Delivering

together

Annual Report 2025

Welcome to our Annual Report and Accounts 2025

Headline results

Our performance on key financial measures

A strong

performance

Our performance

this year has

delivered operating

profit ahead of

expectations, with

strong levels of

free cash and a

significant reduction

in net debt. This is

testament to our

robust business

model, strong

balance sheet and

progress we continue

to make.

Jonathan Bunting

CEO

Read more about us on our website

→ www.smithsnews.co.uk

Total Statutory Revenue

£1,064.0m



Adjusted Operating Profit

£39.1m



Adjusted Profit after Tax

£27.0m



Statutory Profit after Tax

£28.3m



Adjusted Earnings per Share

11.1p



Free Cash Flow

£36.1m



Average Net Cash/(Debt)

£3.3m



Bank Net Cash/(Debt)

£3.3m



Dividend per Share

8.55p



£1,064.0m

£1,103.7m

£39.1m

£27.0m

£24.7m

£28.3m

£25.5m

11.1p

10.3p

£36.1m

£7.3m

£3.3m

(£11.7m)

£3.3m

(£11.0m)

8.55p

7.15p

Smiths News plc Annual Report and Accounts 2025

Strategic Report

Smiths News in Focus 02

Business Model 04

Strategy 06

Smiths News Recycle 08

Chairman’s Statement 12

CEO's Report 14

Key Performance Indicators 16

Operations 20

People 28

Stakeholder Engagement

and S172 Statement 32

Employee Engagement - Q&A

with Michael Holt 40

Sustainability Report including TCFD 42

Financial Review 61

Viability Statement 65

Risk Management 67

Governance

Chairman’s Statement on Corporate

Governance 74

Corporate Governance 76

Audit Committee Report 92

Nominations Committee Report 102

Directors’ Remuneration Report 106

Directors’ Report – Other

Statutory Disclosures 127

Directors’ Responsibilities 130

Financial Statements

Independent Auditor’s Report

to the Members of Smiths News plc 131

Group Income Statement 138

Group Statement of

Comprehensive Income 139

Group Balance Sheet 140

Group Statement of

Changes in Equity 141

Group Cash Flow Statement 142

Notes to the Accounts 143

Company Balance Sheet 170

Company Statement of

Changes in Equity 171

Notes to the Company Balance Sheet 172

Glossary 175

Shareholder Information 177

Q&A with

Employee

Engagement

Director

Another year

of progress

Our vision and

strategy

Listening to our

stakeholders

Non-financial information statement

The Company has complied with the requirements of s414CB of the Companies Act 2006

by including certain non-financial information within the Strategic Report as follows:

• the business model on page 04;

• information on environmental, employee, social, human rights, anti-corruption and

anti-bribery matters (non-financial matters), including the relevant policies, due

diligence process implemented in pursuance of the policies and outcomes of those

policies, on pages 91 and 92;

• principal and emerging risks identified in relation to non-financial matters, including

a description of the business relationships, products and services which are likely to

cause adverse impacts in those areas of risk, and a description of how the principal risks

are managed, on pages 67 to 73;

• all Key Performance Indicators (KPIs), including those in relation to non-financial

matters, are on page 16 to 19;

• the Financial Review, which includes, where appropriate, references to, and additional

explanations of, amounts included in the Group Financial Statements on pages 138

to 169;

• a statement explaining how the directors have had regard to the matters in s172 of the

Companies Act 2006 in performing their duties on page 32 to 39; and

• future developments in the business on pages 06 to 11.

Driving sustainability

Strategic Report Governance Financial Statements

The UK’s early

morning specialist

Logistics and Warehousing

We offer a full range of logistics and warehouse

services, founded on our leadership in news

delivery, and now increasingly applicable to

adjacent markets. Leveraging these capabilities

has allowed us to extend our product range,

working with suppliers who want access to our

customers together with an end-to-end supply

chain solution.

Pick and Pack

Every day, we receive bulk supplies from our

publishers and other suppliers, separating and

amalgamating these into individual customer

consignments. While newspapers and

magazines are typically prepared for immediate

or next day distribution, our depots also hold

supplies for replenishment of higher value

and less time sensitive items such as monthly

magazines, books, and collectables.

Daily deliveries

Operating seven days a week, we deliver to,

and collect from, more than 22,000 outlets,

typically arriving well before 6.30am. Every

morning, across England and Wales, we ensure

that newspapers and magazines are widely

available, from major city centres or remote

rural villages.

Returns collection

When delivering today’s supplies, we collect the

unsold copies of yesterday’s newspapers and

out of date magazines. These are individually

scanned and credited accordingly, with

processing completed in a matter of hours. This

specialist capability makes us one of the UK’s

leading returns logistics partners.

Track and trace

Our deliveries are supported by technology

that underpins demanding KPIs, ensuring the

same high-quality service for suppliers and end

customers. We scan all supplies from arrival

at our distribution centres to their delivery

and returns collection. Recent investments

will enhance our ability to provide real time

information for customers and suppliers.

Recycling

Using on-site facilities, we sort and process

unsold copies for recycling by accredited

partners. Our new venture Smiths News

Recycle extends our capabilities to include

paper, cardboard and plastics. High value

items, such as collectables, can be stored

and returned to suppliers if required.

Invoicing

As a wholesaler we take ownership of our

supplies, invoicing retailers and forecasting

future demand. We also work closely with

retailers, using EPOS data to flow in and

replenish supplies as required. The combination

of deliveries and invoicing provides a simple

solution for many suppliers wanting access to

our customers.

Market insight

Our supply and invoice systems give us a

complete view of the market, with the most

comprehensive data set in the industry. This is

critical to our added value role and competitive

advantage in our traditional markets, but

increasingly we are using our insight to identify

sales opportunities for new suppliers.

This snapshot of our business, together with our Strategic Report, shows

how we are working to fulfil our vision of being the UK’s leading provider

of early morning, end to end, supply chain solutions.

Smiths News is the UK’s largest wholesaler of newspapers and magazines, serving publishers and

retailers for over 200 years. With 55% market share, our scale and expertise is unmatched in the

sector, making us an essential partner across the supply chain.

We are proud of this heritage and the difference we make to communities every day. But we are

also looking forward, expanding our product range and evolving our services to meet the growing

demand for early morning delivery and collection.

More information on business model

and strategy is included in our

Business Model on page 04

Strategy on page 06

55%

market

With 55% market

share, our scale

and expertise is

unmatched in the

sector, making us

an essential partner

across the supply

chain.

Smiths News plc Annual Report and Accounts 2025

Smiths News in Focus

Recycling and Waste

Visiting our customers daily, with convenient

collections and transparent pricing we are

ideally placed to be a recycling collection

partner of choice. Targeting the needs of small

and medium sized retailers we are growing

our capacity and capability at pace.

In only three years our recycling business

Smiths News Recycle, has grown from start up

to servicing just under 5,000 customers. New

investment allows us to extend our recycling

offer from paper and cardboard to a wider range

of recyclable materials, such as metal cans

and plastics.

We have ambitious plans for further growth.

Demand for recycling and waste management

solutions is growing organically, driven by

greater awareness and the desire, across all of

society, to improve sustainability and reduce

waste. New legislation formalises this into strict

requirements for businesses which opens the

door to new and innovative solutions.

More information on recycling capabilities is

included in Smiths News Recycle on page 08.

Integrated Network

Our network is structured to meet

the needs of our customers.

Using a hub and spoke configuration, we

have 34 locations across England and

Wales, providing wide coverage and efficient

capability. Operating seven days a week

it delivers an unparalleled early morning

capability that was founded on newspapers

and magazines but is increasingly applicable

to other products and services.

Strategically positioned distribution centres

enable an efficient point of entry for supplies

that can then be trans-shipped across the

network – while our final mile locations ensure

we reach our customers in the tightest of

time windows.

Our network

Key

Hub Spoke

Final Mile

Our final mile delivery is extensive and well

tested, with a specialist early morning capability

that is unmatched within our territories.

Historically focused on the unique needs of

newspapers and magazines, we are opening

our network to others and working closely with

suppliers and distributors who want access to

those skills and services.

In FY2025 we delivered over one million units

outside of our core news supplies and we

plan to increase this by working with more

suppliers and partners in FY2026. Looking

ahead, our flexible depot configuration will be

key, with larger distribution centres offering

a convenient regional or even single point of

access to our wider final mile network. Ongoing

investments in technology will also enhance our

live information flows for both customers and

suppliers, adding value to deliveries.

More information on our final mile investments

and capabilities is included in Delivering

Excellence on page 20.

The detailed configuration of our transhipment

and final mile routing is continually reviewed for

optimum efficiency, flexibility and resilience. This

process is supported by technology that ensures

transparent reporting of demanding KPIs.

Meanwhile, recent investment in our systems

is further enhancing our capability, making us

more ‘product agnostic’ and less centred on our

historic specialism of news distribution.

Strategic Report Governance Financial Statements

Business Model

Our business model supports

both our existing operations

and our ambitions to extend

our market reach

Established over decades of

market leadership across the news

and magazine distribution, our

extensive market reach and an

unwavering commitment to service

quality and execution ensures we

have the right template to further

extend our activities.

Our model not only delivers robust trading

metrics, but also provides for investment,

industry leadership and innovation, delivering

attractive returns for our investors.

Trusted

delivery

Unique

capability

Shared

efficiencies

Agile

approach

Added

value

Long term

partnerships

Asset

light

Cash

generation

Leveraging

assets

Smiths News plc Annual Report and Accounts 2025

Our business model

is well placed to

meet the needs of

all stakeholders,

supporting

the balance of

investment for the

future, our ongoing

commitments to

our people and

communities, and

attractive returns

for shareholders.

The key components of our business model underpin our vision

and strategy to be the leading provider of early morning, end to end,

supply chain solutions.

Outstanding service

Trusted delivery

We work to meet the highest standards in our

sectors, tracking and monitoring every step of

the delivery journey – from receipt of goods

to returns and recycling. This transparency of

performance drives efficiency and promotes

the trusted partnership on which our business

model is founded.

Shared efficiencies

In providing a shared route to market we

ensure that efficiencies benefit our suppliers

and customers, improving our competitive

advantage and further embedding our

relationships so that we become the partner

of choice in our chosen supply chains.

Added value

We offer a range of added value and premium

services to our customers and suppliers.

From in-store merchandising to our ability

to reach specialist outlets or provide bespoke

distributions, we have the capability to offer

more when required, helping our customers run

their business more efficiently and profitably.

Strong finances

Long-term partnerships

As the UK’s largest news wholesaler, we have

long-term contracts that provide security

and visibility of our core revenue streams.

Furthermore, the relative predictability of our

sales and revenues allows us to plan and invest

with confidence, limiting risk over the lifetime of

our agreements.

Cash generation

Our invoicing and payment cycle promotes

positive cash generation, allowing us to operate

with low levels of debt and supporting attractive

returns to shareholders.

Asset light

By using final mile contractors, we have the

ability to flex our service in response to demand

and are not burdened with the high fixed costs

of a large fleet. The model enhances our ability

to test and trial new initiatives as we seek to

broaden our market reach.

Supporting growth

Unique capability

We have a unique early morning capability that

delivers a scale route to market for our supply

partners and customers. Every day we reach

approximately 22,400 customers, typically

before 6.30am, with reliable deliveries and

collections that are increasingly attractive to

new customers.

Agile approach

Our established network and technology allows

for an agile approach to growth opportunities,

using a ‘trial-refine scale’ methodology that

ensures opportunities can be efficiently

accommodated and that new processes

are both sustainable and competitive.

Leveraging assets

In leveraging our existing assets the model

is well placed to ensure our targeted growth

opportunities deliver positive returns early in

their lifecycle. As we expand our customer base

and services we are investing in more generic

systems that allow us to be more ‘product

agnostic’ in the opportunities we pursue.

