Act 2006 not
to present a profit and loss account and related notes.
The Company has taken advantage of the following disclosure exemptions under
FRS 101:
· the requirements of paragraphs 10(d), 10(f), 39(c) and 134-136 of IAS 1
Presentation of Financial Statements;
· the requirements of IAS 7 Statement of Cashflows;
· the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes
in Accounting Estimates and Errors; and
· the requirements of IAS 24 Related Party Disclosures to disclose related party
transactions entered into between two or more members of a group, provided
that any subsidiary which is a party to the transaction is wholly owned by
such a member.
In addition, and in accordance with FRS 101, further disclosure exemptions
have been applied because equivalent disclosures are included in the Group
Financial Statements, including:
· the requirements of paragraphs 134(d)-134(f) and 135(c)-135(e) of IAS 36
Impairment of Assets;
· paragraphs 45(b) and 46 to 52 of IFRS 2, 'Share-based payment' (details of the
number and weighted average exercise prices of options, and how the fair value
of goods and services received was determined); and
· IFRS 7, 'Financial Instruments: Disclosures'.
The financial statements have been prepared on the historical cost basis. The
principal accounting policies adopted are the same as those set out in Note 1
to the Group Financial Statements except as noted below.
Critical accounting estimates and judgements
The preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and
various other factors that are considered to be reasonable under the
circumstances, the results of which form the basis of making judgements about
the carrying value of assets and liabilities which are not readily apparent
from other sources. Actual results may differ from these estimates. The
estimates and underlying assumptions are reviewed on an ongoing basis and any
revisions to them are recognised in the period in which they are revised.
Estimated impairment of investments
Investments are reviewed for impairment if events or changes in circumstances
indicate that the carrying amount may not be recoverable or where a previous
impairment has been recognised. When a review for impairment is conducted, the
recoverable amount (determined as the higher of value in use or fair value
less cost to sell) is determined using value in use calculations as the fair
value is not readily determinable.
The value in use method requires the Company to determine appropriate
assumptions in relation to the cash flow projections over the three-year plan
period (which is a key source of estimation uncertainty), the growth rate to
be applied beyond this three-year period and as part of the terminal value
calculation the post-tax discount rate used to discount the assumed cash flows
to present value. The assumption that cash flows continue into perpetuity is a
source of significant estimation uncertainty.
(b) Investments in subsidiary undertakings
Investments in subsidiary undertakings are held at historical cost less
provision for impairment.
(c) Financial instruments
Trade payables are measured at amortised cost.
Equity instruments issued by the Company are recorded at the proceeds
received, net of direct issue costs.
Financial assets and financial liabilities are recognised on the Company's
balance sheet when the Company becomes a party to the contractual provisions
of the instrument.
(d) Taxation
Current tax is provided at amounts expected to be paid (or recovered) using
the tax rates and laws that have been enacted or substantively enacted at the
balance sheet date.
(e) Employee Benefit Trust
The Smiths News Employee Benefit Trust holds shares of the Company for the
purpose of settling share-based payment plans for the Group's employees and is
deemed a subsidiary of the Company on the basis of control. Smiths News
Trading Limited, a subsidiary of the Company, provides funding to the trust
for this purpose and the amounts are recognised as a capital contribution by
the Company within investments. Any reduction from the purchase of shares is
treated as a repayment of capital contribution.
2. Result for the period
The Company has not presented its own profit and loss account as permitted by
section 408 of the Companies Act 2006. The result for the period attributable
to shareholders, which is stated on an historical cost basis, was a profit of
£8.6m (2024: profit of £18.9m). There were no other recognised gains or
losses. Dividends paid in the period totalled £17.4m (2024: £10.8m) (refer
to Note 7 of the Group financial statements).
3. Investments in subsidiary undertakings
At 30 August 2025, the carrying value of the Company's investment in
subsidiary was £225.7m (2024: £402.5m) with a cumulative impairment
provision of £460.2m (2024: £282.2m*).
£m 2025 2024*
Net book value:
At beginning of the period 402.5 383.6
Additions* 1.3 -
Impairment (charge)/reversal (178.1) 18.9
At end of the period 225.7 402.5
*Note: The comparative information for 2024 has been restated for to correct
the cumulative impairment from £260.4m to £282.2m which was previously
misstated in error. This disclosure error has no impact on net assets or
profit for the prior period. Additions relate to £1.3m invested by way of
capital contribution in respect of equity settled share-based payments
relating to employees of its subsidiaries.
During the period, a dividend of £186.7m was received from Smiths News
Holdings Limited (the Company's immediate subsidiary) which had the impact of
increasing retained earnings in the Company but lowering the net value in the
subsidiary. This reduction in net value, alongside the net book value of
investment versus the derived market capitalisation of the Group triggered an
impairment review.
The impairment review was based on the Group's value in use adjusted for net
debt and included a sensitivity analysis on the key inputs including the
discount rate and on scenarios which might affect the Group's future cash
flows.
