REG - Smiths News PLC - Interim Results as at 28 February 2026
Today 07:00
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RNS Number : 1212D Smiths News PLC 06 May 2026
6 May 2026
Smiths News PLC
("Smiths News" or the "Company")
Interim Results for the 26 weeks ended 28 February 2026
- Solid trading performance with full year results expected to be in line
with market expectations*
- Men's Football World Cup and growth verticals underpin forward momentum
- Interim dividend of 1.75 pence per share due to be paid on 3 July 2026
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
interim results for the 26 weeks ended 28 February 2026 (the "Period" or
"HY2026").
Financial highlights:
· The business delivered a solid performance in the Period with results expected
to be in line with market expectations for the full year*
o Revenues of £515.7m (-3.9% versus HY2025), in line with broader print market
dynamics and historic norms
o Adjusted operating profit of £18.3m (HY2025: £19.4m) and adjusted profit
after tax of £12.7m (HY2025: £13.1m), reflecting the annualisation of
National Insurance Contributions and ongoing investments in the cost base,
including technology
· Investment in growth verticals continues, delivering 35% revenue growth in the
Period, principally driven by the Recycling division, with revenues up over
50%
· On track to deliver in excess of £4m of operational efficiencies in FY2026
· Strong free cash flow of £21.2m, generated in line with expectations and
includes a working capital benefit in the Period of £7.6m
· Interim dividend of 1.75 pence per share (HY2025: 1.75 pence) due to be paid
on 3 July 2026
£m 26 weeks to 26 weeks to Change
28 February 2026 1 March
2025
Adjusted results( (1))
Revenue 515.7 536.4 (3.9%)
Operating profit 18.3 19.4 (5.7%)
Profit after tax 12.7 13.1 (3.1%)
Earnings per share 5.2p 5.4p (3.7%)
Statutory results
Revenue 515.7 536.4 (3.9%)
Operating profit 17.7 20.0 (11.5%)
Profit after tax 12.2 13.5 (9.6%)
Earnings per share 5.0p 5.6p (10.7%)
Interim dividend per share 1.75p 1.75p -
Cash flow and net cash/debt
Free cash flow ((2)) 21.2 13.3 59.4%
Bank Net Cash/(Debt) ((3)) 7.8 (12.4) 162.9%
Average Bank Net Cash/(Debt) 16.2 (1.1) 1,572.7%
Business Highlights:
· Newspapers and magazines revenues performed in line with historic norms, with
good contribution from collectables and growth vertical revenue streams
· 96% of newspapers and magazines revenues secured to 2029 (HY2025: 91%),
following the successful renewal of a long-term contract with the Guardian
Newspaper Group
· Sustained demand across collectables market, supported by continued interest
in UK football and Pokémon collections
· Ongoing progress advancing growth verticals, including working with brokers to
generate higher recycling volumes and onboarding an international optical and
hearing care provider for overnight delivery services
· Internal investment programme progressing as planned, enhancing customer
service and operational efficiency across all verticals, with fleet-wide
transport management system implementation scheduled to commence in H2 2026
Outlook:
· The Company has delivered a solid first half of trading in the current
financial year and expects to deliver full year results in line with current
market expectations*
· Newspapers and magazines remain resilient, with strong collectables
performance, improving contribution from growth verticals, and further
efficiency gains expected in H2 2026
· Positive H2 outlook, supported by growth verticals and demand-drivers,
including the Pokémon 30th anniversary collection and the FIFA Men's Football
World Cup
Jonathan Bunting, Chief Executive Officer of Smiths News, commented:
"We are pleased to report a solid start to the financial year, with positive
momentum across the business.
Our newspaper and magazine operations continue to perform in line with
expectations, while opportunities in our growth verticals are gaining
traction. During the Period, we secured our largest book delivery contract to
date and made further progress in expanding our recycling activities.
Importantly, we have now secured 96% of our existing publisher contract
revenues through to 2029. This includes the recent renewal of a long-term
contract with the Guardian Newspaper Group, further strengthening our revenue
visibility and supporting our commitment to delivering high-level service to
our newspapers and magazines customers and sustained value for all
stakeholders."
* Prior to this announcement, the Company determines that consensus market
expectation for FY2026 is adjusted operating profit of £37.2m.
Retail Investor Presentation
Smiths News' management team will provide a webcast presentation of the
Company's half year results at 12.00 p.m. today, Wednesday 6 May 2026. The
presentation is open to all existing and potential shareholders.
The presentation will be hosted on the Investor Meet Company platform, where
questions can be submitted at any time during the presentation. Investors can
register for free and subscribe to alerts on Smiths News by visiting: Smiths
News IMC meeting
(https://www.investormeetcompany.com/smiths-news-plc/register-investor)
For further information, please contact:
Smiths News PLC via Vigo Consulting
Jonathan Bunting, Chief Executive Officer
Richard Clay, 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 newspapers 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 consolidated
interim financial statements as Adjusted results:
a. Adjusted operating profit - is defined as operating profit excluding
Adjusting items.
b. Adjusted profit before tax (PBT) - is defined as profit before tax before
the impact of Adjusting items.
c. 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 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
presenting 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 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 interim 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 consolidated interim income statement.
(2) Free cash flow - is defined as the movement in cash and cash equivalents
excluding the following: the payment of dividends, the impact of acquisitions
and disposals, the repayment of bank loan principal amounts and RCF
repayments, and outflows for purchases of own shares (EBT share purchases).
This measure reflects the cash available to the Group, which can be used for
investments, dividends and/or the reduction of debt.
(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 (excluding cash held by the Employee Benefit Trust (EBT)). Total
cash/(debt) includes loans and borrowings (excluding amortised arrangement
fees), 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 the Interim Financial Results
for the half-year ended 28 February 2026 and the Report and Accounts for the
year 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
Smiths News delivered a solid performance across HY2026 with trading in line
to meet market expectations for the full year. The newspapers and magazines
business generated solid revenues, alongside pleasing progress from our growth
verticals with a marked improvement in revenue in the Period. The Company
remains confident about trading across the remainder of the current financial
year, supported by growth verticals and demand drivers including the Pokémon
30(th) anniversary collection and the FIFA Men's Football World Cup.
Solid delivery from newspapers and magazines business
Newspapers and magazines delivered a resilient performance, providing the
business with high quality, predictable revenues and the infrastructure and
network from which to further expand reach. The newspapers and magazines
activity remains the mainstay of Smiths News and the Company remains committed
to delivering service excellence and sustaining partner relationships, which
are central to maintaining longer-term demand.
Following the Period end, the Company announced it had successfully renewed a
long-term contract with the Guardian Newspaper Group, covering all of Smiths
News' current distribution territories in the UK. As a result, Smiths News has
now secured long-term contracts with 96% of its current newspapers and
magazine revenues through to 2029.
The Company continued to see a strong performance in the collectables market
in the Period, particularly the Pokémon range, having successfully secured
distribution of the range to additional stores of four major UK national
supermarket chains.
Additionally, the Company has initiated a small-scale trial around the
distribution of other Japanese anime cards, assessing the viability and market
appetite to extending our collectables offering.
The ongoing strength of the collectables market is expected to continue into
the second half of the year, supported by the upcoming FIFA Men's Football
World Cup, which typically drives a seasonal spike in collectables sales, and
the 30(th) anniversary of Pokémon, which occurred on 27 February 2026.
Continued progress with growth verticals
The Company is focused on broadening its early-morning supply chain management
expertise and leveraging its existing infrastructure to overlay products and
additional services across Smiths News' established UK footprint.
Ongoing progress has been made within the Group's Recycling, New Categories
and Final Mile activities, delivering an increase in revenues of 35% versus
HY2025. Smiths News continues to invest in, develop and support the growth
verticals, generating positive momentum as we move into the second half of the
year.