Strategic Report Governance Financial Statements

Strategy

A focused strategy

founded on our strengths

We will offer customers an unrivalled service,

allowing them to recycle more, reduce their

waste costs and achieve sustainability goals,

while actively supporting the circular economy.

In the next phase of our growth, we will be

targeting opportunities to increase scale

through new customers, new waste categories

and by providing solutions that simplify the

in-store management ahead of the expected

introduction of future legislation and technology.

Category Expansion

Our ambition: To be the leading provider

of outsourced direct-to-store categories

for both large-scale retailers and smaller

independents.

Working with industry partners we provide

end-to-end solutions for large retailers, initially

supplying books and DVDs. The comprehensive

service encompasses category management,

sales based ordering and replenishment, and

fully-tracked local deliveries within the news

and magazines operations.

For smaller retailers, we are developing carefully

targeted product ranges to include cards, gifts

and toys. The service is integrated with our early

morning deliveries, enhancing profitability for

all partners while supporting the profitability of

newspapers and magazines too. Through our

news deliveries we already have a substantial

customer base to target and are working to

leverage this route to market for other leading

suppliers and brands.

Final Mile Deliveries

Our ambition: to become a recognised

national provider of early morning final mile

solutions for the B2B sector.

The market for final mile solutions is increasing

at pace, fuelled by consumer expectations

of ever more speedy delivery, the growth of

e-commerce in B2B markets and the demand

for near instant fulfilment of time sensitive

products. Traditional in-house operations

struggle to meet the increasing expectations

of both speed and quality.

These accelerating trends have expanded

the opportunity for early morning specialists

such as Smiths News. We now offer a range

of early morning distribution solutions including

warehousing, cross docking, storage, final

mile deliveries and returns. Using our local

distribution centres, we have proven our

ability to offer both reach and repeatability

for customers who need reliable tracked

delivery service.

Looking ahead, we are working, first to trial and

then to embed, a completive menu of premium

services for time sensitive B2B suppliers —

backed by technology that provides a ‘product

agnostic’ solution encompassing storage,

picking and delivery.

Focusing our ambitions

Building on our early morning

capability, our strategy is focused on

four complementary market pillars.

News and Magazines

Our ambition: To be the leading distributor

of newspapers and magazines, delivering

service excellence and maximising the long-

term sustainability of the category for all

stakeholders.

While volumes of printed media are in overall

decline the market remains large, relatively

predictable and profitable to serve at scale. We

will continue to seek efficiencies to help offset

the impacts of inflation while pursuing growth

opportunity categories, such as higher-margin

collectables and complementary products

(cards, books and gifts) for our established

customer base. From a customer perspective

we are working to offer leading services and

technology that make the category easier and

more profitable.

Recycling and Waste

Our ambition: To be one of the UK’s leading

recycling and reverse logistics partners,

delivering value for customers through cost

efficiency, unrivalled service delivery and

industry leading compliance.

Smiths News Recycle is our flagship recycling

service, ideally positioned to meet the needs

of those customers that require a regular and

local collection.

Category Expansion

Recycling and Waste

News and Magazines

Final Mile Deliveries

Smiths News plc Annual Report and Accounts 2025

Our strategy is

founded on an

expertise in early

morning delivery and

collection, leveraging

the unique strengths

and capabilities

that continue to

serve us well in

our established

markets. Through

a combination of

process, people

and industry

partnerships, we

are expanding our

portfolio of revenue

streams that will

further improve our

resilience and ensure

we can continue

to generate strong

and sustainable

shareholder value.

Jonathan Bunting

CEO

Leveraging our strengths

At Smiths News we have many of the

capabilities that are helping us to grow and

diversify our business. We are building from

these strong foundations, targeting carefully

chosen market opportunities that diversify

our portfolio without distraction from our

established operations.

Early morning delivery

We have unique capability to deliver, at scale,

in time windows that other distributors would

struggle to match. Every day we make our

deliveries before 7.00am, reaching customers of

all sizes and in diverse locations, from city centre

superstores to small independent retailers.

Recycling and waste

With the capability for daily pick up and swift

processing we are ideally placed to capitalise

on the growing demand for returns and waste

services, particularly in serving small to medium

sized enterprises. Our investment in processing

capability will allow us to scale operations while

new legislation is expected to increase demand

for new and convenient solutions such as those

offered by Smiths News Recycle.

Final mile

Our network, though founded on newspapers

and magazines has capability to distribute

time sensitive consignments for many more

customers and product groups. In FY2025

we delivered over one million non-news units

through our final mile network.

Quality assurance

All our core deliveries are tracked, and with

the ability to collect as we go, we can provide

a closed loop of sortation, delivery and

collection, supported by information flows

that ensure compliance and provide

reassurance to all stakeholders.

Inventory and invoicing

As a wholesaler, we can take ownership and

invoice directly to customers for the supplies

they receive. We have sophisticated systems

to allocate and invoice across thousands

of individual product lines, with dynamic

forecasting algorithms that drive efficiency

and minimise waste.

Customer support

Our local distribution hubs are backed by a

centralised offshore call centre that provides

dedicated telephone support for all customers.

Large national chain retailers benefit from

EPoS integration and have dedicated account

management, while our suppliers are backed

by a dedicated service centre to assist with

allocation, sales and future forecasting.

Strategic Report Governance Financial Statements

We have

excellent customer

satisfaction and

are confident in

expanding the

scale.

Smiths News Recycle

Our flagship recycling

service is simple,

convenient and assured

Smiths News Recycle

offers a uniquely

convenient, affordable

and accredited solution

for businesses.

Using our established network of

early morning deliveries, we collect

dry waste materials on a daily

basis, allowing customers to focus

on their core business, sure in the

knowledge that their materials are

processed to accredited standards.

The early morning collections are

simple and convenient with flexible

payment options, and importantly,

early morning collections that

don’t disrupt business hours – as a

result we are generating customer

satisfaction scores and are

confident in expanding the scale

and scope of our operations.

Smiths News plc Annual Report and Accounts 2025

A simple and convenient solution

Participating retailers

are provided with

specially marked

recycling bags

The filled bags are left

in an agreed location

for pick up the next

morning

No limits to the

number of bags or

collections

Simple

Collections are

available seven

days a week

Daily collections

mean there is no

need to book slots

Pick-ups are typically

completed before

store opening

Convenient

The waste is sorted

and recycled through

accredited partners

Straightforward

pricing, with no

lengthy contract

commitment

Customer support

is available online

and through our call

centres

Assured

Our solution is designed

to be simple, convenient

and assured.

We offer a daily collection of dry

mixed recycling (DMR), with early

morning pick up and a no-fuss

process for customers to follow.

It’s designed to help customers

save time and money and free up

space. Independent customers can

opt for a fixed fee or ‘pay as you go’

contract.

The service dovetails to our daily

delivery routes and draws on our

established expertise in processing

newspapers and magazines.

Vision and

opportunity

Our vision for Smiths News

Recycle is to be one of the UK’s

leading recycling partners,

delivering value for customers

through cost efficiency, unrivalled

service delivery and industry

leading compliance.

This is an ambitious goal that we

know will take time to achieve, but

we are confident of our ability to

succeed. Our progress to date is

built on a long and successful track

record in processing paper waste,

which is why we believe Smiths

News Recycle can become a

household name in its markets,

a leading recycling partner of

choice, and a trusted partner to

our customers.

Our confidence is founded on

a customer proposition that is

straightforward and yet unique to

the marketplace. Leveraging our

existing daily deliveries we offer:

• Seven day a week, early morning,

collection

• Environmental accreditation

• Traceability through our scanning

of every bag

• Accurate data and reporting

• Low additional mileage giving

positive sustainability rating

Looking ahead, we see further

opportunities in the waste and

recycling sector and will plan on

expanding our services over time.

Experienced leadership

In July 2025 Adam Wylie joined the

business as Managing Director of

Smiths News Recycle. He brings a

wealth of experience in the recycling

sector, having spent 20 years in

the industry, including 17 years at

Veolia for which he was latterly

the Managing Director of its UK

commercial business. Adam also

has a strong operations background

with experience of acquisitions and

business transformation.

Strategic Report Governance Financial Statements

From regional trials to

national provider

Smiths News Recycling was

first launched in 2022 – initially

as a small-scale, exploratory,

trial to a limited number of

customers in Liverpool and

the West Midlands. Customer

feedback was so positive that

it quickly became clear we

were uniquely well placed to

serve what was a sizable and

growing gap in the market.

From those early beginnings we have

grown the business so that it now

operates across our entire network, and

we are expanding our customer base

to retailers outside of our traditional

customer base.

Growing market

Demand for recycling solutions is growing,

fuelled by legislation and increased customer

expectations of good environmental practice.

New legislation (introduced in 2025) now

requires businesses with more than ten

employees in England to arrange for the

collection of their core recyclable waste

streams. By 2027 this will apply to all business,

creating real challenges for thousands of small

businesses and opening the door to new and

innovative solutions.

In particular, the forthcoming DMR regulations,

which includes cardboard, paper, cans and

plastic bottles, gives rise to significant issues

for many small and medium-sized retailers with

limited storage facilities and a shortage of time

for sortation and self-managed disposal.

It is in this environment that we have taken

opportunity to invest for the future.

Investing for growth

Our established footprint has provided an

excellent base to launch the business, but

it was always clear that we would need to

achieve greater scale and capability.

Having thoroughly tested our ability to serve

customers efficiently, we have begun a

programme of investment to ensure we can

capitalise of the range of opportunities in the

recycling market.

In FY2025 we have invested in facilities and

infrastructure to handle greater volumes and

ensure that processing can be managed

efficiently at our distribution centres. In

particular, we have needed to install items such

as compactors and storage units that give us

greater capacity and capability for expansion.

The investment also allowed us to increase the

scope of our recycling from the initial plastic and

cardboard to a full mix of DMR waste. This is

vital to ensure we can provide customers with

the simple no-fuss solution that meets the latest

legislation and saves them time and money.

2022

Initial Trials

Confirming strong

demand and nascent

opportunity

2025

Fit for the Future

Investing in capability

and capacity

2024

Scaling Up

Growing our

customer base

2023

Network Roll Out

Testing of service and

pricing options

2026

Driving Growth

and Opportunity

Pursuing new

customers and

expanding our services

A timeline of Smiths News Recycling

Did you know?

An estimated 6.5 billion

single-use drink bottles and

cans go to waste, rather than

being recycled, every year.

That's over 17 million every day.

Smiths News Recycle continued

What is DMR?

Dry Mixed Recycling (DMR) is a collective

term for clean recyclable materials,

such as paper, cardboard, metal cans,

and plastics. Driven by legislation, the

requirement to separate DMR from other

recyclables is a strategic significant shift

in our Government’s approach to waste

management, requiring businesses to

find sustainable alternatives to historic

disposal methods. Small businesses

and particularly retailers have significant

quantities of DMR from product

packaging and, for many the burden of

storage and disposal will increase as new

requirements come into force.

What are Deposit Return

Schemes?

Growing at pace across Europe, deposit

return schemes are a means of improving

recycling rates by offering consumers an

incentive to return suitable items. Most

typically, a refundable deposit is charged

on single-use bottles and cans, that

are returnable to designated collection

points. The development of reverse

vending machines (which automate the

refunding credits) is intended to make the

process simple for consumers – these

are often sited at retail premises. The

UK Government currently proposes to

mandate deposit return schemes across

various regions of the UK by 2027.

Smiths News plc Annual Report and Accounts 2025

Customers

receive bags for

their waste

Collections are made

early morning

Waste/recycling is left

in the marked bags

for pick up

We bring back to

our depots, then sort

and consolidate the

waste into bulk

consignments

We work with specialist

recyclers to dispose

of the waste

sustainably

How the service

model works

Customer satisfaction

This scheme has

been an absolute

lifesaver for us as

we go through a lot

of cardboard and

plastic. Extremely

timesaving for us as

a business and I have

built a good rapport

with the driver who

collects our recycling.

