Trading at Smiths News over the last quarter of Its 2020 financial year was stronger than management’s revised expectations following the further easing of UK-wide lockdown measures.
The Swindon-based business said the improvement was a result of a better than anticipated sales performance following the return to trading of the larger high street stores, supported by continued robust cost control across the business.
In the fourth quarter, to 29 August 2020, Smiths said trading EBITDA was £10m with strong cash generation.
As a result, the group expects to report adjusted EBITDA for the 2020 financial year of £38.5m to £39m, above the top-end of the guidance previously announced in July 2020.
Smiths News’ parent Connect Group also updated on a Tuffnells working capital loan repayment.
On its disposal of the logistics business in May 2020, Smiths News made available a temporary working capital loan of up to £10.5m to the purchaser, of which £6.5m was drawn down. The purchaser has recently informed Smiths of its successful refinancing and has repaid the amount plus interest in full.
As a result, the remaining part of the loan has been cancelled and Smiths has released the security held over seven Tuffnells properties in England.
Chief executive Jonathan Bunting said: “Despite the uniquely challenging times Smiths News continues to deliver against all the priorities we set earlier this year. Service and cost control have been first rate, driving a strong result and giving us positive momentum into the first quarter of the current year.”