Within Recycling, we have continued to see strong demand from our customers,
with an increase in revenue of more than 50% compared with HY2025.
We previously announced the appointment of Adam Wylie as Managing Director of
Recycling. Adam joined Smiths News in August 2025 and is now driving the
strategic direction of the Recycling vertical. Having reviewed the results of
the small-scale trial undertaken last year, it was concluded that the most
effective route to market to secure new customers is through partnering with
waste brokers. As a result, strengthening relationships with key waste brokers
remains a strategic focus for the team to drive uptake of our services, with
Smiths News now undertaking activities with six different national brokers.
Alongside the new waste brokers, the Company has also embarked on a number of
new initiatives to optimise the network and drive penetration. Initially
focused on a small subset of customers, the Company is exploring the provision
of vape recycling services, WEEE recycling services and is also trialling
coffee cup collections with a leading national high street coffee shop. Smiths
News also successfully introduced a marginal price increase with customers in
January 2026.
Additionally, Smiths News is working to understand the opportunity for further
growth from the expected introduction of further regulation, including the
Deposit Return Scheme ("DRS"), which the UK Government is currently aiming to
introduce across England, Scotland and Northern Ireland in October 2027. 1
(#_ftn1)
The Company continues to make ongoing progress with its book distribution
services, with our teams now delivering approximately 30,000 books per week to
existing customers. Smiths News already provides this service to a number of
leading supermarket chains, and is well-placed to further expand its customer
base in this area going forward. Given the volume of books now being processed
by the Company, we are evaluating the introduction of solutions that would
drive efficiencies by automating certain stages of the process in this
vertical.
Additionally, the Company has secured a multi-year contract with an
international provider of optical and hearing care services, to provide
through-the-night delivery, six days a week, to their national network of over
580 stores. It is anticipated that Smiths News will be making over 1,600 drops
per week to these stores by the end of the financial year.
Internal investment programme
The Company's internal investment programme continues to plan. The investment
programme seeks to optimise warehouse operations and enhance existing
capabilities, future proofing the business and ensuring continued service
delivery to existing customers. Furthermore, the investment in technology and
systems will provide the foundations to enable delivery of additional
contracts across growth verticals.
We have continued to invest in our transport management system in HY2026, with
rollout and implementation expected to start in the second half of the year.
The new system will enhance client and retailer delivery communications and
see the introduction of variable routing capability.
Operational efficiencies
Smiths News continues to drive operational efficiencies through its focus on
streamlining operations and reducing variable costs aligned with volume
decline. It remains on track to deliver cost savings in excess of £4.0m in
FY2026.
Cash position
The Company continues to maintain strong levels of cash generation, supported
by the resilient performance of our newspaper and magazine business.
In HY2026, the business reported £21.2m of free cash flow (HY2025: £13.3m)
which included a £7.6m working capital timing benefit (HY2025 £2.5m
outflow).
People
In February 2026, we welcomed Richard Clay as Chief Financial Officer,
following the departure of Paul Baker in November 2025. We would like to thank
George Cooper, who assumed the role of interim Chief Financial Officer, and
has now reassumed his position as Group Financial Controller. Richard brings
extensive experience in finance roles, and we are pleased to welcome him to
Smiths News.
We would also like to thank our colleagues across Smiths News for their
ongoing commitment to service excellence in a complex and time-critical
market. The Company remains focused on investing in the continued professional
development of its people and maintaining a positive, inclusive culture that
supports employee wellbeing, engagement, and long-term performance.
Pensions Regulator
On 20 February 2026
(https://otp.tools.investis.com/clients/uk/smiths_news1/rns/regulatory-story.aspx?cid=786&newsid=2035504)
, Smiths News received a Warning Notice from the UK Pensions Regulator ("tPR")
in relation to its ongoing investigation into the former Tuffnells Parcels
Express Pension Scheme ("Tuffnells Scheme"), explaining that tPR is
considering issuing a Financial Support Direction ("FSD") against Smiths News
in relation to the Tuffnells Scheme. It is too early to know if an FSD will be
issued, or the amount or form of any such support.
The Board maintains the view that Smiths News acted reasonably throughout its
time as parent of Tuffnells and that it was an overall net contributor of
funding to Tuffnells during its period of ownership. The group continues to
disclose a contingent liability in respect of the investigation, which can be
found in Note 9 to the interim financial statements.
Dividend
Reflecting the Board's ongoing confidence in Smiths News, an interim dividend
of 1.75p per share will be paid on 3 July 2026 (HY2025: 1.75p per share) to
shareholders on the register on 5 June 2026. The ex-dividend date will be 4
June 2026.
In line with our capital allocation policy, the Company commits to paying a
sustainable ordinary dividend to shareholders, maintaining 2x dividend cover,
and will make further returns to shareholders when appropriate and prudent to
do so.
Outlook
The Company has delivered a solid first half of FY2026 and expects to deliver
full year results in line with market expectations.
Our newspapers and magazines activities remain solid, with collectables
performing strongly, alongside increased contribution from growth verticals,
and a positive impact from operational efficiencies to be delivered in the
second half.
Looking ahead to the second half, we have positive trading momentum across the
business, including an increasing contribution from our growth verticals. In
addition, the Pokémon 30(th) anniversary and the upcoming FIFA Men's Football
World Cup positions us to benefit from heightened demand for collectables.
FINANCIAL REVIEW
Overview
The Company has traded well in the first half of the year and is trading in
line with full year expectations. Adjusted operating profit of £18.3m
(HY2025: £19.4m) was behind last year, due to the increases to National
Insurance Contributions and ongoing investments in the cost base. The Company
has continued to generate good levels of cash flow with Average Bank Net Cash
of £16.2m in the period compared to Average Bank Net Debt of £1.1m in
HY2025, noting that dividends of £16.7m were paid at the end of the period in
February 2026.
Revenue of £515.7m (HY2025: £536.4m) was down 3.9% on the prior period,
within the historic range of -3% to -5%, with lower volumes of newspapers and
magazines once again offset by the benefits of cover price increases and
increased sales of collectables.
Adjusted operating profit was £1.1m lower than the prior period (HY2026:
£18.3m; HY2025: £19.4m) due to the annualisation of National Insurance
Contributions since last April and ongoing investments in the cost base. The
performance of collectables, including Pokémon, and the benefit of cost
reduction plans continue to offset the impact of inflation and lower income
from newspapers and magazines. Adjusted operating profit is second-half
weighted in FY2026, supported by the FIFA Men's Football World Cup trading
card and sticker collections in H2.
Adjusted profit before tax was £0.7m lower (HY2026: £17.0m; HY2025:
£17.7m), as the decrease in operating profit was partially offset by lower
net finance costs (HY2026: £1.3m; HY2025: £1.7m) which were the result of
lower borrowings and an average cash position.
Adjusted profit after tax decreased from £13.1m to £12.7m and adjusted EPS
has decreased by 4% from 5.4p to 5.2p.
Statutory profit after tax was £12.2m (HY2025: £13.5m) and included a net
cost from adjusting items of £0.5m (HY2025: £0.4m credit). Adjusting items
in the period consisted mainly of technology investment costs of £0.3m,
strategic project costs of £0.2m and professional fees of £0.1m in relation
to the Pension Regulator's review of the Tuffnells defined benefit pension
scheme. The prior period included the benefit of dividends from the McColls
administrator. Statutory EPS decreased by 11% from 5.6p to 5.0p due to these
factors.