Mercury News Shop

It's convenient as

there is daily pick

up of recycling waste,

which makes our

life easy.

Priom Limited

100% recommend

to other retailers! It

makes our lives easier

as we don’t have to

recycle off-site. We

have had no failed

pick ups.

Pasture Lane Store

Strategic Report Governance Financial Statements

I’m pleased to confirm that

the business has delivered a

strong financial performance,

exceeding market expectations

for profitability, while continuing

to strengthen the balance sheet

and invest for growth. The Board’s

commitment to meeting the needs

of all stakeholders remains the

bedrock of our strategy and it’s

gratifying to be able to highlight

further progress that will benefit all

parties.

Our results this year have been driven by

the combination of operational excellence

and strong sales across our collectables

market. Critically, the news wholesaling

operation continues to deliver on its twin

goals of outstanding service and continual

improvements in efficiency. This remains vital

to our plans, underpinning our ability to invest

in capability that will, over time, expand our

presence in new adjacent markets. Colleagues

across the business are aligned to these

objectives and it is ultimately their outstanding

efforts that have shaped our success.

Our headline measures confirm the continuing

strength of our business model.

Adjusted operating profit of £39.1m is flat on

the previous 53-week year (FY2024: £39.1m)

from revenue of £1,064.0m that was down

3.6% (FY2024: £1,103.7m). Statutory Operating

Profit of £41.2m was up (FY2024: £40m). Free

Cash Flow, a signature quality of the business,

was £36.1m (FY2024: £7.3m) with year-on-

year improvement driven primarily by the

normalisation of the payment cycle (which had

been impacted by the additional week of trading

in FY2024) and £6.9m of one-off inflows in the

year (recovery from administrators and pension

surplus refund). The strength of our balance

sheet is reflected in the move to a position of

holding Bank Net Cash of £3.3m at year end

(FY2024 £11m bank net debt), a watershed in

our policy of prudent capital management.

Behind these headline results, newspapers

and magazines have followed the established

trend of price rises helping to mitigating the

impact of volume reductions. The structural

decline in printed media remains an ongoing

challenge, however, our exclusive distribution

contracts, together with the gradual nature of

sales reductions, allows us to carefully manage

efficiencies that offset the shortfall. This year,

our sales and profitability also benefited from

our proactive trading in collectable trading

cards.

Sales from the three growth verticals in adjacent

markets increased by 16% and we continue

to carry out extensive trials and to access final

mile capabilities. While all stakeholders would

no doubt have hoped for greater progress, we

remain determined not to make hasty decisions

that carry unnecessary risk. As such, we

have stayed true to our prudent approach to

investment and avoiding potential distraction,

while putting in place the systems and

infrastructure that will be necessary to scale up

operations in future.

Looking to the medium term, the successful

agreement of the last remaining of our major

publisher contracts ensures our core revenues

and operational territories are secured until at

least 2029. This provides a solid foundation

for us to maintain our profitability and cash

flow, while simultaneously leveraging our early

morning capability in those markets we have

identified as growth opportunities.

Chairman's Statement

A strong financial

performance, exceeding

market expectations

David Blackwood

Chairman

Results this year

have been driven

by the combination

of operational

excellence and strong

sales in the growing

collectables market.

Read more about our business model

on page 04

Smiths News plc Annual Report and Accounts 2025

The delivery of operational excellence is key

to both these goals, which is why, in FY2024,

we confirmed a three-year programme to

upgrade our technology and infrastructure.

The implementation of new Warehouse

Management and Transport Management

systems are well underway, projects that will

provide us with the real time information flows

that are key to a more dynamic capability.

Meanwhile, the redesign and refurbishment of

our head office will also facilitate more flexible

working, bringing together the essential support

teams in an agile and cooperative environment.

Our position of Net Cash, not only at financial

period end, but as a running inter-month

average, is in stark contrast to the burden of

debt the business previously carried. This is

a watershed achievement that has required

patience and understanding, particularly from

shareholders. But as a consequence, we can

be more than ever confident in allocating a

proportion of our Free Cash to fund future

growth, without compromise to maintaining

attractive dividends.

This year, the Board is recommending a final

dividend of 3.80p (FY2024: 3.40p) to be paid

in February 2026, bringing the total ordinary

dividend in the year to 5.55p (FY2024: 5.15p). In

recognition of the cash benefit of one-off inflows

in the year, the Board is also proposing payment

of a further special dividend of 3.0p to be paid

alongside the final dividend in February 2026.

I spoke earlier of our colleagues and the critical

difference they make. Once again, I would like

to pay tribute to their commitment to serving

our customers and supporting each other,

often working in testing environments. In over

five years of visiting our distribution centres

and offices I remain as impressed today, as I

was on my first encounter. There is no doubt

that Smiths News is a remarkable and unique

business and that its people are what make it

so special.

Before closing, I would like to thank my

colleagues on the Board and Executive

Leadership Team; their continued support and

challenge is a vital catalyst to our progress.

In January 2025, Denise Collis stepped down

after nine years’ tenure and we welcomed

Manju Malhotra who brings fresh perspective

and experience that will be vital as we look to

expand our horizons. I’d like also to welcome

Richard Clay who will shortly be joining us as

CFO, replacing Paul Baker who leaves after

making a valuable contribution to pursue new

opportunities in a different sector.

Finally, I am excited about the year ahead,

for I believe the business is better placed

than ever to make a step change in its future

prospects, while maintaining the strong base

performance that we have come to expect from

the news wholesaling business. I look forward to

reporting on that progress in due course.

David Blackwood

3 November 2025

Adjusted Operating Profit

£39.1m



Adjusted Profit after Tax

£27.0m



Statutory Profit after Tax

£28.3m



Adjusted Earnings per Share

11.1p



Free Cash Flow

£36.1m



Average Net Cash/(Debt)

£3.3m



Bank Net Cash/(Debt)

£3.3m



A solid foundation

for us to maintain

our profitability and

cash flow, while

simultaneously

leveraging our early

morning capability.

Throughout this year’s annual report, we rightly

acknowledge our people, emphasising that

performance excellence is as much about

culture and commitment as any process or

workflow. Our colleagues are deeply loyal to

the business; they understand that change is

necessary and want to actively participate in the

decisions that affect their future. It’s therefore no

surprise that the lessons we learn from testing

and trialling new initiatives are enhanced by

their input. Of course, we also need to embrace

expertise from outside; this is already reflected

in the make-up of the Executive Leadership

Team and we would expect a greater diversity of

skills experience to filter down the business as

we expand our reach into new markets.

Supporting this expansion, without undue risk

to the core business model, is perhaps our most

pertinent challenge, requiring us to balance

careful control with the freedom to explore

avenues of opportunity that may not come to

fruition. In this regard, the fiscal discipline we

have shown in recent years has transformed the

financial underpinnings of our business, and it

is this hard-won achievement that allows us to

follow the twin tracks of our strategy.

£39.1m

£27.0m

£24.7m

£28.3m

£25.5m

11.1p

10.3p

£36.1m

£7.3m

£3.3m

(£11.7m)

£3.3m

(£11.0m)

Strategic Report Governance Financial Statements

CEO report

Delivering strong results

today and ensuring we

are fit for the future

We have once again

exceeded market

expectations,

delivering solid

financial results that

are the hallmark of

our business model.

Jonathan Bunting

CEO

I’m delighted to once again be able

to begin this annual review on

the foundation of strong financial

results alongside making further

progress across our longer-term

ambitions.

Maintaining the progress we have made is

no small endeavour and I’m conscious that

every day our people work tirelessly to deliver

the quality service that is the bedrock of our

success. As a result, we have surpassed market

expectations for the year and strengthened

both the financial and commercial footings

of the business.

Our performance confirms not only that we

have maintained profitability, but also that

we have stayed true to the model of low

debt, attractive dividends and the pursuit of

growth opportunities that enhance rather than

distract us from our established operations.

Furthermore, in concluding the last of our major

publisher contracts we have effectively secured

our newspaper and magazine revenue streams

to the end of the decade. This is an enviable

position from which to focus on broadening our

market reach.

In my review last year, I spoke of the importance

of our refreshed vison and our ambition to

consolidate our position as a leading early

morning distributor and provider of supply

chain solutions.

I spoke too of our purpose and how making

a difference to customers today requires more

than arriving on time; we also must also provide

them with solutions that simplify their day-to-

day operations and allow them to focus on

what they do best.

All of these goals remain, and indeed we are

more than ever convinced that pursuing them

is the right direction for Smiths News. Which

is why, in FY2025, we took the decision to

prioritise investing in capability, ensuring we

are ready and able to meet the scale and scope

of our ambition. In doing so, we recognised the

preparation required could potentially slow our

immediate progress, but we also knew, that

it was necessary to give us the capacity for

longer-term success.

In summary, we have once again exceeded

market expectations, delivering pleasing

financial results that are the hallmark of our

business model. But we have also, without

compromise to that performance, thoroughly

stress tested our strategic growth targets,

and invested in systems, people and physical

infrastructure from which we expect to reap

benefits over the medium term.

This approach is what we mean by becoming

fit for the future and I am confident that it is the

right balance of ambition and prudence that

will ensure we continue to meet the needs

and expectations of all stakeholders.

Smiths News plc Annual Report and Accounts 2025

At the heart of our strategy is

a recognition that our future

business model will be founded on

a combination of high drop density,

and coincidence of delivery.

Technology is key to expanding

our expertise beyond newspapers

and magazines. We are already

the UK’s leading news wholesaler,

and indeed a world class player

in that space. But it’s fair to say

that, as a result, our systems and

process tend to be focused on

those specialisms. It’s vital that

we develop our capabilities and

systems to be more ‘product

agnostic’, with logistics planning

and customer service capability

to match our wheels on the road.

Headline projects include the

procurement of new Warehouse

Management system and Transport

Management system, with initial

implementation expected in

FY2026. We are also working

to enhance technology that will

support customer service and

assurance for our recycling offer.

The Operational Excellence

programme is a comprehensive

review of our logistics capabilities,

ranging from people to processes.

Its goal is to enable our operations

to be more agile and responsive,

making the complex simple for our

customers and suppliers. As with

our technology workstream, it’s

about acquiring expertise that can

be applied across all of our target

markets. It’s also about doing

this in a robust way that stands

the real-world tests of scale

and repetition.

Leading

technology

Operational

excellence

Customer

centricity

Workforce

management

‘Fit for the future’ workstreams

Logistics

planning

New Warehouse

Management

and Transport

Management

systems

Making

the complex

simple

Comprehensive

review of our

logistics capabilities

Real time

tracking

information

Expected

delivery

updates

Flex and forecast

our labour

requirements

Overarching

commitment

to people

In simple terms this means having as short a distance as possible between delivery points, and the

capacity to drop or collect as several products and parcels to the same location. This combination

reduces unproductive time, leverages marginal costs and builds margin.

The newspaper and magazine market already has many of these characteristics, giving us a strong

foundation to build from. In doing so, we are focusing on three growth opportunities: recycling and

waste, new complementary categories, and final mile deliveries.

Our ‘fit for the future’ programme seeks to prepare the business for expansion across these targeted

growth opportunities. It touches on all aspects of the business and has four distinct workstreams

that will enable us to deliver sustainable returns over time.

The Customer Centricity

programme dovetails with its

operational equivalent – indeed,

the two are best viewed as a

holistic approach to delivering

outstanding service. The emphasis

here is on enhancing the customer

experience, including, for example,

the provision of real-time tracking

information and expected delivery

updates.

Not to be confused with our

overarching commitment to people,

Workforce Management refers to

the planning and control of what

is one of our key variable costs.

