“Whilst economic conditions in the UK remain challenging, the Group continues to make significant progress across a number of key business objectives. As a result, the board remains confident about current trading prospects and expects a year of growth.
During the period total Group revenues increased by 52.1% compared to last year, benefiting from the acquisition of Bertrams in March 2009 and the early adoption of former Dawson News territories in August 2009. Whilst revenues for Smiths News declined 2.1% on a like for like basis (after adjusting for newspaper price discounting from which our margin is protected) this compares favourably with the trends experienced in the preceding year and indicates an underlying improvement in the market, particularly in magazines.
We are also pleased to announce further new regional press contract gains with Trinity Mirror and Newsquest that are expected to generate an additional £11m of revenue on an annualised basis. The new territories are in Newcastle and Birmingham (Trinity Mirror) and Oxford (Newsquest) with titles including Birmingham Mail, Oxford Mail and Newcastle Journal.
Integration of the former Dawsons news distribution territories remains our primary business objective. The installation of SAP, rationalisation of the network and implementation of our logistics systems and KPIs are critical to synchronising business processes and to the reduction of inherited operating cost. We are progressing well with 8 of 17 depots now successfully converted and the closure of 5 locations across the estate. Management remain confident of completing the integration during the current year within expected cost.
Bertrams has made excellent progress under the Group’s ownership and reported good trading over the Christmas period together with strong sales to overseas customers.
There has been no change in the underlying financial position of the Group since the year ended 31 August 2009. The Group continues to operate well within its bank facilities.
The Group will announce its interim results for the six months ending 28 February 2010, on 22 April 2010.”