Free cash flow was £21.2m (HY2025: £13.3m), including a working capital
timing benefit which was £10.1m higher than last year, offset by a £0.6m
outflow from adjusting items compared to a £2.1m inflow in HY2025. The flows
in the prior period included £1.6m from the first dividend from the McColls
administrator and a £1.5m tax refund in respect of the buyout and winding up
of the News Section of the WH Smith defined benefit pension scheme.
Average Bank Net Cash for the period improved from £1.1m (debt) in HY2025 to
£16.2m (cash). Dividends totalling £16.7m were paid in February near the end
of the period. Bank Net Debt improved by £20.2m from £12.4m (debt) at HY2025
to £7.8m (cash).
An interim dividend of 1.75p (HY2025: 1.75p) per share (£4.3m) is proposed to
be paid in July 2026.
Adjusted results
Group
£m 26 weeks to 26 weeks to Change
28 Feb 2026 1 Mar 2025
Revenue 515.7 536.4 (3.9%)
Operating profit 18.3 19.4 (5.7%)
Net finance costs (1.3) (1.7) 23.5%
Profit before tax 17.0 17.7 (4.0%)
Taxation (4.3) (4.6) 6.5%
Effective tax rate 25.3% 26.0% 0.7%
Profit after tax 12.7 13.1 (3.1%)
Revenue
Revenue was £515.7m (HY2025: £536.4m), down 3.9% on the prior period, with
lower newspaper and magazine volumes offset by cover price increases and
increased sales of trading card and sticker collectables.
Newspaper revenues declined by 4.5% (HY2025: 0.4% decrease). Magazine revenue
was 3.6% lower (HY2025: 4.6% lower). Both remain in line with our long-term
planning assumption and continue to drive the overall 3.9% variance as they
make up over 90% of total revenue. Revenue from collectables increased by
13.3% (HY2025: 4.3% increase), underpinned by the ongoing popularity of
Pokémon.
Revenue from growth activities increased by 35.1% (HY2025: 25.3%) largely as a
result of additional revenues from our recycle propositions.
Operating profit
Adjusted operating profit decreased by £1.1m to £18.3m (HY2025: £19.4m),
driven by the following items:
· Improved contribution from sales of collectables which offset the
impact of reduced contribution from newspapers and magazines.
· Cost reduction plans within depot and overheads (+£1.9m) which
partially offset inflationary increases (total -£2.5m), which included the
£0.6m impact of increases to National Insurance Contributions.
· Additional technology and other investments in the cost base of
£0.5m.
Profit after tax
Net finance costs of £1.3m (HY2025: £1.7m) were lower than the prior period,
benefitting from a period of Average Bank Net Cash. Taxation of £4.3m was
£0.3m lower than the prior period due to lower levels of profit. As a result,
profit after tax of £12.7m (HY2025: £13.1m) was £0.4m lower than last year.
Statutory Results
Group
£m 26 weeks to 26 weeks to Change
28 Feb 2026 1 Mar 2025
Revenue 515.7 536.4 (3.9%)
Operating profit 17.7 20.0 (11.5%)
Net finance costs (1.3) (1.7) 23.5%
Profit before tax 16.4 18.3 (10.4%)
Taxation (4.2) (4.8) 12.5%
Effective tax rate 25.6% 26.2% 0.6%
Profit after tax 12.2 13.5 (9.6%)
Statutory profit after tax of £12.2m was a £1.3m decrease on the prior
period (HY2025: £13.5m). The decrease was driven by the £0.4m decrease in
Adjusted profit after tax described above, and a £0.9m difference in
adjusting items after tax of (HY2026: cost of £0.5m, HY2025: credit of
£0.4m) driven by a credit in the prior year relating to receipts from the
McColls administrator not repeated.
Earnings per share
Adjusted Statutory
26 weeks to 28 Feb 2026 26 weeks to 26 weeks to 28 Feb 2026 26 weeks to
28 Feb 2026
1 Mar 2025
28 Feb 2026
1 Mar 2025
Earnings attributable to ordinary shareholders (£m) 12.7 13.1 12.2 13.5
Basic weighted average number of shares (millions) 244.1 242.5 244.1 242.5
Basic Earnings per share 5.2p 5.4p 5.0p 5.6p
Diluted weighted number of shares (millions) 252.1 252.0 252.1 252.0
Diluted Earnings per share 5.0p 5.2p 4.8p 5.4p
Adjusted basic earnings per share decreased by 0.2p to 5.2p (HY2025: 5.4p),
driven by a decrease in profit after tax and by a decrease in the weighted
average number of shares held by the employee benefit trust.
Statutory basic earnings per share decreased by 0.6p to 5.0p (HY2025: 5.6p) as
it includes the impact of adjusting items which was a cost of £0.5m (HY2025:
net credit of £0.4m).
Dividend
26 weeks to 26 weeks to
28 Feb 2026 1 Mar 2025
Dividend per share (proposed) 1.75p 1.75p
Dividend per share (paid and recognised) 6.80p 5.40p
The Board is proposing an interim dividend of 1.75p per share (HY2025: 1.75p
per share). The proposed dividend will be paid on 3 July 2026 to shareholders
on the register at close of business on 5 June 2026. The ex-dividend date will
be 4 June 2026.
The FY2025 final ordinary dividend of 3.8p per share (£9.3m) and special
dividend of 3.0p (£7.4m) were approved by shareholders at the Annual General
Meeting on 29 January 2026, paid on 5 February 2026 and recognised in these
Interim Financial Statements.
Adjusting items
£m 26 weeks to 26 weeks to
28 Feb 2026 1 Mar 2025
Technology transformation costs (0.3) (0.4)
Transformation programme planning costs (0.2) -
Tuffnells costs (0.1) (0.6)
Network and reorganisation costs - (0.1)
Impairment of receivables - McColl's - 1.7
Total before taxation (0.6) 0.6
Taxation 0.1 (0.2)
Total after taxation (0.5) 0.4
Adjusting items after tax were costs of £0.5m (HY2025: net credit of £0.4m).
In the period, the Company incurred £0.3m of technology transformation costs,
£0.2m of consultancy fees in respect of a strategic recycling project, and
£0.1m of professional fees in responding to the Pensions Regulator (tPR) in
respect of its formal investigation into the Tuffnells defined benefit pension
scheme.
In the prior period, Tuffnells costs of £0.6m related to the responding to
tPR's investigation, Technology transformation costs of £0.4m were incurred
in respect of implementing enhanced technology infrastructure, and £0.1m of
costs arose in relation to simplifying the Group structure. The Company also
recognised a £1.7m impairment reversal of the provision for McColl's
receivables following notification of a second dividend by the administrator.
The second dividend and third (final) dividends were received in cash during
the second half of FY2025.
Further information on these items can be found in Note 3 to the Interim
Financial Statements. Adjusting items are defined in the Glossary to the
Interim 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 26 weeks to 26 weeks to
28 Feb 2026 1 Mar 2025
Adjusted operating profit 18.3 19.4
Depreciation and amortisation 4.7 4.6
Adjusted EBITDA 23.0 24.0
Working capital movements 7.6 (2.5)
Capital expenditure (0.9) (2.3)
Lease payments (3.0) (3.3)
Net interest and fees (1.2) (1.6)
Taxation (4.2) (3.6)
Other 0.5 0.5
Free cash flow (excluding Adjusting items) 21.8 11.2
Adjusting items (cash effect) (0.6) 2.1
Free cash flow 21.2 13.3
Free cash flow of £21.2m (HY2025: £13.3m) was £7.9m higher, driven by a
£10.1m improvement in working capital flows and £1.4m lower capital
expenditure, and offset by £1.1m lower adjusted operating profit and £2.7m
from adjusting items.
