Smiths News & NI agree new 5yr contract extension

RNS Number : 1669K

Smiths News PLC

16 August 2012

 



Smiths News PLC

Smiths News and News International agree new five year contract extension

New contract secures an additional c.£40m of regional distribution business

Smiths News PLC is pleased to announce it has reached agreement with News International ('NI') to extend their newspaper wholesaling agreement from 7 July 2014 through to 7 July 2019.

This new agreement secures the Group's existing NI distribution business for the Times, The Sunday Times and The Sun titles for an additional five years.  In addition, the new contract will see Smiths News awarded NI's existing regional Direct to Retail ("DTR") business, which will be serviced from within the Group's existing news distribution footprint.

The new and extended agreement will provide additional annual revenues of c.£40m, securing c.£200m pa (at FY12 values).  This agreement increases Smiths News market share of the NI wholesale business by c.10% to c.49%, with only the Greater London region remaining a NI DTR operation.

Due to the phased transfer of the new business from Oct 2012 and expected costs of setup, it is anticipated that the impact of the agreement will be earnings neutral in FY13.

Mark Cashmore, Chief Executive Officer, commented

"We are delighted to be extending our relationship with News International, which further endorses our business model and reinforces our market leading position.

Today's announcement underlines the strength of our wholesale proposition and we believe News International's decision to transfer a significant part of their DTR operations across to Smiths News demonstrates the importance of our track record, continued investment and service excellence."

Enquiries:

Smiths News PLC Mark Cashmore, Group Chief Executive Nick Gresham, Chief Financial Officer	01793 563641
Buchanan Jeremy Garcia / Gabriella Clinkard	020 7466 5000

About Smiths News PLC:

Smiths News PLC comprises Smiths News, the UK's leading wholesaler of newspapers and magazines, Bertram Books, a leading UK book wholesaler and The Consortium, a leading independent distributor of consumable products to the education and care markets.

Smiths News distributes newspapers and magazines on behalf of all the major national publishers as well as a large number of regional publishers. The business serves approximately 30,000 customers across England and Wales, supplying large general retailers as well as smaller independent newsagents. Smiths News has an approximate 55% share of the newspaper and magazine wholesaling market in the UK. In addition to its distribution activities, Smiths News collects and processes returns, supplies sales information to publishers and provides a range of services for its retail customers.

Bertram Books supplies books to a mix of independent booksellers, on-line and multiple retailers, and libraries. Bertram has an approximate 45% share of the wholesale book market. In August 2011 the company acquired Dawson Holdings plc. The principal asset, Dawson Books is a leading supplier of academic books in the UK and internationally.

In April 2012 the company acquired The Consortium. The Consortium is the UK's leading distributor of educational and care consumable products servicing 25,000 customers. The business has a 6% market share in large and growing markets.

 

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