As a result of the impairment review, the Directors concluded that it was
appropriate to increase the previously recognised cumulative impairment of
£282.2m by £178.1m representing the modelled estimate of the Group's value
in use being lower than the carrying amount of the Company's investment in
subsidiary largely driven by the £186.7m dividend which transferred value
from the Company's subsidiary during the period.
The Company reviewed the component cash flows within the Group during the
period in the light of management changes made, most notably the recruitment
of a Managing Director of Recycle within the growth verticals. These
components have therefore been updated to comprise Smiths News, Growth
verticals (Growth), and its joint venture investment in Rascal Solutions
Limited (Rascal). Dawson Media Direct group (DMD) was consolidated into Smiths
News.
The Company prepares cash flow forecasts derived from the most recent
three-year plan budget. Cash flows beyond this three-year period are
extrapolated using a terminal growth rate based on management's future
expectations.
The key assumptions in the value in use calculations were as follows:
2025 2024
Assumptions applied Smiths News Growth Rascal Smiths News Growth Rascal
Post-tax discount rate 9.8% 19.8% 11.8% 11.2% 11.2% 13.2%
Terminal value (decline)/growth rate (3%) 2% 2% 0% 0% 2%
The post-tax discount rates are derived from a risk-adjusted weighted cost of
capital using an average market participant capital structure, the inputs of
which include a UK risk free rate, risk premium, small company risk premium
and a risk adjustment (beta).
The market which Smiths News operates is in long-term structural decline and
it is assumed that revenue is expected to fall each year over the longer term.
This, in conjunction with updating the component cash flows, resulting in
moving to a terminal value decline of 3% (2024: 0%).
As disclosed in the accounting policies (see Note 1), the cash flows used
within the impairment model are based on assumptions which are sources of
estimation uncertainty and small movements in these assumptions could lead to
a change in the impairment loss. Management has performed sensitivity analysis
on the key assumptions in the impairment model using reasonably possible
changes in these key assumptions and in reference to the Company's principal
risks.
Impairment Impact to carrying value
£m
£m
Expected case (178.1) -
+1% Discount rate (192.0) (14.0)
-1% Discount rate (161.8) 16.3
+1% TGR (167.8) 10.2
-1% TGR (186.8) (8.7)
Scenario 1 (206.4) (28.4)
Scenario 2 (188.1) (10.0)
Scenario 1 - Assumes gross profit from newspapers and magazines is reduced by
3%
Scenario 2 - Assumes profit from growth initiatives is reduced by 50%.
4. Debtors
£m 2025 2024
Amounts owed by subsidiary undertakings - 30.6
Amounts owed by subsidiary undertakings are repayable on demand, unsecured,
non-interest bearing and settled in cash.
5. Net current liabilities
£m 2025 2024
Amounts owed to subsidiary undertakings (30.0) (229.8)
Amounts owed to subsidiary undertakings are repayable on demand, unsecured,
non-interest bearing and typically settled in cash. During the period a
restructure of intercompany positions was performed. This included the receipt
of an intercompany dividend of £186.7m from Smiths News Holdings Limited, a
subsidiary of the Company.
6. Share capital
(a) Share capital
£m 2025 2024
Issued and fully paid ordinary shares of 5p each
At 31 August 2024 and at 30 August 2025 12.4 12.4
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at the meetings of
the Company. The Company has one class of ordinary shares, which carry no
right to fixed income.
(b) Movement in share capital
Number (m) Ordinary shares of 5p each
At 31 August 2024 and at 30 August 2025 247.7
(c) Share premium
£m
At 31 August 2024 and at 30 August 2025 60.5
7. Directors' emoluments and employees
The Company engaged five (2024: five) Non-Executive Directors. Smiths News
Trading Limited, an indirect subsidiary, pays all remuneration without
recharge for all Directors and the amounts are disclosed within the Directors'
Remuneration Report.
Glossary - Alternative performance measures
Introduction
In the reporting of financial information, the Directors have adopted various
alternative performance measures (APMs).
These measures are not defined by International Financial Reporting Standards
(IFRS) and therefore may not be directly comparable with other companies'
APMs, including those in the Group's industry.
APMs should be considered in addition to, and are not intended to be a
substitute for, or superior to, IFRS measurements.
Purpose
The Directors believe that these APMs assist in providing additional useful
measures of the Group's performance. They provide readers with additional
information on the performance of the business across periods which is
consistent with how the business performance is planned by, and reported to,
the Board and the Executive Leadership Team.
Consequently, APMs are used by the Directors and management for performance
analysis, planning, reporting and incentive-setting purposes.