The working capital inflow of £7.6m (HY2025: outflow of £2.5m) since year
end is due to the timing of period end compared to the billing cycles of both
publishers and retailers as well as beneficial terms on collectables.
Capital expenditure in the period was £0.9m (HY2025: £2.3m), a decrease of
£1.4m driven by the timing of investment in technology, warehouses and
offices.
Lease payments of £3.0m (HY2025: £3.3m) decreased by £0.3m in line with
lease renewals.
Net interest and fees of £1.2m (HY2025: £1.6m) decreased by £0.4m, due to
an improved Average Bank Net Cash position in the current period.
Tax paid of £4.2m (HY2025: £3.6m) was a £0.6m increase, owing to a refund
of corporation tax received in the prior period.
Other items relate to non-cash share-based payment expenses and are linked to
the expected outcome of performance related share schemes.
The total net cash impact of other Adjusting items was an outflow of £0.6m
(HY2025: inflow of £2.1m). In the current period, outflows include £0.3m of
technology investments and £0.1m of professional fees in respect of the
Pensions Regulator's investigation into the Tuffnells pension scheme and
settlement of insurance claims.
In the prior period, there were two significant inflows; £1.6m was received
from the McColls administrators as a first dividend, and a £1.5m tax refund
in respect of the buy out and winding up of the News Section of the WH Smith
defined benefit pension scheme during FY2022. Offsetting these items were
£0.6m of professional fees in respect of the Pensions Regulator's
investigation into the Tuffnells pension scheme and £0.4m relating to
technology investments.
Refer to the Glossary for a reconciliation of free cash flow to the net
movement in cash and cash equivalents.
Bank Net Cash/Debt
£m As at As at
28 Feb 2026 1 Mar 2025
Opening Bank Net Cash/(Debt) 3.3 (11.0)
Free cash flow 21.2 13.3
Dividend paid (16.7) (13.2)
Purchase of shares for employee benefit trust - (1.5)
Bank Net Cash/(Debt) 7.8 (12.4)
Bank Net Cash at 28 February 2026 was £7.8m, compared to £12.4m (Debt) at 1
March 2025, an improvement of £20.2m. Average Bank Net Cash/(Debt) moved from
£1.1m (Net Debt) to £16.2m (Net Cash) in the current period.
Compared to Average Bank Net Cash, reported Bank Net Cash is impacted by the
payment of the final ordinary dividend (£9.3m) and special dividend (£7.4m)
on 5 February 2026 offset by a working capital inflow for the period.
The Company's Bank Net Cash: Bank EBITDA ratio was -0.3x (HY2025: +0.3x),
which is within our main leverage covenant ratio of +2.5x (HY2025: 2.5x) and
we remain within all our other bank covenant tests at the period end.
Refer to the Glossary for a reconciliation of Bank Net Debt (which excludes
IFRS 16 lease liabilities and unamortised arrangement fees) to the balance
sheet.
During the current period, the FY2025 final ordinary dividend of £9.3m
(HY2025: FY2024, £8.3m) and a special dividend of £7.4m (HY2025: FY2024,
£4.9m) were paid, bringing the total dividends paid in respect of FY2025 to
£20.9m (FY2024: £17.4m).
PRINCIPAL AND EMERGING RISKS
The Company has a clear framework in place to continuously identify and review
both the principal and emerging risks it faces. This includes, amongst others,
a detailed assessment of business and functional teams' principal and emerging
risks and regular reporting to, and robust challenge from, both the Executive
Team and Audit Committee. The Board's assessment of these risks is aligned to
the strategic business planning process and regulatory landscape.
Risks are plotted on risk maps with descriptions, owners, and mitigating
actions using a risk rating matrix which takes into consideration both the
likelihood and the magnitude of the impact in the event that a risk event
occurs. The final risk rating matrix used to identify principal risks is based
on the residual risk that the Company faces after taking into consideration
the internal control environment and related mitigating actions and controls.
These risk maps are reviewed and challenged by the Executive Team and Audit
Committee and reconciled against the Company's risk appetite. As part of the
regular principal risk process, a review of emerging risks (internal and
external) is also conducted, and a list of emerging risks is maintained and
rolled-forward to future discussions by the Executive Team and Audit
Committee. Where appropriate, these emerging risks may be brought into the
principal risk registers. Additional risk management support is provided as
required by external experts in areas of technical complexity to complete our
bottom-up and top-down exercises.
As part of the Board's ongoing assessment of the principal and emerging risks,
the Board has considered the performance of the business, its markets, the
changing regulatory and macro-economic landscape, the Company's future
strategic direction and ambition as well as the climate-related risk
environment. The Board has 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. Risks remain subject to
ongoing scrutiny, monitoring and appropriate mitigation.
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 and Strategic link:
industry sectors and that cyber threats continue to indiscriminately evolve. technology strategy which is aligned to strategic plans.
Technology
To meet the needs of our stakeholders, our IT infrastructure and data · Regular tracking of key programmes against spend targets and delivery
processes need to be flexible, reliable and secure from cyber-attacks. 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 a
· 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 specialists, including 24/7 security monitoring,
and regulatory impacts. incident response, 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 some Stable - Whilst the UK economy grew modestly in 2025 and the first quarter of
prices or other productivity gains. offset against the impact of volume decline. 2026, inflation remains above the Bank of England's target range. Increases in
the National Living Wage continue to match or exceed inflation. Employers'
This could result in deterioration in the level of profitability in both the · Predictable level of volume decline within the news and magazine national insurance contributions increased in April 2025 and have added to the
short and medium term and impacts on the Company's ability to execute its wholesaling business enables cost optimisation planning. Company's cost base. The tightening standards pursuant to the Employment
strategies, including level of debt and liquidity objectives.
Rights Bill is expected to 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 The ongoing conflict in the Middle East has not had a significant direct
its strategic priorities. impact on Smiths News to date, with negligible effect on our cost base at this
stage. We continue to monitor the situation closely and assess any potential
implications for our contractor base.
3. Changes to retailers' commercial environment
Our largest retailers (e.g. grocers and symbol group members) remain under · Our EPoS-based returns (EBR) solution is utilised by our largest Strategic link:
significant pressure to maximise sales and profitability by channel within retailers, improving staff efficiency in managing the newspaper and magazine
their retail stores and at associated sale outlets, such as at petrol 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 · Supply-side shrink activities underway and renewed focus improve
newspapers' and/or magazines' selling space in-store (or its location) in channel profitability and reduce complexity associated with the category.
favour of other higher margin products and/or the delisting of all/particular
Change:
titles of newspapers and/or magazines. · Form stronger partnerships with emerging retailers to stock magazines
and newspapers. 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 · Monitor the impact to the business of a change to major retail
other retailers) could materially reduce the Company's revenue, profitability customer ownership.
and cash flow.
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 remains Strategic link:
this could lead to an increased risk of being unable to recruit and/or retain 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 delivery Cost and efficiencies
sub-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 sub-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 succession Stable - Vacancy levels remain stable and our colleague turnover
initiatives; learning and development programmes; and promote the Company's
culture and core values. compares favourably with our
· Retention plans are reviewed to address key risk areas, and attrition sector. Retention challenges
across the business is regularly monitored.
remain for specific job roles which
· Regular surveys are undertaken to monitor the engagement of
colleagues. are managed through agile and
bespoke responses.
5. Execution risk within the 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
Landing and implementing new business growth opportunities to increase the · A Growth Business Development Group and Growth Operations Delivery
Company's revenue and profit streams carries an execution risk to achieving Steering Committee have been established to review and control new business
our vision and purpose. opportunities and then plan and measure the impact of these opportunities on
established operations. Change:
· Experimentation through trials of new business opportunities is Stable - Our growth verticals' initiatives are expected to become a more
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 Team's balanced scorecard of key performance indicators and separate Transport Management systems, and the Operational Excellence
ensures sub-optimal performance is tracked and monitored on a regular basis programme may create management bandwidth and operational pressure pressures
and allows appropriate interventions to be made. in the short-term before improvements become evident.
