Smiths News has signed a refinancing agreement to replace the current senior finance agreement which was due to mature on 31 August 2025.
The firm, based at Kembrey Park, is the leading distributor of newspapers, magazines and ancillary services to retailers across the UK.
The new refinancing agreement with two of the company’s existing lending syndicate, Santander and HSBC, comprises a £40 million revolving credit facility with an additional £10m uncommitted accordion facility.
The Agreement removes the existing cap on dividends and distributions, which was previously capped at £10 million per financial year. The removal of this restriction will enable the Company to implement its revised capital allocation policy that comprises:
- Maintaining a strong balance sheet, with a Bank Net Debt: adjusted EBITDA ratio of less than 1.0x
- Continued investment in both core business and organic growth
- Payment of sustainable ordinary dividend, maintaining 2x dividend cover
- Disciplined approach to inorganic growth, focused on bolt-on acquisitions with clear accretive returns to enhance shareholder value
- Further returns to shareholders when appropriate.
CEO Jonathan Bunting said: “We are extremely pleased to announce today’s refinancing news, reflecting the clear progress we have made in strengthening the Company’s underlying finances and reducing the net debt of the business.
"The removal of the distribution cap also enables us to implement a revised capital allocation policy that will support our goals of investing in business capabilities, exploring inorganic adjacent market opportunities and delivering value to investors.”
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