As we increase our involvement in

markets such as contracted final

mile deliveries, it’s vital that we are

able to flex and forecast our labour

requirements to meet the peaks

and troughs of demand while

remaining consistently efficient

and competitive. This helps our

end customers too, ensuring they

receive the same high quality

service, regardless of factors

outside their control.

Strategic Report Governance Financial Statements

Delivering for all stakeholders

When measuring our performance, we consider

the needs of all our stakeholders, aiming to

deliver consistent and reliable financial results

without compromise to service excellence,

investment that supports future opportunity

and support for our people across the business.

In pursuit of these goals, the Board set targets

that ensure we focus on both our day-to-day

responsibilities and promises to customers

while also setting challenging goals for the

longer term.

Service excellence

Service standards are essential for both

daily and long-term success. They support

the critical requirements of our supplier

contracts and underpin our reputation as

industry leader. Strong service KPIs are also

essential to the control of costs by avoiding

unnecessary duplication.

Consistent results

From a financial perspective, we seek to

deliver consistent results that reflect our

business model relatively predictable markets.

Maintaining a strong balance sheet, we have

a stated capital allocation policy that provides

attractive returns to our shareholders while

simultaneously meeting the investment needs

of the business and our people.

Once again, we have delivered a strong

performance against our stated KPIs,

successfully balancing financial and non-

financial goals, and ensuring the business is

well positioned to maintain overall progress

Investment goals

With a strong profit to cash conversion, we

allocate spare funds across the needs of all

stakeholders. This includes capital expenditure

in the established wholesaling operations as

well as investment in targeted opportunities

across the three growth verticals that fit our

skills and capabilities. Our support for new

growth markets recognises that more diversified

revenue streams are key to strengthening our

business model for the future.

Supporting people

Our new Employee Value Proposition (EVP)

focuses on our making and keeping a clear

promise to all colleagues. As well as offering

fair rewards for all, we believe that fostering

their skills, experience and expertise, alongside

the attraction of new talent, is critical to

our long-term success. As such, we fund

comprehensive learning and development

opportunities that support colleagues

throughout their career journeys.

Service excellence

Motivated people

Safety in the workplace

Attractive returns

Strong balance sheet

Growing new revenues

Focused investment

Key

stakeholders

KPI

performance

outcomes

Customers

Suppliers

Colleagues

Shareholders

Financing partners

Our financial and

non-financial KPIs

are designed to unite

stakeholders, with

a range of measures

that balance a strong

performance today

with the needs of

long-term success.

Smiths News plc Annual Report and Accounts 2025

KPIs

Customer Pack Accuracy %

99.7%

Pack accuracy ensures customer supplies and

invoicing are aligned, minimising queries and

administrative corrections.

98.0%

99.7%

Target

FY2025

FY2024

FY2023

FY2022

FY2021

Required Delivery Time %

93.9%

Arrival at the scheduled time is a key service

measure for customers and publishers and

aligns to our contractual obligations.

90.0%

93.9%

92.4%

93.3%

92.4%

95.1%

Target

FY2025

FY2024

FY2023

FY2022

FY2021

Returns Collections %

97.0%

Daily returns collections ensure that sales data

(supplies minus returns) is processed within

tight time windows, supporting sales forecasting

and accurate invoicing.

98.0%

97.0%

96.3%

96.9%

97.3%

98.4%

Target

FY2025

FY2024

FY2023

FY2022

FY2021

N/A

0.31

0.38

0.33

0.25

0.32

Health and Safety

(Lost time incidents per 100k hours) No.

0.31

We measure ‘lost time incidents’ as the

most comprehensive and accurate capture

of reportable occurrences that impact our

operations. By measuring these as a percentage

of operating hours, we can benchmark to

other organisations and allow for growth or

contraction of our activities.

Returns Processing Accuracy %

100%

Unsold copies are credited to customers, so

accuracy is vital for credits and invoicing to both

retailers and publishers.

99.50%

100.00%

99.95%

99.50%

99.96%

99.90%

Health and Safety (RIDDORs) No.

We monitor RIDDORs to learn from every major

incident, ensuring we take action to reduce the

possibility of recurrence.

N/A

Target

FY2025

FY2024

FY2023

FY2022

FY2021

Key Performance Indicators

Our KPIs encompass the most critical measures

of the Company’s success and future prospects.

The financial KPIs reflect our stated goal

of maintaining strong underlying finances,

including a prudent approach to debt and

the payment of attractive dividends subject

to performance and in line with our capital

allocation policy.

Non-financial KPIs reflect the key performance

measures of our service to customers and

industry partners. In addition, we include

measures that give attention and visibility to

workplace safety, colleague engagement and

customer satisfaction.

An analysis of the Company’s financial and non-

financial performance, including discussion and

explanations of year-on-year movements, can

be found in the various sections of the Strategic

Report on pages 02 to 73.

Non-financial KPIs

Our focus on operational excellence is reflected

in the challenging targets we set for our most

critical non-financial metrics. It is therefore

pleasing to report a continued strong overall

performance, with the business exceeding or

achieving target against all but two metrics and

delivering year-on-year improvement in eight of

the nine measures. This progress is testament

to our industry expertise, commitment to service

and culture of continual improvement. While it

is also pleasing to record a further progress in

Health and Safety, we would caution that with

so few serious cases, small differences, and

even single incidents, could potentially result in

a large statistical swing (positive or negative) in

the future.

Target

FY2025

FY2024

FY2023

FY2022

FY2021

Health & Safety (Lost time incidents frequency rate, per 100,000 hours)

Target

FY2025

FY2024

FY2023

FY2022

FY2021

Strategic Report Governance Financial Statements

Financial KPIsNon-financial KPIs

Colleague Engagement

(Net promoter score)*

64%

The engagement of colleagues underpins

performance at every level of the business.

We survey colleagues regularly and consider

their feedback carefully; colleagues also play

an active role in implementing change and

driving new initiatives that enhance their

contribution to our success.

62%

64%

62%

7.1

7.0

Target

FY2025

FY2024

FY2023

FY2022

FY2021

Colleague Engagement

(Net promotor score) *

Customer Satisfaction

(Net promoter score)

Surveying a statistically representative selection

of 300 customers every month, we track our

service performance across a range of factors

to ensure quality, accuracy and timeliness of

deliveries. The net promoter score is an annual

average of the overall headline indicator.

28.1

Target

FY2025

FY2024

FY2023

FY2022

FY2021

Customer satisfaction

(Net promotor score)

Total Statutory Revenue

£1,064.0m

Statutory revenue measures the extent to

which core sales and other revenues are within

our planning assumptions and longer-term

strategic forecasts.

£1,064.0m

£1,103.7m

£1,091.9m

£1,089.3m

£1,109.6m

FY2025

FY2024

FY2023

FY2022

FY2021

FY2025

FY2024

FY2023

FY2022

FY2021

Statutory Profit after Tax

£28.3m

Statutory profit after tax measures the absolute

profitability of continuing operations after

any disposals.

£28.3m

£25.5m

£25.1m

£23.4m

£26.3m

FY2025

FY2024

FY2023

FY2022

FY2021

Free Cash Flow

£36.1m

Free cash flow measures the cash available

to the business, which can be used for

investments, dividends and the reduction

of debt.

£36.1m

£7.3m

£21.8m

£48.2m

£24.0m

FY2025

FY2024

FY2023

FY2022

FY2021

[X%]

+2%

N/A

Smiths News plc Annual Report and Accounts 2025

KPIs continued

Adjusted Operating Profit

£39.1m

Adjusted operating profit is defined as operating

profit from continuing operations, excluding

the impact of adjusting items (defined above).

This is the headline measure of the Company’s

performance and is the key management

incentive metric.

£39.1m

£38.8m

£38.1m

£39.6m

FY2025

FY2024

FY2023

FY2022

FY2021

Adjusted Profit after Tax

£27.0m

Adjusted profit after tax measures the

profitability of the Company, excluding

significant and non-recurring one-off costs,

including those not related to the Company’s

ordinary activities.

£27.0m

£24.7m

£25.6m

£25.7m

£26.3m

FY2025

FY2024

FY2023

FY2022

FY2021

Statutory Earnings per Share

11.7p

Statutory Earnings per share measures the

profit per share of the Company and is used by

investors when comparing performance to other

similar businesses.

11.7p

10.6p

9.8p

10.8p

FY2025

FY2024

FY2023

FY2022

FY2021

Average Bank Net Cash/(Debt)

£3.3m

Average Bank Net Cash/(Debt) impacts the

level of interest we pay and is the measure

which most accurately reflects the ongoing

borrowing of the Company as it removes the

potentially misrepresentative influence of period

end variations caused by publisher and retailer

payment schedules.

£3.3m

(£11.7m)

(£25.0m)

(£49.9m)

(£82.6m)

FY2025

FY2024

FY2023

FY2022

FY2021

Adjusted Earnings per Share

11.1p

Adjusted earnings per share measures the profit

per share of the Company, excluding the same

adjusted items as in Adjusted Profit Before Tax.

11.1p

10.3p

10.8p

FY2025

FY2024

FY2023

FY2022

FY2021

Bank Net Cash/(Debt)

£3.3m

Bank Net Cash/(Debt) impacts the level of

interest we pay and is a covenant measure

of our financing agreements.

£3.3m

(£11.0m)

(£4.2m)

(£14.2m)

(£53.2m)

FY2025

FY2024

FY2023

FY2022

FY2021

Dividend per Share

8.55p

Dividend per share measures the profit per

share of the Company and is used by investors

when comparing performance to other similar

businesses. The total dividend per share for

the years FY2025 and FY2024 include both

the ordinary dividends for the respective years,

and additional special dividends of 3.0 pence

per share in FY2025 and 2.0 pence per share

in FY2024.

8.55p

7.15p

4.15p

1.5p

FY2025

FY2024

FY2023

FY2022

FY2021

Profit from the three growth verticals

£1.4m

In recognition of the need to diversify and

explore new revenue opportunities within our

core markets and other adjacent categories,

this financial KPI was introduced from FY2024

to represent the profit generated from growth

and diversified activities. This measure has

also been introduced within our in-flight LTIP

awards, further details of which can be found

in the Directors’ Remuneration Report on

page 106.

£1.4m

£2.0m

£0.7m

N/A

FY2025

FY2024

FY2023

FY2022

FY2021

The performance to our financial KPIs

is reviewed in greater detail in the

Financial Review on page 61

Strategic Report Governance Financial Statements

1919

Operations

Delivering

excellence

Delighting customers

is what we set out to

do every day – and

to sustain that goal,

we must continually

improve, learning

from our successes as

well as our mistakes.

In that sense,

progress is as much

about culture as it is

about process and

technology. Indeed,

the elements work

hand in hand to

meet the standards

our customers expect

today as well as

ensuring we are fit for

the future.

Lucy Robertson

Head of Operations

More than early mornings.

At Smiths News we not only specialise in

early morning delivery, we aim to do so while

meeting the highest standards of accuracy,

on-time delivery and supporting information

flows. The continual pursuit of this premium

offer is what we mean by delivering excellence,

and we are applying its principles not only to

our established markets but to all our targeted

growth opportunities.

Delivering Excellence is therefore a holistic

approach to delivering unmatched value for

our customers, while simultaneously seeking

improvements in quality and efficiency. At its

heart is the recognition that there is no silver

bullet to sustainable progress. Rather, we

must seek to find improvements (be they

material change or marginal gain) at every

stage of the process and from the perspectives

of all stakeholders.

While the requirements of newspapers and

magazines continue to underpin our distribution

network, the principles of Delivering Excellence

can be applied more broadly. In practice, as

we expand the scope of our operations, we

are learning what aspects of our current offer

already fits, what could be improved and what

needs to change or is missing.

In summary, Delivering Excellence demands

that we push the boundaries of the status quo

so that we serve our customers better today and

in the future.

A culture of excellence

Meeting the future needs of our customers

requires continual improvement that’s founded

on transparency, trust and fresh thinking.