6. Sustainability and climate change
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,
· Dedicated management Sustainability Steering Committee established
While we have seen some regulatory requirements and reporting obligations on (also chaired by the Chief Financial Officer) coordinates the Company's Sustainability
environmental, social and governance (ESG) matters being reduced (in both the day-to-day activities and actions in delivering the Company's sustainability
USA and EU) this has not been reflected in UK trends in many areas and thus strategy, including in relation to climate change.
the need for ongoing investment and focus remains to ensure we continue to
deliver in the areas of workplace safety, cyber security, as well as · We work with suppliers to ensure they share the Company's vision to Change:
delivering on our diversity and inclusion commitments. Despite perceptions of act on sustainability and climate change.
reductions in the regulations and expectations associated with sustainability
Decreasing -
we remain aware of the ongoing risk of reputational damage and/or loss of · Emissions and air quality targets in UK towns and cities are
revenue if the Company fails to meet regulatory requirements and stakeholder monitored by a central team in the Operations function which ensures the Carbon emissions are reducing and emission reporting has been strengthened.
expectations across our sustainability framework. Company can fulfil its obligations to customers and remain compliant with Health and safety and diversity risk controls and mitigating actions are now
legal requirements. well established and embedded within the processes to address the risk.
· 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 revenues, together with · We seek to ensure full availability of alternative newspaper titles Strategic link:
rising production costs, could lead to one or more national newspaper titles to maximise substitution opportunities for customers.
exiting the market and/or publications being taken fully digital. This could
Cost and efficiencies,
lead to a significant deterioration in the Company's profitability and cash · Partial mitigation against newspaper title closures is built into our
flow in both the short and medium term, as well as impacting on its ability to contracts with major publishers.
execute its strategies.
· Ongoing successful execution of our growth and diversification Change:
strategy provides longer-term mitigation through alternative profitable
revenue streams. Decreasing - Closure of a major title is considered unlikely in the
foreseeable future.
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 on an Decreasing - Recent engagement activities support a lessening risk environment
annual basis. together with specific legal advice having been sought in order to improve our
· Tax compliance
awareness of recycling and waste management-related regulations for Smiths
· Operational auditing and monitoring systems for higher risk areas. News Recycle proposition.
· Environmental legislation
· Employment law
The risk environment in other key areas of legal and regulatory compliance
remains stable.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
· the unaudited condensed set of financial statements has been prepared
in accordance with UK adopted IAS 34 'Interim Financial Reporting';
· the interim management report includes a true and fair review of the
information required by DTR 4.2.7R, being an indication of important events
during the first 26 weeks and description of principal risks and uncertainties
for the remaining 26 weeks of the year; and
· the interim management report includes a true and fair review of the
information required by DTR 4.2.8R, being disclosure of related parties'
transactions that have taken place in the first 26 weeks of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
On behalf of the Board
Jonathan Bunting Richard Clay
Chief Executive Officer Chief Financial Officer
5 May 2026 5 May 2026
INTERIM FINANCIAL STATEMENTS
Condensed Consolidated Income Statement (Unaudited)
For the 26 weeks to 28 February 2026
£m Note 26 weeks to 26 weeks to
28 February 2026 1 March 2025
Adjusted Adjusting items* Total Adjusted Adjusting items* Total
Revenue 515.7 - 515.7 536.4 - 536.4
Cost of sales (478.3) - (478.3) (499.1) - (499.1)
Gross profit 37.4 - 37.4 37.3 - 37.3
Administrative expenses 3 (19.2) (0.6) (19.8) (17.8) (1.1) (18.9)
Net impairment (loss)/reversal on trade receivables (0.1) - (0.1) (0.1) 1.7 1.6
Income from joint ventures 0.2 - 0.2 - - -
Operating profit 3 18.3 (0.6) 17.7 19.4 0.6 20.0
Finance costs (1.6) - (1.6) (1.8) - (1.8)
Finance income 0.3 - 0.3 0.1 - 0.1
Profit before tax 3 17.0 (0.6) 16.4 17.7 0.6 18.3
Income tax (expense)/credit 4 (4.3) 0.1 (4.2) (4.6) (0.2) (4.8)
Profit for the period attributable to equity shareholders 12.7 (0.5) 12.2 13.1 0.4 13.5
Earnings in pence per share
Basic 6 5.0 5.6
Diluted 6 4.8 5.4
Equity dividends pence per share (paid and proposed) 5 1.75 1.75
*This measure is described in the Glossary. Adjusting items are set out in
Note 3 to the interim financial statements.
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
For the 26 weeks to 28 February 2026
£m Note 26 weeks to 26 weeks to
28 Feb 2026 1 Mar 2025
Profit for the period 12.2 13.5
Items that will not be reclassified to the Income Statement:
Tax credit on pension surplus 10 - 1.5
Total comprehensive income for the period 12.2 15.0
Condensed Consolidated Balance Sheet (Unaudited)
As at 28 February 2026
£m Note As at As at
28 Feb 2026 30 Aug 2025
Non-current assets
Intangible assets 2.4 2.5
Property, plant and equipment 10.2 10.7
Right of use assets 28.3 29.4
Interest in joint ventures 4.6 4.6
Deferred tax assets 0.6 0.8
Other non-current assets 0.9 0.9
47.0 48.9
Current assets
Inventories 11.7 12.6
Trade and other receivables 99.1 103.4
Cash and cash equivalents 7 10.5 8.2
Corporation tax receivable 1.3 0.9
122.6 125.1
Total assets 169.6 174.0
Current liabilities
Trade and other payables (128.8) (127.2)
Lease liabilities (6.2) (5.6)
Provisions 8 (0.6) (0.5)
(135.6) (133.3)
Non-current liabilities
Borrowings 7 - (1.7)
Lease liabilities (23.4) (24.9)
Provisions 8 (4.7) (4.6)
(28.1) (31.2)
Total liabilities (163.7) (164.5)
Total net assets 5.9 9.5
Equity
Called up share capital 11 12.4 12.4
Share premium account 11 60.5 60.5
Demerger reserve (280.1) (280.1)
Own shares reserve (1.2) (2.9)
Translation reserve 0.1 0.2
Retained earnings 214.2 219.4
Total shareholders' funds 5.9 9.5
Condensed Consolidated Statement of Changes in Equity (Unaudited)
For the 26 weeks to 28 February 2026
£m Note Share Share Premium Account Demerger reserve Own shares reserve Translation Retained Earnings Total
reserve equity
capital
Balance at 31 August 2025 12.4 60.5 (280.1) (2.9) 0.2 219.4 9.5
Profit for the period - - - - - 12.2 12.2
Total comprehensive income for the period - - - - - 12.2 12.2
Dividends paid 5 - - - - - (16.7) (16.7)
Employee share schemes purchases - - - (0.1) - - (0.1)
Employee share scheme awards - - - 1.8 - (1.4) 0.4
Recognition of share-based payments, net of tax - - - - - 0.5 0.5
Transfer - - - - (0.1) 0.1 -
Current tax recognised in equity - - - - - 0.3 0.3
Deferred tax recognised in equity - - - - - (0.2) (0.2)
Balance at 28 February 2026 12.4 60.5 (280.1) (1.2) 0.1 214.2 5.9
£m Note Share Share Premium Account Demerger reserve Own shares reserve Translation Retained Earnings Total
reserve equity
capital
Balance at 1 September 2024 12.4 60.5 (280.1) (3.7) 0.2 207.4 (3.3)
Profit for the period - - - - - 13.5 13.5
Tax credit on pension surplus - - - - - 1.5 1.5
Total comprehensive income for the period - - - - - 15.0 15.0
Dividends paid 5 - - - - - (13.2) (13.2)
Employee share schemes purchases - - - (1.5) - - (1.5)
Employee share scheme awards - - - 2.4 - (1.5) 0.9
Recognition of share-based payments, net of tax - - - - - 0.5 0.5
Deferred tax recognised in equity - - - - - (0.3) (0.3)
Balance at 1 March 2025 12.4 60.5 (280.1) (2.8) 0.2 207.9 (1.9)
Condensed Consolidated Cash Flow Statement (Unaudited)
For the 26 weeks to 28 February 2026
£m Note 26 weeks to 26 weeks to
28 Feb 2026 1 Mar 2025
Net cash inflow from operating activities 10 26.0 20.4
Investing activities
Interest received 0.2 0.1
Dividends received from joint ventures 0.1 0.1
Purchase of fixed assets (0.9) (2.3)
Net cash used in investing activities (0.6) (2.1)
Financing activities
Interest paid (1.4) (1.7)
Dividend paid (16.7) (13.2)
Repayments of lease principal (3.0) (3.3)
Net (decrease)/increase in revolving credit facility 7 (2.1) 0.7
Purchase of shares for employee benefit trust (0.1) (1.5)
Proceeds from exercise of share purchase options 0.2 -
Net cash used in financing activities (23.1) (19.0)
Net increase/(decrease) in cash and cash equivalents 2.3 (0.7)
Opening net cash and cash equivalents 8.2 7.0
Closing net cash and cash equivalents 10.5 6.3
Notes to the Condensed Unaudited Interim Financial Statements
For the 26 weeks to 28 February 2026
1 Basis of Preparation
Smiths News plc is comprised of the Company and its subsidiaries (together
referred to as the 'Group').
