Smiths News expecting smaller hit from McColl's administration

Smiths News said on Monday that it now expects to take a lower charge from the administration of convenience store chain McColl’s than it anticipated.

In light of the latest guidance from the administrator, it now expects the overall bad debt risk to reduce from £5.6m to between £3.4m and £4.5m.

Smiths said it continues to supply McColl's under its new ownership on improved payment terms, which provides partial mitigation to the impact on cash flow.

The company also confirmed it will maintain payment of the planned interim dividend of 1.4p per share, as announced as part of its interim results earlier in the month.

"Beyond the impact of the McColl's administration, underlying trading continues to be in line with expectations and, given the company's on-going cash generation and strong net debt reduction, the board continues to expect to be in a position to recommend a final dividend for FY2022 up to the full distribution permissible under the company's current banking facilities (£10m per financial year), for payment in February 2023," it said.