The Operational Excellence programme

pursues these goals through the application of

five management principles. These are now the

foundation of our approach to delivering for our

customers every day.

Leadership Commitment

We set clear goals and expectations, provide

support to achieve them, and lead by example

in the drive for ever-improving standards.

Right First Time

We aim to get it right first time, building quality

assurance into our process flows to avoid

creating or passing on poor standards. We take

a ‘no blame’ approach to solving service issues

that encourages transparency and celebrates

problem solving rather than focusing on failure.

Standardised Processes

We standardise our operations wherever

possible, helping us to reduce variation,

improve consistency and promote efficiency

for all stakeholders.

Visual Management

We seek to reveal problems at source, inspiring

improvement, enabling change and delivering

solutions that are founded on real-world

experience.

Go-See-Do

We are deeply curious about our performance,

understanding what works well and how

it might be improved. Turning observation

into action, we work to find practical and

sustainable solutions.

Smiths News plc Annual Report and Accounts 2025

Embracing Change

Embracing change and evolving our business is

fundamental to Smiths News’ operational progress.

In particular, the pursuit of new customers, new

products and new markets, will require us to be more

agile and enterprising, not just experts at what we

already do well.

That’s why our ‘fit for the future’ programme, while underpinned by

a commitment to the necessary investment, also recognises that the

journey to serving a broader customer base requires more than financial

backing.

We are committed to transforming our business to meet these needs,

acquiring the additional expertise we need and working to a culture that

embraces change and rewards those who work to our vision and values.

Investment

We are committed to investing for the future, ensuring we support our people,

having leading systems and the appropriate infrastructure to achieve our goals.

People

Attracting talent and

acquiring new skills

Network

Consistent quality

and capability

Technology

Customer-focused systems

that deliver competitive edge

Shaping our Future

Moving away from product

specific processes to

more generic ones that

can be applied in new

complementary markets

Making the complex simple

Transferring

our expertise

Delivering unmatched

quality and efficiency

A transparent and

supportive culture, that

celebrates success

and seeks continual

improvement

Doing better every day

Constructive questioning

and challenge

No blame problem

solving

Structuring our teams and

our network to deliver a

consistent service wherever

we operate and to whoever

we supply

A single national network

Final Mile flexibility

in all locations

Product agnostic service

standards

Process Culture Structure

Strategic Report Governance Financial Statements

Operations continued

Investment in capability

As the market leader in newspaper and

magazine distribution, it’s no surprise that

we have integrated technology across our

processes and systems. But as we move

into new markets, the highly-specialised

nature of those systems can sometimes limit

our capability to diversify. That’s why we’re

supplementing our current infrastructure,

with new Warehouse Management (WMS)

and Transport Management (TMS) systems.

This investment represents a significant shift

from a category-centric approach, to a more

‘product agnostic’ framework. These new

systems will provide an integrated technology

framework from which to support our

growth ambitions.

Importantly, these systems are highly scalable

and can be configured to meet our variable

needs and growing demand. When fully

deployed, they will provide us with the materially

improved visibility and control of resources

that’s key to our long-term goals.

Here we explain a little about each system, and

how each will enhance our capability to deliver

for customers.

Warehouse Management System

The installation of WMS provides a robust

solution to the management of inventory and

marries this to the efficient preparation of

customer orders. Its overarching purpose is

to calculate the most accurate, efficient and

speedy way to prepare orders for despatch. The

system will operate in the real world, using the

resources we have to hand rather than theoretic

configurations and algorithms.

In practice, WMS will allow us to better manage

new categories, many of which have different

challenges to the acknowledged complexities

of magazines. Examples include, confectionery,

drinks, books and DVDs, cards and toys…

a whole spectrum of products that we can

service in terms of physical distribution, but

which require the systems to ensure we do

so at a consistently high standard throughout

the network.

WMS will also promote efficiency by removing

the need for time consuming manual processes.

Already, our trials are showing cost reductions

driven by improvements in accuracy and the

reduction of the need for expensive corrections.

Transport Management

TMS is primarily concerned with what happens

after deliveries leave our depots – its focus is

on the quality and efficiency of the product

journey between despatch and receipt by

the customer. As such, TMS brings together

route planning, scanning and tracking, and the

provision of real-time information for all involved

in the supply chain. Its deployment will provide

greater flexibility, improve customer experience

and reduce dependency on systems that were

primarily designed for the unique needs

of magazines.

As with WMS, when TMS is fully deployed

(with initial implementation expected in Spring

2026), it will give us the capability to scale up

new products and services using standardised

processes. And because its information will

flow through the supply chain, customers will

be able to track deliveries in real time, request

collections and be assured of any changes to

scheduled arrivals. This is particularly important

for contracted final mile deliveries but is equally

applicable to recycling and indeed any time

sensitive services.

On track and on budget

The investment in WMS and TMS is a key

enabler in our growth ambitions, so it’s pleasing

to be able to report that both programmes are

running on time and on budget. WMS is now

active in our Hemel Hempstead distribution

centre and initial implementation of TMS

is expected in Spring 2026. Meanwhile,

our colleagues are testing the systems and

providing vital feedback on how configuration

might be improved and their implementation

made as simple as possible.

We’ve been using

the new WMS for

four months now.

It’s transformed how

we work and made

life so much easier –

there’s been a lot to

take on board, but I’d

not want to go back!

Trial location supervisor

Smiths News plc Annual Report and Accounts 2025

Safety Always –

Highlights FY2025

24%

Reduction in accidents



23%

Reduction in lost time injuries



40%

Reduction in RIDDOR



40%

Reduction in forklift incidents



52%

Reduction in in motor vehicle incidents



Our people are the

eyes and ears of safety

on the ground. That’s

why we encourage

and even celebrate an

environment where

colleagues work as a

team, looking out for

each other, and drawing

on their real world

experience to highlight

new or previously

unforeseen risks.

Safety Always – maintaining

a culture of excellence

A commitment to safety goes hand-

in-hand with delivering excellence.

And Smiths News has a strong

record of performance, with levels

of accidents below industry norms

and FY2025 showing further year-

on-year reductions in key metrics.

The business is accredited by the British

Standards Institution to ISO 45001, and

more generally, we promote a culture of

Safety Always, providing our people with the

tools and techniques to identify and address

the root causes of potential accidents.

In maintaining excellence from a safety

perspective, we take much the same approach

as we do in driving operational delivery. Chris

Wright, Head of Safety and Risk at Smiths

News, explains, “Leading performance is as

much about culture as it is processes – indeed

both are vital, for they cannot function properly

without each other.” As such, we underpin our

reporting systems with a blame-free culture in

which colleagues feel able to make constructive

suggestions and in-the-moment observations.

Chris adds, “Our people are the eyes and

ears of safety on the ground. That’s why we

encourage and even celebrate an environment

where colleagues work as a team, looking out

for each other, and drawing on their real-world

experience to highlight new or previously

unforeseen risks.” This approach also explains

why safety is integral in our Operational

Excellence programme, running like a spine

through all the workstreams, rather than being

a standalone consideration.

Looking ahead, we recognise that our plans

for growth and increased market reach will

potentially carry new risks, and we are therefore

taking appropriate pre-emptory action. The

growth of Recycling and Waste is a tangible

example of new operations that we are actively

reviewing in tandem with our expansion

ambitions. This year we have introduced new

paperless systems that improve the speed

and scope of recording of incidents, and we

have backed these with refreshed procedure-

driven rules. More broadly, using a four Cs

approach (Concern, Cause, Containment,

Counter-measure) we are continually reviewing

processes as new activities are taken on board.

Safety Always means that maintaining

excellence is never a fixed destination. As we

grow and diversify our operations our approach

is unambiguous – we will work tirelessly

to maintain the high standards that have

characterised our news wholesaling operations

for many years. It’s a constant learning journey,

but one that our people are proud to embrace

and lead the way.

Strategic Report Governance Financial Statements

Creating an agile office environment

The refurbishment of our head office in

Swindon provided an opportunity to rethink

the way we work together, creating an office

environment that reflects the agile and

cooperative culture we strive for. Critical to

supporting the whole business, our Swindon

office is ‘home’ to several central teams that

include Information Technology, Human

Resources, Finance, Site Services, New

Business, and more.

Simon Meyer, Services Director, explained

the thinking behind the redesign. “Swindon

is the strategic heart of the business, so we

wanted an environment that encourages

agile and cross-functional working. We also

needed to reflect the changes in working

patterns over recent years, with meeting

spaces and technology to support a more

flexible approach to office use.”

Using design specialists, we now

have a modern and flexible space that

encourages colleagues to work together

and share expertise. As well as workstations

and meeting spaces with leading

communications and AV technology, the

office has several training and meeting

rooms for more formal gatherings.

Feedback from colleagues has been

overwhelmingly positive, with an impact

too on social interaction and pride in the

workplace. Simon adds, ‘In the aftermath

of the Covid-19 pandemic, we perhaps lost

some of the less tangible benefits of our

offices – it’s great to see that back with

colleagues working and socialising together

in a creative and aspirational environment’.

Case Study

Hemel Hempstead

Trialling at our Hemel

Hempstead distribution hub,

this year we installed the latest

Personal Proximity Sensor

Systems to our Forklift Truck

operations.

The installation was backed with specific

training and awareness activity for

drivers and colleagues. Hemel, as one

of our largest physical locations, with

a growing recycling operation, was the

ideal site to test suitability. Applying the

lessons learned we are in the process

of rolling out the improvements to other

appropriate locations in FY2026.

Smiths News plc Annual Report and Accounts 2025

Operations continued

In addition to daily deliveries,

our adjacent businesses provide

specialist support for retailers,

publishers and other suppliers,

adding value to our wholesale

offer by tapping into our category

expertise and access to key markets.

A long-established part of our overall service,

our adjacent businesses are highly regarded

by their customers with a reputation for

client-focused delivery. Furthermore, they

are firmly attached to our vision and purpose

in making customers’ lives easier, helping to

increase their profitability and supporting

end-to-end supply chain solutions.

Adjacent businesses

Adding value through

specialist support

Instore

Instore works with retailers, suppliers and

publishers, providing field-based merchandising

and instore marketing and compliance solutions.

A specialist in the newspaper and magazine

category, Instore also has growing expertise

in supporting a broader range of categories,

including greetings cards, confectionery, books,

DVDs, collectables and other express products.

In addition to traditional field marketing, Instore

provides a promotional compliance and sales

reporting service, backed by a speedy access

to results and information. Working closely

with our wholesale colleagues, Instore also

has a strong reputation for driving sales of

the growing collectables market that includes

stickers and trading cards.

Operating across the UK, key customers

include, TG Jones, Sainsbury’s, Tesco, Lidl,

Morrisons, B&M and Home Bargains. Supplier

clients include leading national publishers,

confectionery brands, stationery, greeting cards

and health and beauty suppliers.

DMD

DMD specialises in the supply and placement

of newspapers, magazines and digital

media to travel hubs and airlines in the UK

and worldwide. These include international

airports and rail terminals, airside lounges,

and the supply of on-board copies for sale or

complimentary distribution.

Drawing on over 35 years’ experience, DMD

offers a comprehensive supply chain solution,

ensuring access to these high value locations

and target audiences. Making life easy for

customers our teams manage the entire

process, from content sourcing and delivery to

central invoicing across territories and media

formats in one seamless service

With operations in 20 countries (either supply

direct or using carefully chosen local partners),

our clients include a wide range of international

publishers as well as leading airlines and travel

operators, including Emirates and Thai Airways,

Eurostar, and major UK airports such as

Heathrow and Gatwick.

A long-established part

of our overall service

our adjacent businesses

are highly regarded by

their customers with

a reputation for client

focused delivery.

Strategic Report Governance Financial Statements

Collectables

delivering growth

and value

Collectables are a growing

and valuable category

that aligns ideally to the

distribution and customer

profile of Smiths News.