These unaudited condensed consolidated interim financial statements have been
prepared in accordance with UK-adopted IAS 34 'Interim Financial Reporting'.
They do not include all of the information required for full annual financial
statements and should be read in conjunction with the 2025 Annual Report and
Accounts. The financial period represents the 26 weeks ended 28 February 2026
(prior period 26 weeks ended 1 March 2025).
The Group has applied the same accounting policies and methods of computation
in these interim consolidated financial statements, as in its statutory
accounts for the 52 weeks ended 30 August 2025, with the exception of changes
as detailed in Note 2.
These condensed consolidated interim financial statements do not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. A copy
of the statutory accounts for the 52 weeks ended 30 August 2025 has been filed
with the Registrar of Companies. The auditor's report on those accounts was
not qualified, did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying the report and did not
contain statements under section 498(2) or (3) of the Companies Act 2006. The
auditor's review opinion on the 26-week period ended 28 February 2026 is at
the end of this report.
Going concern
The condensed consolidated interim financial statements have been prepared on
a going concern basis.
The Group had a net asset position of £5.9m as at 28 February 2026. All bank
covenant tests were met at the period end with the key Bank Net Debt: Bank
EBITDA ratio of -0.3x which is below the period end facility agreement
covenant test threshold of 2.5x. The threshold remains at 2.5x throughout the
life of the facility and tested at each quarter end. If this covenant was
breached, the loan could become repayable on demand.
The Group utilises a £40.0m Revolving Credit Facility (RCF) to manage its
cash needs. At the end of the period £38.5m was available and the Group had
£10.5m of cash on hand, giving headroom of £49.0m. Average daily Bank Net
Cash during the period was £16.2m (H1 2025: average debt of £1.1m). The RCF
is in place to accommodate the Group's intra-month working capital cash flow
cycle which generates a predictable cash swing.
Bank facility
The Group's banking facility at the balance sheet date 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 10). The
agreement is with HSBC and Santander.
The facility's current margin is 2.45% per annum over SONIA and had a final
maturity date of 2 May 2027 with the option of two one-year extensions with
lender consent on the first and second anniversaries. During the prior period,
the first one-year extension was exercised. After the balance sheet date, the
second one-year extension was exercised, which extended the maturity date to 2
May 2029.
Reverse stress testing
The directors have prepared their base case forecast which represents their
best estimate of cash flows over the going concern period which is the 16
months up to 29 August 2027, and in accordance with FRC guidance have prepared
a reverse stress test that identifies either a lack of 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 covenant break would occur in August 2027 if EBITDA was 72% 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;
· 96% of contracted revenues at current rates are secured with
publishers to 2029; and
· the Company continues to trade with adequate profit to service
its debt covenants.
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 through working capital management of the
peak-to-trough intra-month movement.
· Utilising existing vendor management finance arrangements with
retailers and optimising 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.
Assessment
Having considered the above and the funding requirements of the Group, 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 Interim 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.
2 Accounting policies
Changes in accounting policies
During the period the Group has adopted "Lack of exchangeability - Amendments
to IAS 21".
This amendment to accounting standards had no impact on the financial
statements in the prior or current periods.
New standards in issue but not yet effective
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 continues to be 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.
Alternative 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 within the internal management reporting to the Board and
Executive 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.
Estimates and judgements
The preparation of these condensed consolidated interim financial statements
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 are as follows:
Revenue recognition - sales of newspapers and magazines
Revenue from wholesale distribution - £513.9m (H1 2025: £534.8m)
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 toys 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.
Within revenue from wholesale distribution, the Group recognises revenue from
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; 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 £433.5m (H1 2025: £453.9m).
Other revenue - £1.8m (H1 2025: £1.6m)
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.
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 Executive Team and the Board.
The classification of adjusting items requires significant management
judgement after 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 totalled a
cost of £0.5m (H1 2025: net credit of £0.4m) with a breakdown included
within Note 3.
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 financial year are as follows:
Property provision
The Group holds a property provision which estimates future liabilities to
restore leased premises to an agreed standard at the date the lease is
terminated. The provision is calculated based on key assumptions including the
length of time properties will be occupied, the future costs of restoration
and the condition of the property at the balance sheet date.
The property provision represents the estimated future cost of dilapidation
costs on properties across the Group. Provisions have been adjusted for the
effect of inflation and discounted to present value and this discount will be
unwound over the life of the leases.
A change in any of these assumptions could materially impact the provision
balance. Refer to Note 8 for further details on the sensitivity of the
assumptions used to calculate the property provision. The property provisions
carrying value at the end of the period was
£4.9m (FY2025: £4.6m)
3 Adjusting items
The table below summarises amounts that have been classified as
adjusting items in the period:
£m 26 weeks to 26 weeks to
28 February 1 March
2026 2025
Technology transformation costs (a) (0.3) (0.4)
Transformation programme planning costs (b) (0.2) -
Tuffnells costs (c) (0.1) (0.6)
Network and reorganisation costs (d) - (0.1)
Administrative expenses (0.6) (1.1)
Impairment reversal on trade receivables (e) - 1.7
Total before tax (0.6) 0.6
Taxation 0.1 (0.2)
Total after taxation (0.5) 0.4
The Group incurred total costs of £0.6m (H1 2025: net credits of £0.6m) in
respect of adjusting items before tax and costs of £0.5m (H1 2025: credits of
£0.4m) after tax respectively.
a) Technology transformation costs £0.3m (H1 2025: £0.4m)
The Group is undergoing a transformation programme to enhance its technology
infrastructure and enable alignment to the Group's vision and strategy.
