Smiths News anticipates smaller than expected hit from McColl’s administration
Newspaper distributor Smiths News has said it is anticipating a smaller than expected hit from McColl’s administration.
The London-listed firm, which continues to supply McColl’s under Morrisons’ ownership, has said it has reduced its debt to £5.6m.
After McColl’s went into administration, Smiths News took action to mitigate McColl’s bad debt risk, the supplier said yesterday
Smith News said it anticipates the overall bad debt risk to further narrow, to be in the region of £3.4m to £4.5m.
This will impact its statutory profit for the year, it said.
Improved payment terms for the supplier have provided “partial mitigation” to a hit on cash flow.
Smith News said it is intending to maintain payment of a planned interim dividend of 1.4p per share. Its board is set to recommend a final dividend for the year up to the full distribution permissible under its banking facilities of £10m per financial year, for payment in February next year.
It comes after grocer Morrisons Morrisons coughed up some £182m to snap up beleaguered convenience store operator McColl’s, defeating a rival bid from Asda’s owners.
Unsecured creditors of McColl’s can expect estimated distribution prospects of between 20 per cent and 40 per cent, administrators confirmed.
Smiths News’ share price was boosted by almost one per cent on Monday afternoon.