NEWSPAPER and magazine wholesaler Connect Group, formerly known as Smith News, yesterday reported a 20 per cent rise in pre-tax profits as acquisitions and cost cutting helped offset a slide in revenues.
The company reported £898.7m in revenue in the six months to the end of February, down 0.7 per cent from a year ago, while profit before tax totalled £22.1m.
Shares in the firm rose 4.3 per cent to 169p yesterday as investors reacted positively to the update.
News and magazine distribution, which makes up most of the business, posted a 1.6 per cent fall in revenues, slightly ahead of forecasts.
Connect has secured 77 per cent of its news wholesale revenue until 2019, due to the extension of its contract with Frontline and Seymour, unveiled this week.
Connect’s books business, however, is still struggling as the company tries to bring in more revenues from digital publishing. Underlying operating profit fell by 33.8 per cent to £2.3m in the half-year.
Chief executive Mark Cashmore said: “We remain focused on delivering on our ongoing diversification strategy, which targets the group generating 50 per cent of profits outside of newspaper and magazine wholesaling by 2016.”