Implementation costs of £0.3m (H1 2025: £0.4m) have been recognised as
adjusting items given that costs over the three-year programme are expected to
be a significant change to the Company. The cash impact was an outflow of
£0.3m.
b) Transformation programme planning costs £0.2m (H1 2025: £nil)
During the current period £0.2m of consultancy fees were incurred in respect
of a strategic recycling project. These costs have been presented within
adjusting items as the nature the project is expected to be significant and
transformational. The cash impact during the current period was £nil.
c) Tuffnells costs £0.1m (H1 2025: £0.6m)
In the current period legal and other professional fees of £0.1m (H1 2025:
£0.6m) were incurred in respect of the Group responding to the Pensions
Regulator in respect of its formal 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 9.
Insurance claim provisions are held from previous ownership of Tuffnells - no
further adjustment has been made in the current or prior period to the
remaining insurance provision.
The cash impact during the period was an outflow of £0.1m (H1 2025: £0.7m)
comprising £0.1m (H1 2025: £0.1m) of insurance settlements and £nil (H1
2025: £0.6m) of legal and other professional fees.
d) Network and re-organisation costs £nil (H1 2025: £0.1m)
During the prior period, additional costs of £0.1m were provided for
simplifying the DMD group structure. The cash impact during the prior period
was an outflow of £0.1m.
e) Impairment reversal on trade receivables £nil (H1 2025: release of
£1.7m)
In respect of the administration of McColl's Retail Group during FY2022, at
FY2024 a provision of £3.8m was held, representing management's best estimate
of recovery of 30% of the total debt claim filed, as per the issued
notification from the administrators.
On 31 October 2024, £1.6m was recovered from the administrators in cash as a
first interim dividend. On 14 March 2025, a second interim dividend of £1.7m
was recovered, reducing total gross outstanding receivables to £2.1m with the
provision reduced accordingly. The reduction in provision was reported as an
adjusting item on the same basis as previous impairment losses and reversals
recognised during prior periods.
4 Income tax charge
The income tax charge for the 26 weeks ended 28 February 2026 was calculated
based upon the tax rates expected to apply to the Group for the full year. The
effective rate of tax on adjusted profits before tax was 25.3% (H1 2025:
26.0%).
A tax rate of 25% was applied to UK corporation tax and, for other
jurisdictions, taxation was applied using prevailing rates.
5 Dividends
Dividends proposed in the period 26 weeks to 28 Feb 2026 26 weeks to 1 Mar 2025 26 weeks to 28 Feb 2026 26 weeks to 1 Mar 2025
Per share Per share £m £m
Interim dividend - proposed 1.75p 1.75p 4.3 4.2
Dividends paid in the period Per share Per share £m £m
Final dividend - prior period 3.80p 3.40p 9.3 8.3
Special dividend - prior period 3.00p 2.00p 7.4 4.9
An interim dividend of 1.75p per ordinary share is proposed for the 26-week
period to 28 February 2026 (H1 2025: 1.75p per ordinary share), which is
expected to be paid on 3 July 2026 to all shareholders who are on the register
of members at the close of business on 5 June 2026. The ex-dividend date will
be 4 June 2026.
The FY2025 final ordinary dividend of 3.8p per share (£9.3m) and special
dividend of 3.0p (£7.4m) were approved by shareholders at the Annual General
Meeting on 29 January 2026, paid on 5 February 2026 and recognised in these
Interim Financial Statements.
6 Earnings per share
26 weeks to 28 Feb 2026 26 weeks to 1 Mar 2025
Earnings (£m) Weighted average number of shares million Pence per share Earnings (£m) Weighted average number of shares million Pence per share
(p) (p)
Weighted average number of shares in issue 247.7 247.7
Shares held by the Employee Benefit Trust (weighted) (3.6) (5.2)
244.1 242.5
Basic earnings per share (EPS)
Adjusted earnings attributable to ordinary shareholders 12.7 244.1 5.2 13.1 242.5 5.4
Adjusting items (0.5) 0.4
Earnings attributable to ordinary shareholders 12.2 244.1 5.0 13.5 242.5 5.6
Diluted EPS
Effect of dilutive securities 8.0 9.5
Diluted Adjusted EPS 12.7 252.1 5.0 13.1 252.0 5.2
Diluted EPS 12.2 252.1 4.8 13.5 252.0 5.4
Dilutive shares increase the basic number of shares by 8.0m to 252.1m (H1
2025: by 9.5m to 242.0m). The calculation of diluted EPS reflects the
potential dilutive effect of employee incentive schemes.
7 Cash and borrowings
Cash and borrowings by currency (sterling equivalent) are as follows:
£m Sterling Euro Total At
and other 28 Feb 2026 30 Aug 2025
Cash and cash equivalents 7.6 0.2 7.8 5.4
Cash held by the EBT to purchase own shares 2.7 - 2.7 2.8
Cash and cash equivalents 10.3 0.2 10.5 8.2
Revolving credit facility - disclosed within non-current liabilities - - - (2.1)
Unamortised arrangement fees - disclosed within non-current liabilities* - - - 0.4
Total cash/(borrowings) 10.3 0.2 10.5 (1.7)
Total cash/net cash 10.3 0.2 10.5 6.5
Total borrowings
Amount due after 12 months - - - (1.7)
*At 28 February 2026, unamortised arrangement fees of £0.3m were presented
within trade and other receivables as no revolving credit facility was drawn
at the balance sheet date.
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits and funds with an original maturity of three months or less. The
carrying amount of these assets 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 prior period, the first one-year extension was
exercised. After the balance sheet date, the second one-year extension was
exercised, which extended the maturity date to 2 May 2029.
At 28 February 2026 none 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 28 February 2026, the Company had £40.0m (FY2025: £37.9m) 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
(FY2025: £1.5m); further details are included in Note 10.
During the period, the net decrease of £2.1m in borrowings comprised £8.9m
of cash inflows from drawing down the RCF and £11.0m of cash outflows from
repayment of the RCF.
Analysis of net debt
£m As at As at
28 Feb 2026 30 Aug 2025
Cash and cash equivalents 7.8 5.4
Cash held by the EBT for the purchase of shares 2.7 2.8
Non-current borrowings - (1.7)
Net cash 10.5 6.5
Lease liabilities (29.6) (30.5)
Net debt (19.1) (24.0)
8 Provisions
£m Reorganisation provisions Insurance and legal provisions Property provisions Total
At 31 August 2025 (0.1) (0.4) (4.6) (5.1)
Charged to the income statement - - (0.2) (0.2)
Utilised in period - 0.1 - 0.1
Unwinding of discount utilisation - - (0.1) (0.1)
At 28 February 2026 (0.1) (0.3) (4.9) (5.3)
£m 28 Feb 2026
Included within current liabilities (0.6)
Included within non-current liabilities (4.7)
Total (5.3)
Reorganisation provisions relate to the ongoing restructure of the DMD
business.
Insurance and legal provisions represent the expected future costs of
employer's liability, public liability, motor accident claims and legal
claims, including those related to the Tuffnells business prior to disposal.
The property provision represents the estimated cost of dilapidations on
leased properties across the Group, with exit dates expected over the ten-year
period to 2036. These provisions have been discounted to present value, and
this discount will be unwound over the life of the leases.
The Group has performed a sensitivity analysis on the property provision. If
the repair cost per square foot changed by +/- £1.00, the property provision
would change by +/- £0.5m.
9 Contingent liabilities and capital commitments
Bank and other guarantees
As at 28 February 2026, the Group had approved letters of credit of £1.5m
(FY2025: £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 £0.1m (H1 2025:
£0.6m) of legal and other professional fees in considering and responding to
enquiry requests from the Pension 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.