Comprising trading cards, stickers

and collectable figurines, demand

is typically driven by the English

Premier League and UEFA

Champions League as well as

franchised collections such as

Pokémon and major sporting

events including major football

championships. Collectable

figurines are a growing sector with

brands such as Superthings and

Piratix gaining momentum.

With strong selling prices, low

delivery weight and near-perfect

overlap with our existing customer

base, collectables are a margin

accretive category and a great

example of how we can expand our

product range with products that

are complementary to newspapers

and magazines.

Serving the collectables market

efficiently, requires the ability

to forecast effectively, ensuring

maximum availability at peak

periods. Using a combination of

historic and real time sales data,

Smiths News is well placed to

manage these complex sales

patterns giving us a competitive

edge in serving this market. Sales

trends can fluctuate significantly

by area, season and collection,

so being agile and able to swiftly

replenish or resell unsold stock at

outlets where demand is highest,

ensures optimum returns.

Simple

Collectables key product lines

Major

football

tournaments

Pokémon

Premier

League

The FIFA World Cup and

European Championships

are mainstays of the

collectables market.

With high profile publicity

and widespread public

interest, demand is

intense at peak periods

and even more so if UK

teams progress well in

the competitions. The

Euros and World Cups

tournaments are staggered

to take place every two

years, and such is their

impact that total collectable

sales typically have a

biannual peak.

Starting almost thirty

years ago, Pokémon has

become a worldwide

cultural phenomenon that

extends to movies, games,

merchandise and more.

Trading cards remain a

foundational element of

Pokémon merchandise,

with new collections being

introduced on a regular

basis. Appealing not only

to youngsters but also

to adult collectors the

Pokémon franchise has

become a leading player

in the collectables market.

Pokémon celebrates

its 30th anniversary in

February 2026.

The English Premier

League is among the most

successful football league

franchises in the world.

Every year, as the new

season approaches,

demand for this year’s

collections is extremely

high. Appealing particularly

to children, trading and

swapping has become part

of schoolyard culture, while

older enthusiasts also seek

to complete and retain full

collections year after year.

Smiths News has been

selling football collections

for decades, with a deep

knowledge of demand

patterns at across our

independent customers and

major multiple retailers.

Smiths News plc Annual Report and Accounts 2025

Collectables in

numbers

Total revenue FY2025

£41.8m

Revenue growth

17.0%

1 year

56%

3 years

Number of major collections

FY2025

182

product lines

Average selling Price

£2.45

Best sellers FY2025

Pokémon

Premier League

UEFA Champions

League

UEFA Women’s Euro 25

Piratix Shark figurines

I Love series of figurines

With strong selling

prices, low delivery

weight and near-

perfect overlap with

our existing customer

base, collectables are

a margin accretive

category and a great

example of how

we can expand our

product range.

Strategic Report Governance Financial Statements

People

Our People – making

a difference every day

At Smiths News we know that our

people are what make the difference

ever y day.

From frontline delivery to back office functions

our teams work to deliver the exceptional

service our customers expect. And without

doubt, it’s the collective depth and diversity of

their experience that give us our competitive

edge. Which is why we are determined to

ensure that everyone feels supported and can

be at their best in the workplace.

With just under 1,400 colleagues across

the country we manage a wide range of

circumstances, needs, and aspirations. In doing

so, we make clear promises that are founded on

listening to our colleagues and understanding

what they want from the business. These

assurances apply at all levels and locations,

meaning we treat everyone fairly and that

information and opportunity are available to all.

Collectively, the commitments are what’s known

as our Employee Value Proposition (EVP), but

less formally, we simply call it, being ‘as good as

our word’.

As Good as

our Word

Trust

Mutual support is vital our

workplace culture and the

delivery of objectives.

Involvement

Our people want to be

involved in the decisions

that affect them and the

future of the business they

care deeply about.

Pride

Our people are proud

of the difference they make

and are loyal to

the business and

each other.

Opportunity

Colleagues know that change

brings challenges, but they

also see opportunity for

career development and

personal growth.

As Good as our Word

Our ‘as good as our word’ EVP was developed

from research with colleagues and ongoing

feedback that ensures we adapt to their

aspirations in parallel with the commercial

needs of the business. With a heritage that’s

built of decades of industry leadership, its

perhaps no surprise that we consistently

hear the same theme across our locations:

Pride – our people are proud of the difference

they make and are loyal to the business and

each other.

Trust – mutual support is vital to our workplace

culture and the delivery of objectives.

Opportunity – colleagues know that change

brings challenges, but they also see opportunity

for career development and personal growth.

Involvement – our people want to be involved in

the decisions that affect them and the future of

the business they care deeply about.

From these themes we have developed four

pillars that define our approach to people in

the workplace. Together with our values, they

shape the way we work and provide a clear

framework for job satisfaction, fair reward

and career progression.

Smiths News plc Annual Report and Accounts 2025

Inclusive learning is key to our commitment.

We make sure every colleague has access to

an experience that is respectful, inclusive and

free of barriers – anticipating diverse needs and

preferences. Our online MyLearning platform

helps ensure that opportunities are available to

all, with a range of courses and modules that

can fit in with busy lifestyles and workplace

pressures. Colleagues can choose from face-to-

face workshops, e-learning courses and toolkits

to help improve performance and prepare them

for the next step on their career ladder.

Colleague involvement

We are committed to involving and listening

to colleagues, giving them a voice in how

the business is run today and our plans for

the future.

To do this, we first provide colleagues with

information on company performance and

hold regular town hall all-colleague meetings

to explain and discuss developments. Our

intranet is a vibrant and up to date source of

news and information and we supplement this

with an electronic newsletter that is also printed

newsletter, for those who have limited access

to online facilities.

Giving colleagues an active voice, we then

facilitate a series of networking groups that

are representative of our workforce and reflect

their issues and concerns as well as the needs

of the business. The forum representatives

are encouraged to give open and constructive

feedback so that we learn from their day-to-day

experience of working at Smiths News.

The network group discussions are reported to

the Executive Leadership Team, Sustainability

Steering Group and ultimately the Company’s

Board of Directors (see page 40 for a Q & A

with Michael Holt, Non-Executive Director with

responsibility for employee engagement). These

are supplemented by our regular ‘What Matters’

colleague survey that covers a comprehensive

range of best practice engagement indicators.

It's all part of a culture that recognises the

embedded expertise of our people is our most

valuable asset. Their insights help us make

meaningful, positive changes to the workplace

in a way that delivers sustainable results for all

our stakeholders.

Supportive workplace

We are committed to ensuring a friendly

and supportive workplace that recognises

effort, shares success and gives everyone the

opportunity to be the best they can be. From

warehouse to head office, we want every role to

be as good as we say it is, with clear objectives,

regular reviews and the opportunity to have

your say on potential improvements.

This commitment extends to the culture and

friendships that are formed at work. It’s why

we encourage colleagues to be involved in

their communities through fundraising or

volunteering. We aim to support personal needs

with flexible working whenever we can, and

have policies to support life events such as

maternity, paternity, neonatal care, adoption

and shared parental leave.

Our teams are characterised by pride, passion,

loyalty and care. Regular engagement surveys

help us to tap into this rich resource, surfacing

any emerging issues and concerns, as well as

highlighting opportunities and successes to

share with others.

Fair reward and Freedom of

Association

We aim to provide a competitive reward

package at all levels. Alongside a fair salary,

we provide a pension scheme and access to a

range of benefits that add value and support

colleagues in times of need. These include the

popular share save scheme, company-funded

health cash plan, cycle to work and attractive

car salary exchange. Colleagues have the right

to join a union.

We also recognise that there are times when

colleagues may need extra support. In addition

to flexible working we offer advice on financial

wellbeing and over the past five years have

provided a confidential financial fund for the

most difficult of times. This fund is now closed

to future application, but colleagues have

access to support through our relationship

with industry charity NewstrAID.

Career development

We actively invest in career development,

ensuring every colleague has access to

opportunities to grow and progress. And we

recognise that not only do people learn in

different ways, but that pace and circumstances

can be important too.

Our role-based training is designed so that

colleagues feel confident and capable in their

fulfilling responsibilities. This is then enhanced

with additional development opportunities for

those who want to take their careers further.

We offer a full range of apprenticeships

and have wide selection of development

programmes that include Trusted Leadership,

Operational Excellence and Change

Management, to name but a few.

Engagement

At Smiths News we work as team to

deliver for all stakeholders. That’s why

we conduct regular engagement surveys

and act on the feedback we receive.

We also go to considerable lengths to

communicate strategy and performance,

with all-colleague town hall-style

meetings, video recordings, a vibrant

intranet and regular Q&A sessions.

Importantly, we encourage colleagues to

participate in our channels and network

groups, so that the communication is

a two-way conversation rather than

merely top-down messaging. It’s all part

of tapping into the collective experience

and expertise that makes Smiths News a

special place to work.

In FY2025, our engagement surveys

had a participation rate of 85%, with a

score of 64% and over 2,000 comments

received. This is an encouraging

result with increases in the number

of colleagues who would recommend

Smiths News as a great place to work

and colleagues agreeing they have

the training and development they

need to do their job well. We’ve also

received strong positive feedback on the

refurbishments of distribution locations

and our head office.

Strategic Report Governance Financial Statements

People continued

Talent and Development

With around c.1,400 colleagues we have a

vast pool of talent to draw on – and to take

further. From the warehouse floor to strategic

management, we set out to support learning

and development with tailored programmes

and professional qualifications. For example,

our trusted leadership programme helps

ensure a consistent culture of appropriate

leadership and people skills throughout the

business. In FY2025, 26 colleagues completed

the programme, with a further ten still working

through its modules.

Other development activity incudes workshops,

expert sessions, coaching, mental health

training, discovery workshops, and more. And

for those starting out on a committed career

pathway, our apprenticeship programme

provides wide range of experience and

development opportunities – 17 colleagues

participated in FY2025.

Supplementing face-to-face training, our

online learning portal provides a range of

self-directed courses and development

opportunities in FY2025, 587 modules

were completed by colleagues.

Talent reviews are an equally vital part of our

learning and development culture. At all levels

and locations, we set out to identify and support

those with the ability and ambition to go further.

This ensures we not only have a pipeline of

appropriate skills and capabilities, but also that

we identify future needs driven by changes in

the business environment, technology and new

growth opportunities.

Everyone In

This is our flagship forum that connects

the supporting network group leaders

with colleagues from a variety of

representative locations and shift

patterns. It’s an open and supportive

forum where we share plans for the

future, discuss insights and constructively

collaborate to improve our workplace and

its practices.

Minds Matter

This forum is focused on raising

awareness and changing negative

perceptions of mental wellbeing

– creating an environment where

colleagues can feel secure in reaching

out for support. The forum works to

improve knowledge of mental health

issues, including how to support yourself

and others in the workplace and beyond.

Women In News

This forum was established by colleagues

for colleagues. It holds monthly meetings

that help inform and consult on relevant

Company policies and guidelines. The

leading forum members also mentor and

coach women looking to advance their

careers. We are proud of the progress we

have made and committed to supporting

full and fair access to opportunities for

women in our business and the wider

logistics industry.

RISE

Launching in October 2025, RISE is a

new network group focusing on Race,

Identity, Support and Empowerment

that promotes equal opportunities and

representation for people of colour at

Smiths News. The RISE network aims

to empower and support colleagues

through conversations around race,

identity and wellbeing.

Beyond Barriers

This forum champions accessibility

and understanding of colleagues

with particular challenges, enabling

every colleague to fulfil their potential.

They come together as a supportive

community, to raise awareness and to

be a catalyst for positive change, helping

Smiths News become a Disability and

Carer confident employer.

