Refinancing Agreement

Smiths News PLC

02 May 2024

 

2 May 2024

This announcement contains inside information

Smiths News plc

("Smiths News" or the "Group" or the "Company")

Refinancing Agreement

Smiths News (LSE: SNWS), the leading distributor of newspapers, magazines and ancillary services to retailers across the UK, is pleased to announce it has signed a refinancing agreement to replace its current senior finance agreement, which was due to mature on 31 August 2025.

The new refinancing agreement with two of the Company's existing lending syndicate, Santander and HSBC (the "Agreement"), comprises a £40 million revolving credit facility ("RCF"), with an additional £10 million uncommitted accordion facility (together the "Facilities").

The Facilities are available initially on a three-year term at an improved competitive margin of 2.45% per annum over SONIA, which is a 155bps improvement from the previous agreement. The Company has the option at each of the first and second anniversaries to extend maturity on the same financial terms, with lender consent, upon new three-year maturity periods.

The Agreement removes the existing cap on dividends and distributions, which was previously capped at £10 million per financial year. The removal of this restriction will enable the Company to implement its revised capital allocation policy that comprises:

·      Maintaining a strong balance sheet, with a Bank Net Debt: adjusted EBITDA ratio of less than 1.0x

·      Continued investment in both core business and organic growth

·      Payment of sustainable ordinary dividend, maintaining 2x dividend cover

·      Disciplined approach to inorganic growth, focused on bolt-on acquisitions with clear accretive returns to enhance shareholder value

·      Further returns to shareholders when appropriate.

Further detail on the successful refinancing is provided in the Group's interim results announcement and accompanying presentation, published today. 

Jonathan Bunting, Chief Executive Officer of Smiths News, commented:

"We are extremely pleased to announce today's refinancing news, reflecting the clear progress we have made in strengthening the Company's underlying finances and reducing the net debt of the business. The removal of the distribution cap also enables us to implement a revised capital allocation policy that will support our goals of investing in business capabilities, exploring inorganic adjacent market opportunities and delivering value to investors."

For further information, please contact:

Smiths News plc Jonathan Bunting, Chief Executive Officer Paul Baker, Chief Financial Officer www.smithsnews.co.uk	via Vigo Consulting
Vigo Consulting Jeremy Garcia / Fiona Hetherington / Verity Snow [e-mail]	Tel: [phone]

About Smiths News

For over 200 years, Smiths News has been delivering newspapers to retailers across the UK. It distributes newspapers and magazines on behalf of the major national and regional publishers, delivering to approximately 23,000 customers across England and Wales on a daily basis. The speed of turnaround and the density of Smiths News' coverage is critical to one of the world's fastest physical supply chains.

For more information, please visit: www.smithsnews.co.uk

Person responsible for arranging release of this announcement:

Stuart Marriner, General Counsel and Company Secretary

Smiths News plc, Rowan House, Cherry Orchard North, Kembrey Park, Swindon SN2 8UH

Email: [e-mail]  

 

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