22nd Sep 2022 11:13
(Alliance News) - Smiths News PLC on Thursday said it is performing ahead of full-year market expectations, despite McColl's Retail Group PLC going into administration.
Shares in the Swindon, England-based newspaper and magazine wholesaler were up 5.8% to 29.30 pence each in London on Thursday morning.
The company said that in the second half of its financial year to August 27, it experienced "good" trading performance supported by a positive sales mix and focused operational control.
Smiths now expects its annual adjusted earnings before interest, tax, depreciation and amortisation to be at least GBP40 million. This is ahead of market expectations.
In its financial year 2021, the company reported adjusted Ebitda of GBP42.6 million.
The company added that fuel prices and other inflationary pressures continue to be in line with its expectations and prior guidance.
Back in May, Smiths noted that McColl's Retail Group PLC had entered administration. At the time, Smiths served around 600 McColl's stores, posing a GBP6 million to GBP7 million bad debt risk, with GBP1.2 million currently overdue.
On Thursday, Smiths said it has provisioned, as an exceptional, for the bad debt risk at GBP4.4 million, at the lower end of the guided range for distribution prospects. The administrators have confirmed that unsecured creditors can expect to receive estimated distribution prospects of between 20% and 40%, it noted.
However, the company said it continues to expect to be in a position to propose a final dividend of at least 2.1p per share. The final dividend for financial year 2021 was 1.5p.
Chief Executive Jonathan Bunting said: "In what has been an uncertain period for the wider economy, our signature attention to delivering our plans has paid dividends. We remain focused on providing excellent service to our retailers and publishers and expect to continue to deliver consistent financial performance and shareholder returns."
By Sophie Rose; [email protected]
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