Pride News Network

Our Pride forum members celebrate

and nurture our LGBTQ+ community,

fostering a safe, friendly and inclusive

workplace for all. They aim to provide

education, enhance representation,

and be a voice for diversity and

cultural change.

We Care

Launched in September 2024 We Care

is our charity and community forum.

It works to ensure Smiths News has

a positive impact on its local communities

by supporting charities and community

groups. The forum also manages all

charitable requests, including colleague

matched-funding and volunteering

requests.

Our colleague network groups

SmithsZone

SmithsZone is our in-house intranet.

Accessible to all colleagues it provides

a comprehensive range of information,

including company news, performance

updates, colleague activities and

colleague network group progress.

There’s also information and easy-to-use

links to workplace benefits, training and

development and career opportunities.

More than the sum of its parts,

SmithsZone is an active and vibrant

hub that keeps everyone up to date,

connecting all colleagues to the network

of opportunities that is Smiths News.

Smiths News plc Annual Report and Accounts 2025

Having started as an in-house

initiative, Smiths News is proud to

be the primary sponsor of Pass It

On, and pleased that the charity

continues to grow by making a

difference to people in need.

Pass It On focuses on immediate and tangible

support to those struggling across our towns

and cities at a time when rough sleeping has

been on the rise throughout the UK. Over the

last year we’ve seen greater outreach than

ever before, with the charity’s largest seasonal

campaigns each providing hundreds of care

packages to those living on our streets. These

packages typically vary from warm dry thermals

in winter, to sunscreen and sanitary products

in summer.

A particular success from this year was

partnering with charities, ShowerBox and

Let's Feed Brum in an initiative known as

‘Birmingham Activation’. Working together,

we created a street event that offered rough

sleepers the opportunity to have a warm

shower, a package of essential toiletries and a

free nutritious breakfast. Initiatives like these

provide vital support to homeless people,

for whom access to clean and safe washing

facilities with appropriate toiletries can be

extremely difficult. Our summer campaign in

Birmingham also included a free-to-access

hairdressing day that was well attended and

points the way to future opportunities and new

ways of providing tangible support.

Looking ahead, Smiths News will be working

with Pass It On to expand its partnerships,

helping create more outreach programmes

along the lines of the Birmingham Activation.

We expect this winter’s campaign to be the

largest ever.

Smiths News and Pass It On would like to thank

all the fantastic volunteers who have dedicated

their time to making a difference. Their efforts

reflect the care and empathy that’s fundamental

to our values, both as individuals and as

a business.

Pass it on

Helping rough sleepers

in all seasons

Did you know?

According to official

statistics, homelessness

is up 20% compared to

as recently as 2024, with

approximately 1,500

individuals dying on the

streets each year.

Strategic Report Governance Financial Statements

This section of the Strategic Report,

and the pages to which it refers,

comprise the Company’s section

172(1) statement and explain how

the Directors have engaged with

our stakeholders during the

year and how the Board has had

regard to the outcomes of these

engagements when making

significant decisions as well as

developing future strategies,

policies and performance measures.

When making decisions for the Company the

Directors understand the need to consider

the views of relevant and impacted parties,

and that it may be necessary to take account

of differing views and balance these across

any competing interests. The Board strives

to balance competing interests in a fair and

transparent manner in the best interests of

the Company as a whole, having regard for

the realisation that conflicting positions may

exist between the long-term and short-term

interests of the Company, between groups of

shareholders with different investment criteria

and agendas, between colleagues, or even

between any of the foregoing and the wider

commercial, environmental, societal or local

community standpoints. This requires the Board

to balance any competing interests and to take

account of the various views or positions when

making decisions, while remaining mindful

of the need, at all times, to ensure the long-

term sustainable success of the Company

and to generate value for shareholders, while

contributing to wider society. The Board

considers both existing and emerging risks

associated with each stakeholder group as

part of the risk management process (see the

Risk Management Report on page 67). The

engagement with stakeholders, including the

methods used, decisions taken, impact on

our business as well as how the Board has

exercised its oversight are summarised in

this report.

Communities and regulators

We provide availability of newspapers

and magazines to thousands of local

communities across the UK, representing

a 55% market share.

We support the print sector through its

NewstrAID charity. Smiths News also remains

the anchor sponsor of ‘Pass It On’, the

registered charity first started by the Company

in 2017 which helps to address the issues and

challenges of homelessness within the UK.

We engage with various regulatory bodies

across the supply chain to ensure we comply

with our regulatory and legislative obligations.

Colleagues

We have just under 1,400 colleagues operating

from sites in England and Wales. In addition,

we have c.150 outsourced colleagues based at

two sites in Noida and Pune (India) providing

staffing at the Shared Service Centre (SSC).

Who are our stakeholders?

Shareholders and lenders

As at the end of the financial year, just over

65% of our issued shares are held by ten

shareholders.

Our primary banking agreements are held with

a syndicate of two lenders, who have each

been lenders to the Company for more than

eight years.

Customers and suppliers

Our suppliers are made up of the national

publishers/distributors in the United Kingdom

as well as a significant proportion of regional

publishers across our territories through long-

term contracts.

Customers include approximately 21,800 news

outlets, ranging from large supermarkets to

high street retailers and independent stores.

Our business model incorporates c.640

self-employed distribution subcontractors who

are engaged to provide services to support our

operations and deliver daily to our customers.

In addition to our newspaper and magazine

publisher suppliers, we have a further network

of suppliers who provide assorted goods and

services to the Company.

Stakeholder engagement and S172 Statement

Delivering for all

our stakeholders

Smiths News plc Annual Report and Accounts 2025

Section 172 Duties of the Board

Various means of engagement are conducted

with stakeholders by both the Board and the

Executive Leadership Team, with the outcomes

discussed together, ensuring a common

understanding of the feedback received and the

position of all stakeholders. The focus of these

engagements is directed to those stakeholders

potentially impacted by impending decisions

of the Board, with all Directors displaying an

unwavering commitment to their primary duty

to act in good faith and in a way which is likely

to promote the success of the Company and

is to the benefit of shareholders as a whole.

The Board takes responsibility for the long-term

success of the Company which includes

determining, promoting and monitoring the

Company’s culture, values and strategy, as well

as seeking to ensure that by discharging this

responsibility all stakeholders are impacted

positively. The Board has determined as

significant those issues relating to strategy,

transformation, diversification, corporate

development and capital allocation, each of

which thereby warrant specific consideration.

Capital allocation

policy

Our capital allocation policy aims to

provide clarity on the allocation of available

capital to fund investment in the business

alongside the payment of dividends or

other distributions to shareholders.

The overarching objective of our policy

is to ensure we meet the needs of all

stakeholders, which we believe is best

achieved by:

• Maintaining a strong balance sheet with

a Bank Net Debt: adjusted EBITDA ratio

of less than 1.0x

• Continued investment in both news and

magazines 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

More information on our policies and all

the latest announcements of interest to

shareholders can be found on the investor

section of our website at

→ www.smithsnews.co.uk/investor-zone/

A. The likely

consequences of

any decision in

the long term

B. The interests

of the Company’s

colleagues

C. The need

to foster the

Company’s

business

relationships

with suppliers,

customers and

others

D. The impact of

the Company’s

operations on the

community and

environment

E. The desire of

the Company

maintaining a

reputation for

high standards of

business conduct

F. The need to

act as between

members of the

Company

• Our business model

– page 04

• Advancing our

Growth strategy –

page 06

• Board activities –

page 84

• Dividend policy –

page 33

• Our strategy –

page 06

• Stakeholder

engagement:

colleagues – page 35

• A Q&A with

the Colleague

Engagement NED –

page 40

• Directors’

Remuneration

Report - page 106

• Culture – page 91

• Diversity, equity and

inclusion - page 86

• Succession planning

- page 103

• Whistleblowing

hotline - page 96

• Our Sustainability

Report - page 42

• Stakeholder

engagement –

page 32

• Advancing our

Growth strategy –

page 06-11

• Our Sustainability

Report - page 42

• Stakeholder

engagement: -

page 32

• Our Sustainability

Report - page 42

• SECR disclosures

and TCFD Report -

page 54

• Board activities -

page 84

• Risk Management

Report - page 67

• Compliance and

internal controls -

page 92

• Whistleblowing -

page 96

• Culture - page 91

• Anti-bribery and

Corruption - page 96

• Our Sustainability

Report - page 42

• Stakeholder

engagement –

page 32

• Annual General

Meeting (AGM) –

page 129

• Board activities –

page 84

• Capital allocation

policy – page 33

That said, the Board remains cognisant of

the fact that other issues may be considered

as equal priorities by key stakeholder groups

and therefore these other areas so identified

from time to time may equally be included in

the Board’s deliberations and decision-making

processes.

Information is received by the Board through

a number of engagement processes, thus

enabling the Board to determine relevant issues

which may arise from our key stakeholders.

In the tables below we have set out both the

methods of engagement in respect of each

stakeholder group as well as those parties

responsible for the engagement process,

with the Board continuing to monitor the

activities and progress made in response to

stakeholder input and to review the engagement

mechanisms to ensure that they remain relevant

and deliver the desired outcomes.

How we fulfil our S172 obligations

You can find more information pertaining to how our s172 duties* have been fulfilled in the cross

references set out in the table below:

Strategic Report Governance Financial Statements

Feedback Decision Link to Strategy

Shareholders remain engaged

around anticipated new verticals

as well as current business

performance and outlook.

The Board determined that shareholders largely supported

the growth strategy comprising both organic and inorganic

growth streams, with an acceptance of possible bolt-on

acquisitions where they represent clear accretive returns to

enhance shareholder value.

Considering the views of

shareholders enables us to

promote a stable long-term

investor base as well as attracting

new investors to the register.

It aligns the Company with

investors whose expectations are

supported by our new verticals

and diversification strategy.

There was support for the adoption

of the new Remuneration Policy,

including new employee share

scheme rules, all of which are to

be put to a shareholder vote at the

2026 AGM.

The Remuneration Policy was last approved by shareholders

at the 2023 AGM (91.34% in favour) and the revised policy

will be put to a shareholder vote at the 2026 AGM. The

policy includes a 200% of salary shareholding requirement

for all executive directors, a commitment to stretching and

objectively measurable performance metrics and enhanced

malus and clawback provisions.

Further, the policy provides that LTIP grant levels adhere

with a five-year total vesting and holding period (comprising

a three-year performance period + two-year holding)

which has been adopted from FY2018 awards, and which

is replicated in the revised policy to be considered at the

2026 AGM.

This engagement allows for the

alignment of shareholder and

management interests.

Shareholders and Lenders

Who engaged?

Shareholder engagements continue to be a

shared responsibility across all Directors of

the Board, supported by specialist consultants

and the Company’s brokers, including working

closely with, and continuing to on-board, the

newly appointed communication consultants to

support management with a range of corporate

communication services.

Why engagement is important

The Company’s engagement with our largest

institutional shareholders and virtual investor

briefings to retail shareholders has helped to

define the Company’s Capital Allocation Policy

and to promote a healthy understanding of

what metrics and developments are of most

importance to these stakeholders. In particular,

it has helped to secure stakeholder views on

the Company’s growth and diversification

strategy, with particular regard to inorganic

bolt-on growth opportunities and the scale of

investment in both core business and organic

growth business opportunities.

As at the end of the financial year,

just over 65% of our issued shares

are held by ten shareholders.

Our primary banking agreements

are held with a syndicate of two

lenders, who have each been

lenders to the Company for more

than eight years.

Engagement

• One-on-one engagements with our largest

institutional shareholders (plus one investor

conference attended as organised by the

Company’s brokers).

• Formal presentations are made to institutional

shareholders and lenders by the Chief

Executive Officer and Chief Financial Officer,

followed by a formal Q&A session. The

presentations and recorded video-cast are

available to view on the Company’s website.

• Virtual investor briefings to retail shareholders

on specialist retail investor platforms, with

investors and prospective investors invited to

participate in a dedicated Q&A format with

the Chief Executive Officer and Chief Financial

Officer (e.g. Investor Meet webinars).

