Newspaper distributor Smiths News has set out its intention for further diversification so that non-newspaper and magazine operations account for more than 30 per cent of its operating profits within three years.
The group, which completed the takeover of book distributor Dawson Holdings in August, produced a 10.3 per cent rise in underlying pre-tax profit to £38.6m, despite a 5.2 per cent fall in sales to £1.73bn.
Further acquisitions are on the cards. The group said: “We are actively engaged with acquisition targets. We are targeting the proportion of our non-newspaper and magazine operating profits to be over 30 per cent by FY2014.”
Smiths has made £20m in cost savings and had identified another £10m over the next two years.
The newspaper distribution market has fallen 2.5 per cent on a like-for-like basis over the past year. Smiths said volume declines being partially offset by cover price inflation.
Like-for-like sales figures included the impact of the closure of the News of The World.
“Competing publishers acted swiftly to capture valuable readership, investing in promotions, additional print runs and national TV advertising campaigns – Smiths News estimates that product substitution was as high as 80 per cent.”