LSE:SNWS

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Smiths News plc, together with its subsidiaries, engages in the wholesaling of newspapers and magazines in the United Kingdom, Spain, France, Germany, the Netherlands, and internationally. More Details


Snowflake Analysis

Undervalued with concerning outlook.

Share Price & News

How has Smiths News's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SNWS is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: SNWS's weekly volatility has decreased from 13% to 7% over the past year.


Market Performance


7 Day Return

-1.6%

SNWS

0.6%

GB Retail Distributors

-0.5%

GB Market


1 Year Return

-18.8%

SNWS

6.9%

GB Retail Distributors

-8.2%

GB Market

Return vs Industry: SNWS underperformed the UK Retail Distributors industry which returned 6.9% over the past year.

Return vs Market: SNWS underperformed the UK Market which returned -8.2% over the past year.


Shareholder returns

SNWSIndustryMarket
7 Day-1.6%0.6%-0.5%
30 Day-4.4%5.9%3.0%
90 Day7.4%31.6%14.1%
1 Year-18.8%-18.8%7.8%6.9%-4.5%-8.2%
3 Year-59.4%-62.7%33.0%21.7%3.7%-9.0%
5 Year-75.7%-80.7%53.6%33.5%42.1%14.4%

Long-Term Price Volatility Vs. Market

How volatile is Smiths News's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Smiths News undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SNWS (£0.28) is trading below our estimate of fair value (£1.05)

Significantly Below Fair Value: SNWS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SNWS is good value based on its PE Ratio (5.7x) compared to the XE Retail Distributors industry average (17.8x).

PE vs Market: SNWS is good value based on its PE Ratio (5.7x) compared to the UK market (22.9x).


Price to Earnings Growth Ratio

PEG Ratio: SNWS is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: SNWS has negative assets, so we can't compare its PB Ratio to the XE Retail Distributors industry average.


Next Steps

Future Growth

How is Smiths News forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

17.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SNWS's forecast earnings growth (17.6% per year) is above the savings rate (1%).

Earnings vs Market: SNWS's earnings (17.6% per year) are forecast to grow slower than the UK market (25.3% per year).

High Growth Earnings: SNWS's earnings are forecast to grow, but not significantly.

Revenue vs Market: SNWS's revenue is expected to decline over the next 3 years (-5.2% per year).

High Growth Revenue: SNWS's revenue is forecast to decline over the next 3 years (-5.2% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SNWS's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Smiths News performed over the past 5 years?

-40.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SNWS has a large one-off loss of £13.0M impacting its August 29 2020 financial results.

Growing Profit Margin: SNWS's current net profit margins (1%) are lower than last year (1.7%).


Past Earnings Growth Analysis

Earnings Trend: SNWS's earnings have declined by 40.6% per year over the past 5 years.

Accelerating Growth: SNWS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SNWS had negative earnings growth (-44.5%) over the past year, making it difficult to compare to the Retail Distributors industry average (14.6%).


Return on Equity

High ROE: SNWS's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Next Steps

Financial Health

How is Smiths News's financial position?


Financial Position Analysis

Short Term Liabilities: SNWS has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: SNWS has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: SNWS has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: SNWS's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: SNWS's debt is not well covered by operating cash flow (18%).

Interest Coverage: SNWS's interest payments on its debt are well covered by EBIT (5.8x coverage).


Balance Sheet


Next Steps

Dividend

What is Smiths News's current dividend yield, its reliability and sustainability?

6.61%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate SNWS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate SNWS's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SNWS's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SNWS's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: SNWS is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SNWS's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Jon Bunting (48 yo)

1.17yrs

Tenure

UK£580,000

Compensation

Mr. Jonathan Michael Bunting, also known as Jon, serves as a Chief Executive Officer at Smiths News Plc (formerly known as Connect Group PLC) since June 6, 2020. Mr. Bunting had been Chief Executive Office...


CEO Compensation Analysis

Compensation vs Market: Jon's total compensation ($USD792.47K) is above average for companies of similar size in the UK market ($USD335.68K).

Compensation vs Earnings: Jon's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Jonathan Bunting
CEO & Executive Director1.17yrsUK£580.00k0.24%
£ 166.7k
Anthony Grace
CFO & Director2.17yrsUK£401.00k0.11%
£ 72.6k
Timothy Oglesby
Chief Information & Transformation Officer3yrsno datano data
Stuart Marriner
General Counsel & Company Secretary12.25yrsno datano data
Stuart Godman
Chief Commercial Officer3yrsno datano data
Alissa Davis
Head of Rewardno datano datano data
Peter Birks
Chief Executive Officer of Tuffnells2.25yrsno datano data
Colin White
Deputy Company Secretaryno datano datano data

2.8yrs

Average Tenure

48yo

Average Age

Experienced Management: SNWS's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jonathan Bunting
CEO & Executive Director1.17yrsUK£580.00k0.24%
£ 166.7k
Anthony Grace
CFO & Director2.17yrsUK£401.00k0.11%
£ 72.6k
Mark Whiteling
Senior Independent Non-Executive Director3yrsUK£54.50k0.033%
£ 22.5k
Denise Collis
Independent Non-Executive Director5.08yrsUK£49.00k0.020%
£ 13.7k
David Blackwood
Independent Non-Executive Chairman0.67yrUK£42.00k0.098%
£ 67.6k
Michael Holt
Independent Non-Executive Director2.25yrsUK£149.00kno data

2.6yrs

Average Tenure

59yo

Average Age

Experienced Board: SNWS's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: SNWS insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Smiths News plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Smiths News plc
  • Ticker: SNWS
  • Exchange: LSE
  • Founded: 2004
  • Industry: Distributors
  • Sector: Retail
  • Market Cap: UK£68.987m
  • Shares outstanding: 245.07m
  • Website: https://www.corporate.smithsnews.co.uk

Number of Employees


Location

  • Smiths News plc
  • Rowan House
  • Cherry Orchard North
  • Swindon
  • Wiltshire
  • SN2 8UH
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SNWSLSE (London Stock Exchange)YesOrdinary SharesGBGBPSep 2006
SMWP.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDFeb 2009

Biography

Smiths News plc, together with its subsidiaries, engages in the wholesaling of newspapers and magazines in the United Kingdom, Spain, France, Germany, the Netherlands, and internationally. It also supplies...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/23 02:08
End of Day Share Price2021/01/22 00:00
Earnings2020/08/29
Annual Earnings2020/08/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.