1st May 2019 09:52
LONDON (Alliance News) - Newspaper and magazine wholesale distributor Connect Group PLC on Wednesday reported a significant drop in profit, but its outlook is still positive.
For the six months to February, statutory pretax profit declined by 65% to GBP3.3 million, with the adjusted figure slipping 34% to GBP9.9 million.
Revenue fell 4.4% to GBP732.5 million, and Connect has axed its interim dividend, having returned 3.1 pence to shareholders a year prior.
These results were in line with Connect's expectations, the company said, as it addresses historical problems.
Connect's main businesses are newspaper and magazine wholesaler Smiths News, and freight distributor Tuffnells.
Smiths News's adjusted operating profit rose despite a 4.0% decline in revenue, with Connect keeping a lid on costs. Cost savings, the firm said, are ahead of schedule.
Tuffnells was hindered by the carry-over of customer losses from Connect's prior financial year leading to lower volumes and thus an 8.1% fall in revenue.
"Today's results confirm the progress we have made, with a good performance in Smiths News and further benefits from central efficiencies and focused capital management," said Chief Executive Jos Opdeweegh.
"Looking ahead, we continue to drive our strategic priorities, spearheaded by business unit accountability, the turnaround of Tuffnells and lean processes across the entire organisation."
Shares were 0.3% higher on Wednesday at a price of 38.60p each.
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