Connect bags new News UK distribution contract

Connect Group has won an extension to its long-term contract with the publisher of The Sun, The Times and Sunday Times newspapers, some good news to follow its Panini-related profit warning last month.

Following a competitive tender, Rupert Murdoch's News UK renewed its UK contract with Connect's Smiths News arm through to July 2024., securing revenues of around £200m per year at current values for the company, which equates to around 13% of full year group revenues.

Chief executive Mark Cashmore said: "Visibility of future revenues underpins the ability of Smiths News to continue to deliver strong profits and cash. The contract is good news for the supply chain as a whole and positions the group well to secure a similar outcome with our other publisher partners".

Last month, Connect shares were sent tumbling as it slashed full-year pre-tax profit expectations following an "extremely disappointing" performance since its interim results in May, with Cashmore falling on his sword along with his finance chief.

Freight and parcel handler Tuffnells was the cause of the problems, with a material drop in volume and increased costs, plus disappointing sales of Panini World Cup stickers and albums, which the company distributes.