Smiths News Shares Surge as Contract Win ‘Transformational’ Says Analyst

Smiths News (LON: SNWS) shares rallied 9.8% on Wednesday after the UK’s largest news wholesaler announced a long-term national distribution contract with News UK, publisher of The Sun, The Times and The Sunday Times, in a deal analysts at Edison described as transformational.

The agreement extends Smiths News’s relationship with News UK through July 2037 and expands its distribution territories to cover all of Great Britain from July 2027, lifting the company’s distribution footprint from approximately 55% of the UK to 100%.

The contract is expected to generate an incremental revenue uplift of approximately £125 million per annum from July 2027, equivalent to roughly 12% of the company’s fiscal 2026 revenue of £1.032 billion, according to Edison analyst Jonathan Day.

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Day highlighted four key aspects of the deal: national distribution capability that could be leveraged across other customers and verticals, improved revenue visibility extending well beyond existing contracts that run to around 2029, an expected return on capital above Smiths News’s hurdle rate, and earnings accretion from fiscal 2028 onwards.

Smiths News said it expects to fund the network expansion within existing cash resources and financing arrangements, and confirmed it intends to maintain ordinary dividend guidance for fiscal 2026 and 2027 at or above the current consensus of 5.2 pence per share.

Chief Executive Jonathan Bunting called the announcement “a significant milestone in securing a sustainable future for print news distribution,” noting it deepens a partnership spanning more than 50 years and will allow the company to freeze delivery service charges for retail customers for the life of the contract.

Edison maintained its estimates and 96 pence per share discounted cash flow valuation pending further financial guidance, which the board expects to provide at preliminary results on Nov. 4.