APM Closest equivalent Adjustments to reconcile Note/page reference for Definition and purpose
IFRS measure to IFRS measure reconciliation
Income statement
Adjusting items No direct equivalent N/A Note 3 Adjusting items of income or expense are excluded in arriving at adjusted
operating profit to present a further measure of the Group's performance. Each
Adjusting item is considered to be significant in nature and/or quantum,
non-recurring in nature and/or unrelated to the Group's ordinary activities or
consistent with items treated as adjusting in prior periods. Excluding these
items from profit metrics provides readers with helpful additional information
on the performance of the business across periods because it is consistent
with how the business performance is planned by, and reported to, the Board
and the Executive Team.
Adjusted operating profit Operating profit* Adjusting items Income statement/ Adjusted operating profit is defined as operating profit excluding the impact
of adjusting items is the headline measure of the Group's performance and a
Note 3 key management incentive metric.
Adjusted profit before tax Profit before tax (PBT) Adjusting items Income statement/ Adjusted profit before tax is defined as profit before tax excluding the
impact of adjusting items.
Note 3
Adjusted profit after tax Profit after tax (PAT) Adjusting items Income statement/ Adjusted profit after tax is defined as profit after tax from continuing
operations, excluding the impact of adjusting items.
Note 3
Adjusted Operating profit* Depreciation and amortisation This measure is based on business unit operating profit from continuing
operations. It excludes depreciation, amortisation and adjusting items.
EBITDA Adjusting items
Bank EBITDA Operating profit* Depreciation and amortisation This measure is based on business unit operating profit from continuing
operations. It excludes depreciation, amortisation, adjusting items and adds
Adjusting items back operating lease charges under accounting standards applicable in 2019 and
share-based payments expense. This measure is used to calculate compliance
Operating lease charges with banking covenants.
Adjusted earnings per share Earnings per share Adjusting items Note 8 Adjusted earnings per share is defined as Adjusted PBT, less taxation
attributable to Adjusted PBT and including any adjustment for minority
interest to result in adjusted PAT attributable to shareholders; divided by
the basic weighted average number of shares in issue.
Cash flow statement
Free cash flow Net movement in cash and cash equivalents Dividends, acquisitions and disposals, repayment of bank loans, EBT share Free cash flow is defined as the movement in cash and cash equivalents
purchases excluding the following: payment of dividends, the impact of acquisitions and
disposals, the repayment of bank loan principal amounts, outflows for
purchases of own shares (EBT share purchases) and cash held by the EBT. This
measure reflects the cash available to the Group, which can be used for
investments, dividends and the reduction of debt.
Free cash flow (excluding adjusting items) Net movement in cash and cash equivalents Dividends, acquisitions and disposals, repayment of bank loans, EBT share Free cash flow (excluding adjusting items) is free cash flow adding back the
purchases, pension deficit repair payments adjusting items cash impact of adjusting items.
Balance sheet
Bank Net Cash/Debt Borrowings less cash Cash flow statement Bank net debt is calculated as total debt less cash and cash equivalents.
Total debt includes loans and borrowings excluding unamortised arrangement
fees, overdrafts and obligations under finance leases under accounting
standards applicable in 2019.
Net debt Borrowings less cash Cash flow statement Net debt is calculated as total debt less cash and cash equivalents. Total
debt includes loans and borrowings, overdrafts and obligations under leases.
*Operating profit is presented on the Group income statement. It is not
defined per IFRS, however, is a generally accepted profit measure.
Reconciliation of free cash flow to net movement in cash and cash equivalents
£m 2025 2024
Net increase/(decrease) in cash and cash equivalents 1.2 (30.3)
Net decrease in borrowings 15.9 23.5
Movement in borrowings and cash 17.1 (6.8)
Dividend paid 17.4 10.8
Outflow for purchase of own shares by EBT 1.6 3.3
Total free cash flow 36.1 7.3
Reconciliation of bank net cash/debt to reporting net debt
£m 2025 2024
Bank net cash/(debt) 3.3 (11.0)
Unamortised arrangement fees (Note 15) 0.4 0.4
IFRS 16 lease liabilities (Note 17) (30.5) (30.9)
Net debt (Note 15) (26.8) (41.5)
Reconciliation of adjusted operating profit to Bank EBITDA
£m Note 2025 2024
Operating profit 41.2 40.0
Adjusting items 3 (2.1) (0.9)
Adjusted operating profit 39.1 39.1
Depreciation 2 2.5 2.2
Amortisation 2 0.5 0.4
Right-of-use asset depreciation 2 6.5 5.9
Adjusted EBITDA 48.6 47.6
Operating lease charges 2 (8.3) (8.3)
Exclude: Share based payments expense 4 1.3 0.9
Bank EBITDA 41.6 40.2
1 (#_ftnref1)
https://www.gov.uk/guidance/simpler-recycling-workplace-recycling-in-england
(https://www.gov.uk/guidance/simpler-recycling-workplace-recycling-in-england)
2 (#_ftnref2)
https://www.gov.uk/guidance/deposit-return-scheme-drinks-producer-and-retailer-responsibilities
(https://www.gov.uk/guidance/deposit-return-scheme-drinks-producer-and-retailer-responsibilities)
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