Source - RNS
RNS Number : 7892I
Connect Group PLC
13 August 2019
 

This announcement contains inside information

 

 

13 August 2019

 

Connect Group PLC

("the Company" or "the Group")

 

 

Trading Update and Sale and Leaseback

 

 

Trading update

 

Since the Group's interim financial results on 1 May 2019, overall trading is slightly below market expectations, with a strong performance in Smiths News partially offsetting a slower turnaround performance in Tuffnells, where H2 performance to date has improved on H1 2019 in line with guidance previously given.

 

The Company will publish its preliminary financial results on 6 November 2019. 

 

Sale and Leaseback

 

In January 2019, the Group announced that as part of its capital allocation strategy it would take a more prudent and disciplined approach to capital management.  An important aspect of this included a potential sale and leaseback of up to 16 freehold and long-lease properties within the Tuffnells estate.  The process was expected to raise up to £35m of net proceeds before tax.  Since then, the Group has undertaken a thorough tender process.  However, due to the current market conditions and outlook, the proposals received did not meet the Board's expectations in respect of value, economic return and timings.  Accordingly, it is unlikely that the Group will conclude such a deal before the end of its current financial year and, as a result, net debt is expected to remain flat on HY2019 (net debt at 28 February 2019 was £77.5m, representing a net debt/adjusted EBITDA ratio of 1.95x).  The Group continues to target a reduced net debt/EBITDA ratio of 1x by FY2021, with repayment achieved through a combination of surplus free cash from operations as well as proceeds from any future sale and leaseback of Tuffnells properties as and when appropriate. 

 

Enquiries:

 

Connect Group PLC

Jos Opdeweegh, Chief Executive Officer

Tony Grace, Chief Financial Officer

01793 563641

www.connectgroupplc.com 

 

Buchanan (Financial PR)

Richard Oldworth / Jamie Hooper

[email protected] 

www.buchanan.uk.com

 

 

Person responsible for arranging release of this announcement:

Stuart Marriner, General Counsel & Company Secretary

Connect Group PLC

Rowan House

Cherry Orchard North

Kembrey Park

Swindon

SN2 8UH

email: [email protected]

LEI: 2138004O33ONVOOQXB02

 

About Connect Group

Connect Group PLC is a UK based specialist distributor and a leading provider of distribution solutions in complex and fragmented markets. The Group's networks are focused on serving high density early morning deliveries and the demands of mixed and irregular sized freight.

The Group's core businesses are each leading players in their markets:

 

Smiths News

Smiths News is the UK's largest newspaper and magazine wholesaling business with an approximate 55 per cent. market share. It distributes newspapers and magazines on behalf of the major national and regional publishers, delivering to approximately 27,000 customers across England and Wales on a daily basis. The speed of turnaround in the UK and density of Smiths News' coverage is critical to one of the world's fastest physical supply chains.

 

Dawson Media Direct (DMD) supplies newspapers, magazines and inflight entertainment technology and content to over 80 airlines in 50 countries. Delivering to strict time windows with security accreditation, DMD serves the specialist needs of airlines and travel points in the UK and worldwide with printed and digital media.

 

Tuffnells

Tuffnells is a leading distributor of mixed and irregular freight, serving approximately 5,000 small and medium sized enterprises across the UK. Its network of 37 depots collects and delivers mixed parcel freight consignments, specialising in items of irregular dimension and weight ("IDW"), examples of which include bulky items, building materials and automotive parts. With a mix of local and national clients, Tuffnells completes up to 70,000 daily deliveries, offering a range of timed services that are responsive to customer demand.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
TSTLLFLDTFIFLIA

Related Charts

Connect Group (CNCT)

-0.90p (-2.41%)
delayed 17:45PM