Interim Results as at 28 February 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:

Business Highlights:

Outlook:

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

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

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: [email protected]

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.

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 30th 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 30th 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]

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, 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 30th 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

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

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 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

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

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

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

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.

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

INTERIM FINANCIAL STATEMENTS

Condensed Consolidated Income Statement (Unaudited)

For the 26 weeks to 28 February 2026

\* 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

Condensed Consolidated Balance Sheet (Unaudited)

As at 28 February 2026

Condensed Consolidated Statement of Changes in Equity (Unaudited)

For the 26 weeks to 28 February 2026

Condensed Consolidated Cash Flow Statement (Unaudited)

For the 26 weeks to 28 February 2026

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:

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

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

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:

*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

8 Provisions

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

* 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

b) Movement in share capital

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

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.

*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

Reconciliation of bank net cash to reporting net debt

Reconciliation of operating profit to Bank EBITDA

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 Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

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).