On 20th February 2026, the Company received a Warning Notice 'WN', which
explains that tPR is considering issuing a Financial Support Direction ("FSD")
against Smiths News in relation to the Tuffnells Scheme. An FSD is based on a
'no-fault' liability-regime and forms part of tPR's wide-ranging powers. In
addition to Smiths News, a number of other parties connected to Tuffnells are
identified in the WN as potential targets of tPR's powers.
tPR has stated in the WN that the s75 liability of the Tuffnells Scheme, which
is the maximum amount tPR can seek in aggregate from all targets, is estimated
at £3.467m.
The Company is reviewing the WN with its advisers and will have an opportunity
to make submissions to tPR in response. These will be considered by tPR's case
team and then referred to a Determinations Panel before any decision is made
as to whether an FSD should be issued against Smiths News, and if so, in what
form or for what value. It is therefore too early to know if an FSD will be
issued, or the amount or form of any such support.
The Board has 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 FSD has
been issued, it remains uncertain at this time as to how tPR may proceed.
Accordingly, the Board has concluded that the matter represents a possible
obligation only and has disclosed a contingent liability. The Board maintains
the view that Smiths News acted reasonably throughout its time as parent of
Tuffnells and that it was an overall net contributor of funding and support to
Tuffnells during its period of ownership.
Indemnity coverage
On winding up of the News Section of the WH Smith Pension Trust defined
benefit pension scheme during FY2022, 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 leases
A potential liability could crystallise 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).
Should the Group be required to pay its share of the rental commitment of this
lease at 28 February 2026, total rent of £0.9m (FY2025: £0.9m) would be
payable over the remaining lease term to March 2033.
Capital commitments
Contracts placed for future capital expenditure approved by the directors but
not provided for amount to £0.1m (FY2025: £0.1m).
10 Net cash inflow from operating activities
£m 26 weeks to 26 weeks to
28 Feb 2026 1 Mar 2025
Operating profit 17.7 20.0
Share of profits of joint ventures (0.2) (0.1)
Depreciation of property, plant and equipment 1.2 1.2
Depreciation of right of use assets 3.2 3.2
Amortisation of intangible assets 0.3 0.2
Share-based payments 0.5 0.5
Decrease in inventories 0.9 6.2
Decrease/(increase) in receivables 4.6 (1.2)
Increase/(decrease) in payables 2.1 (7.0)
Decrease in provisions (0.1) (0.5)
Income tax paid (4.2) (3.6)
Refund of tax on pension surplus* - 1.5
Net cash inflow from operating activities 26.0 20.4
* During the prior 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.
Net cash inflow from operating activities is stated after outflows of £0.6m
(H1 2025: net inflows of £2.1m) from adjusting items.
11 Share capital
a) Share capital
£m 28 Feb 2026 1 Mar 2025
Issued, authorised and fully paid ordinary shares of 5p each
Opening and closing balance 12.4 12.4
b) Movement in share capital
Number (m) Ordinary shares of 5p each
At 1 March 2025 247.7
At 28 February 2026 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 Group. The Group has one class of Ordinary shares, which carry
no right to fixed income.
c) Share premium
£m 28 Feb 2026 1 Mar 2025
Opening and closing balance 60.5 60.5
12 Related Party Transactions
No related party transactions had a material impact on the financial
performance in the period or financial position of the Group at 28 February
2026. There have been no material changes to or material transactions with
related parties as disclosed in Note 26 of the Annual Report and Accounts for
the 52-week period ended 30 August 2025.
13 Subsequent 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, other than those events disclosed in Note 2.
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 Company'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 Team.
Consequently, APMs are used by the directors and management for performance
analysis, planning, reporting and incentive-setting purposes.
APM Closest equivalent IFRS measure Adjustments to reconcile to IFRS measure Note/page reference for reconciliation Definition and purpose
Income Statement
Adjusting Items No direct equivalent N/A Note 3 Adjusting items of income or expenses are excluded 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 provide 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* Adjusted items Income statement/ Note 3 Adjusted operating profit is defined as operating profit excluding the impact
of adjusting items (defined above). This is the headline measure of the
Group's performance and is a key management incentive metric.
Adjusted profit before tax Profit before tax (PBT) Adjusted items Income statement/ Adjusted profit before tax is defined as profit before tax excluding the
impact of adjusting items (defined above).
Note 3
Adjusted profit after tax Profit after tax (PAT) Adjusted items Income statement/ Adjusted profit after tax is defined as profit after tax, excluding the impact
of adjusting items (defined above).
Note 3
Adjusted Operating profit* Depreciation and amortisation Glossary 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 Glossary 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 6 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 Glossary Free cash flow is defined as the movement in cash and cash equivalents
purchases excluding the following; the payment of dividends, the impact of acquisitions
and disposals, the repayment of bank loan principal amounts and RCF
repayments, and outflows for purchases of own shares (Employee Benefit Trust
(EBT) share purchases). 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 Financial review Free cash flow (excluding adjusting items) is free cash flow adding back
purchases, pension deficit repair payments adjusting items adjusting cash costs.
Balance Sheet
Bank Net Debt Borrowings less cash Cash flow statement Bank net debt is calculated as total debt less cash and cash equivalents
(excluding cash held by the EBT). 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 Company's income statement. It is not
defined per IFRS, however, it is a generally accepted profit measure.
Reconciliation of movements in borrowings and cash to free cash flow
26 weeks to 26 weeks to
28 Feb 2026
1 Mar 2025
Net increase/(decrease) in cash and cash equivalents 2.3 (0.7)
Net decrease/(increase) in borrowings 2.1 (0.7)
Movement in borrowings and cash 4.4 (1.4)
Dividend paid 16.7 13.2
Outflow for purchase of own shares 0.1 1.5
Total free cash flow 21.2 13.3
Reconciliation of bank net cash to reporting net debt
At At
28 Feb 2026 30 Aug 2025
Bank net cash 7.8 3.3
Cash held by the EBT for the purchase of own shares 2.7 2.8
Unamortised arrangement fees (note 7) - 0.4
Lease liabilities (29.6) (30.5)
Net debt (note 7) (19.1) (24.0)
Reconciliation of operating profit to Bank EBITDA
26 weeks to 26 weeks to
28 Feb 2026
1 Mar 2025
Operating profit 17.7 20.0
Adjusting items 0.6 (0.6)
Adjusted operating profit 18.3 19.4
Depreciation 1.2 1.2
Amortisation 0.3 0.2
Right of use asset depreciation 3.2 3.2
Adjusted EBITDA 23.0 24.0
Operating lease charges (4.4) (4.2)
Share-based payments expense 0.5 0.5
Bank EBITDA 19.1 20.3
INDEPENDENT REVIEW REPORT TO SMITHS NEWS PLC
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the interim
financial statements for the 26-week period ended 28 February 2026 is not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34 and the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
We have been engaged by the company to review the condensed set of financial
statements in the interim financial statements for the 26-week period ended 28
February 2026 which comprises the Condensed Consolidated Income Statement, the
Condensed Consolidated Statement of Comprehensive Income, the Condensed
Consolidated Balance Sheet, the Condensed Consolidated Statement of Changes in
Equity, the Condensed Consolidated Cash Flow Statement and the related notes
to the Consolidated Unaudited Interim Financial Statements.
Basis for conclusion
We conducted our review in accordance with the International Standard on
Review Engagements (UK) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410"). A
review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with International
Standards on Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410, however future events or conditions may cause the group to
cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the Disclosure Guidance and
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BDO LLP
Chartered Accountants
London, UK
5 May 2026
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
1 (#_ftnref1)
https://defraenvironment.blog.gov.uk/2025/01/31/introducing-the-deposit-return-scheme-for-drinks-containers/
(https://defraenvironment.blog.gov.uk/2025/01/31/introducing-the-deposit-return-scheme-for-drinks-containers/)
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