Trading Update

RNS Number : 5432G

Connect Group PLC

18 March 2020

 

This announcement contains inside information

Connect Group PLC

("Connect Group" or "the Group")

Trading Update

Connect Group PLC is today issuing a trading update in light of the actions being taken around the World to contain the Coronavirus pandemic. 

Given the Group's critical role in the UK's news supply chain, and as an essential supply partner for many of our freight customers, we are fully committed to taking every possible step to maintain service to our customers and to the general public at this difficult time. Our priority at this time remains the health and safety of our colleagues, customers and supply partners.

Core Trading

Core trading across the Group remains relatively robust despite the considerable disruption to the UK economy at present.  Both Smiths News and Tuffnells are currently trading in line with expectations, with cost savings dampening marginal softening of demand in Smiths News.

While the nature of the Group's businesses provides a degree of resilience, we remain vigilant to events and the need for flexible contingency planning. The Group has taken appropriate measures, so far as is possible, to ensure business continuity and we remain alert to the general impact that the Coronavirus pandemic may have on trading in the Group's core businesses.

Postponement of UEFA Football Championship

The announcement made by UEFA on 17 March 2020 postponing the European Football Championship to June 2021 will impact the timing for associated football magazines and trading card sales. The Board expects the impact on profit in H2 2020 to be in the region of £1.0m to £1.5m.

DMD

As a consequence of the international measures to contain the Coronavirus pandemic, the Group's airline and travel supply business (Dawson Media Direct / DMD) has seen a marked softening of demand from its clients. Whilst it is too early to determine the precise impact, our current expectations are that DMD will be at or around breakeven in H2 2020, representing a reduction in full year profit of around £1m. 

Reduced Full Year Expectations for the Group

Taken together, the impact of these events on the Group gives rise to a reduction in the Board's expectations for FY2020 full year adjusted Profit Before Tax of between £2m and £2.5m. 

While it is not possible to determine the impact of any further measures to contain the spread of Coronavirus, the Group continues to monitor the situation carefully and will update the market in due course. 

Enquiries:

Connect Group PLC

Jonathan Bunting, Interim Chief Executive Officer

Tony Grace, Chief Financial Officer

[e-mail]  

www.connectgroupplc.com  

Buchanan (Financial PR)

Richard Oldworth / Jamie Hooper

[e-mail]  

www.buchanan.uk.com

Person responsible for arranging release of this announcement:

Stuart Marriner, General Counsel & Company Secretary

Connect Group PLC

Rowan House

Cherry Orchard North

Kembrey Park

Swindon

SN2 8UH

email: [e-mail]

LEI: 2138004O33ONVOOQXB02

About Connect Group

Connect Group PLC is a UK based specialist distributor and a leading provider of distribution solutions in complex and fragmented markets. The Group's networks are focused on serving high density early morning deliveries and the demands of mixed and irregular sized freight.

The Group's core businesses are each leading players in their markets:

Smiths News

Smiths News is the UK's largest newspaper and magazine wholesaling business with an approximate 55 per cent. market share. It distributes newspapers and magazines on behalf of the major national and regional publishers, delivering to approximately 25,500 customers across England and Wales on a daily basis. The speed of turnaround in the UK and density of Smiths News' coverage is critical to one of the world's fastest physical supply chains.

Dawson Media Direct (DMD) supplies newspapers, magazines and inflight entertainment technology and content to over 80 airlines in 50 countries. Delivering to strict time windows with security accreditation, DMD serves the specialist needs of airlines and travel points in the UK and worldwide with printed and digital media.

Tuffnells

Tuffnells is a leading distributor of mixed and irregular freight, serving approximately 5,000 small and medium sized enterprises across the UK. Its network of 36 depots collects and delivers mixed parcel freight consignments, specialising in items of irregular dimension and weight ("IDW"), examples of which include bulky items, building materials and automotive parts. With a mix of local and national clients, Tuffnells completes up to 45,000 daily deliveries, offering a range of timed services that are responsive to customer demand.

 

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