Connect Group, the Swindon-based specialist distributor formerly known as Smiths News, has said it expects its full-year earnings to be higher than expected thanks to a boost from tax credits.
The group, which distributes newspapers, magazines, books and education and health supplies across the UK, told shareholders that tax credits for last year would be above previous management expectations, leading to its earnings per share coming in at a level better than previously forecast.
News of the boost came in a pre-close statement from the group for the year to August 31.
It said since its last update on July 8 each of its divisions had performed in line with management expectations and, as a result, group underlying pre-tax profits were expected to be in line with recent guidance.
Its core newspaper and magazine business Connect News & Media had continued to perform at what it called its “recent robust run rates”. The division includes Smiths News, the UK’s largest news wholesaling business with around 55% market share, which distributes newspapers and magazines for all the major national publishers as well as a large number of regional publishers. Dawson Media Direct, Connect’s international media direct business supplying newspapers, magazines and inflight entertainment technology and content to more than 80 airlines in 50 Countries, performed in line with expectations.
Management actions at its Connect Books division were taking effect and recent performance had stabilised in line with expectations, it said. The division, which serves more than 8,200 customers in approximately 100 countries, includes a number of recognised brands in print and digital bookselling, including Bertram’s, Dawson Books and Wordery.
The performance of its Connect Education & Care division, which includes Trowbridge-based The Consortium, had been in line with management expectations through the peak trading period.
The division serves more than 30,000 customers with an extensive range of 40,000-plus products including stationery, arts and craft and cleaning.
In April Connect Group announced a 20% increase in pre-tax profits to £22.1m for the six months ended February 28 despite a small fall in revenue.
The group will announce its prelim results for the year to August 31 on October 15.