• Promote greater levels of transparency with

retail investors through the publication of

analyst consensus, research and key metric

data via our website.

• Ad hoc meetings with new shareholders,

non-holders and existing shareholders,

representing in excess of 50% of our issued

share capital.

• Ahead of our AGM, we regularly engage

with proxy advisory voting agencies (such

as ISS, IVIS and PIRC) and some of our

larger institutional investors regarding their

respective voting intentions/recommendations

on resolutions being put forward at the

forthcoming AGM and any synopsis of the

Company’s disclosures in the prior period

Annual Report.

• The AGM itself also facilitates one-on-one

engagement with investors, facilitating

a formal Q&A session together with an

opportunity for informal discussions with the

Board, both before and after the AGM.

• Business performance updates to the

syndicate of lenders has promoted confidence

with our lenders arising from the Company’s

financial stability in its ongoing business

delivery and improving balance sheet strength.

• Direct engagement with investors around

proposed revisions to the Remuneration Policy

which will be presented to shareholders for

approval at the AGM in January 2026.

Information provided to Board

• Board members participated in engagements

and shared feedback with the Board.

• Investor relations reports and roadshow

feedback.

• Proxy ratings and reports (ISS, IVIS and PIRC).

• Reports on specific engagements:

– Financial stability and investment returns

– Long-term sustainability

– Corporate responsibility

– Capital Allocation Policy considerations,

including DPS, EPS and TSR performance

metrics

– Ongoing investment and capital expenditure

planning

– Free cash flow and Bank net debt analysis

Smiths News plc Annual Report and Accounts 2025

Stakeholder engagement and S172 Statement continued

Colleagues

Engagement

• Board members undertook a night visit to our

Nottingham final mile depot where Directors

had the opportunity to meet colleagues,

review operational processes and to better

understand the potential risks, issues and

challenges with regard to some of the

business’s operational processes, particularly

in relation to the nascent growth initiatives.

• Colleague surveys and questionnaires - please

see details of engagement surveys undertaken

and outcomes in the People Report on

page 28.

• Colleague engagement forums, National

Engagement Forum and designated

workforce engagement director. We approach

colleague engagement through a structured

network of local forums, rolling up to the

National Colleague Forum chaired by our

People Director and attended by our CEO

and NED for colleague engagement. This year

our Inclusion Manager has also supported

this process, facilitating meetings with

representatives from our network groups

to provide a different perspective from our

colleagues than the previous year that

focused more on our depot locations.

• Specialist Colleague Consultation Forums,

representing a standing team of colleagues

from across the business and trained by

ACAS, to provide a platform for formal

consultation in discussions around significant

business change or material changes

proposed in relation to employee benefits.

• Remuneration engagement by the Chair of the

Remuneration Committee.

• Networking groups.

• Communications via the Company’s intranet

(SmithsZone), inviting feedback and dialogue.

• Town Hall meetings – including three recorded

videos of key messages to colleagues,

focusing on key business themes to

showcase the business, generating enhanced

engagement and presenting an opportunity

for Q&As.

• Training opportunities.

• Our colleague newsletter ‘Our News’ in

physical and electronic format.

Information provided to Board

• Colleague engagement survey results with

commentary on specific outcomes and

resultant action planning.

• Colleague engagement forum views and

outputs reported back to the Board by the

designated Workforce Engagement Director,

both in formal reports and verbally.

• Verbal feedback on the outcome of

the Remuneration Committee Chair’s

engagement.

• Various business and network update reports

(please see the People Report on page 28).

• Training reports (please see the People Report

on page 28).

Who engaged?

All Board members participated in a night visit

to the Nottingham depot. Michael Holt (as the

Board’s designated colleague engagement

director) met quarterly with Instore colleagues,

night teams, Location Support Managers

and the National Colleague Forum to ensure

colleagues are given a voice in respect of

matters material to our people and to share

business updates and gain colleague feedback

and insight. It is the intention to expand these

engagements to include our Trusted Leaders

and apprentice colleagues.

Our all-colleague Town Hall meetings are

recorded and produced quarterly and further

supported in person by members of the

Executive Leadership Team at each of our

largest sites to help ensure that colleagues

are able to build a rapport with senior leaders

and can freely feel able to engage in two-way

dialogue, with their questions being answered

in real time.

Why engagement is important

Enables the Board and the Executive

Leadership Team to meet directly with

colleagues and to explain important aspects

of the business and those decisions which

may impact colleagues, whilst also providing

an opportunity to receive feedback, answer

questions and understand what is important

to our colleagues.

We have just under 1,400

colleagues operating from sites in

England and Wales.

In addition, we have c.150

outsourced colleagues based at

two sites in Noida and Pune (India)

providing staffing at a Shared

Service Centre (SSC).

Strategic Report Governance Financial Statements

Feedback Decision Link to Strategy

National Colleague Forum requests.

Through our colleague network

group meetings, discussion points

have been raised around how our

bonus scheme is structured, an

appreciation for the information

shared in the Town Hall meetings

hosted by the Executive Leadership

Team and a desire from colleagues

to understand even further and get

behind the Growth streams.

Refresh of our colleague service recognition scheme

‘Extra Mile’ awards. This request was followed up with an

interactive session with the Executive Leadership Team

to develop an approach to ensure that involvement and

input remains authentic, without impacting the identity or

leadership of the network groups.

• Increased information sharing and Town Hall meetings

dedicated to explaining our strategy, the importance of

this to the whole business and promoting opportunities for

Colleagues to play their part.

• Review of the bonus schemes.

Through our network groups and

colleague engagement surveys

we encourage colleagues to share

their needs and articulate how

we can best support them, thus

maintaining an engaged workforce

where colleagues can experience

real opportunities for development

and a long and rewarding career.

Enhanced visibility and

understanding of both the

Company’s strategy as well

as clear vision and purpose

statements.

Network group presentations to

the Executive Leadership Team

regarding key issues of importance

for the network group and where

greater management involvement in

network group would be valued.

• Approval for two weeks fully paid paternity leave and

paid attendance at two antenatal scans

• Approval for fully paid neonatal leave and support for

colleagues (capped at 12 weeks’ pay)

• Unanimous support for our network groups’ activities and

discussion around executive member support, either by

being an active member of a specific network group or

as an ally and role model. This was followed up with an

interactive session with the Executive Leadership Team to

help develop an approach which ensures that involvement

and input remains authentic, without impacting the identity

or leadership of the network groups.

Informs benefits structure and

policies available to colleagues

to best recognise and meet the

needs of colleagues.

Supports an inclusive culture, and

a mechanism, which demonstrates

our Company values and where

colleagues feel acknowledged

and respected.

Stakeholder engagement and S172 Statement continued

Colleagues continued

Smiths News plc Annual Report and Accounts 2025

Feedback Decision Link to Strategy

Engagement with our major newspaper

publishers and magazines distributors

twice yearly on our sustainability agendas.

Secured formal confirmation from nearly 66% of our

publisher clients of their confirmation to our human

rights and other sustainability policies, enabling more

transparent and accurate reporting.

Supports our Sustainability

strategy.

Engagement with retail customers to

understand challenges being faced by

them provided suggestions on areas of

opportunity and collaboration.

Progressing activities to simplify the category and

improve efficiency such as EPoS based returns. We

continue to explore providing additional distribution

and recycling opportunities to synergise existing

transport and delivery activity, including capitalising

on our investments in warehouse and transport

management systems.

Supports our Sustainability

strategy and improving the wider

supply chain environmental

impact.

Engagement

• Monthly Customer Satisfaction Surveys (250)

for both Independent and Multiple Retailers.

• C.54,000 Customer Service calls per month to

resolve customer queries and promote SNapp

self-service.

• Annual survey and quarterly director review

meetings with publishers.

• Retail Director Quarterly Review Meetings.

• Periodic engagements with suppliers, with

prioritisation based on contract type and

spend.

• Company Facebook page, driving more of

our Growth initiatives directly to our retail

customers as well as promoting ‘job of the

week’ from the recruitment team.

• The Fed – making use of our relationship with

industry association ‘The Fed’, increasing

Smiths News’ branding and goodwill in

the industry through advertisements and

engagement opportunities.

Our suppliers are made up of

national publishers/distributors in

the United Kingdom as well as a

significant proportion of regional

publishers across our territories

through long-term contracts.

Customers include approximately

21,800 news outlets, ranging from

large supermarkets to high street

retailers and independent stores.

Our business model incorporates

c.640 self-employed distribution

subcontractors who are engaged

to provide services to support our

operations and deliver daily to our

customers.

In addition to our newspaper and

magazine publisher suppliers, we

have a further network of suppliers

who provide assorted goods and

services to the Company.

Information provided to Board

• Operational reports are submitted to the

Board monthly showing performance against

KPIs (including publisher and customer

satisfaction scores).

• Reports relating to potential risks, issues

or challenges with regard to some of the

business’ operational processes are provided

to the Board, particularly in relation to the

nascent Growth initiatives

Who engaged?

Customer Service team, Procurement

team, account managers and the Executive

Leadership Team.

Why engagement is important

Enabled us to obtain feedback on the standard

of service delivered to our customers and

identify opportunities to improve our service.

Encouraged the use of our dedicated self-help

app (SNapp) and reduced the volume of paper-

based content being sent to retailers in favour

of electronic versions, thus reducing cost and

supporting our sustainability agenda.

Maintaining a positive relationship across

our supply chain supports the stability of our

business and the industry sector, and underpins

value thereof, while allowing us to ensure

that we work with our suppliers in a mutually

beneficial manner.

Customers and Suppliers (inclusive of the largest publishers, retail customers and suppliers)

Strategic Report Governance Financial Statements

Feedback Decision Link to Strategy

Positive feedback on charitable

funding and support.

During FY2025 we commenced a share forfeiture process

to remove “gone away” shareholders from the share register

as well as a structured forfeiture of unclaimed dividends.

Mindful of the implications of this process, the Board

resolved to ring-fence any proceeds from the exercise, to be

used to support charitable activities.

During FY2025 we have seen

an increase in colleagues

undertaking charitable activities

as well as taking advantage of our

“matched donation” policy which

has supported our sustainability

strategy and framework

(Community pillar) and our

company ethics.

Continued support for NewstrAID,

a charity offering crucial welfare

support for individuals who are or

have been employed in the selling

and distribution of newspapers

and magazines and who find

themselves facing financial and

emotional hardship.

We have continued to support the NewstrAID charity and

encourage colleagues to become actively involved and have

volunteers on several regional committees. Activities range

from fundraising to community liaison and welfare visits.

Furthermore, and crucial to NewstrAID’s fundraising, we

facilitate and administer payments for its supporter lottery

which last year raised over £1m. The Company makes an

additional corporate sponsorship.

Supports our sustainability

strategy and framework

(Community pillar) and our

company ethics.

Engagement

• Individual colleague engagements with

charities of choice under the umbrella of our

‘We Care’ charity and community network

group, which coordinates CSR charitable

and community-related activities.

• Colleague participation in Pass It On.

• NewstrAID promotion and funding.

Information provided to Board

Regular community engagement updates are

provided to the Sustainability Committee and

the Board.

Who engaged?

Various colleagues at individual charity level

and Pass It On, as well as representatives from

the Company provide assistance and support

to NewstrAID.

Why engagement is important

Helps the Company to have a positive impact

on its local communities by supporting charities

and community groups, drives usage of our

colleague ‘volunteer day’ benefit and manage

charitable requests.

Community and Regulators

We support the print sector

through its NewstrAID charity.

Smiths News also remains the

anchor sponsor of ‘Pass It On’,

a registered charity first started

by the Company in 2017 which

helps to address the issues and

challenges of homelessness

within the UK.

We provide availability of

newspapers and magazines to

thousands of local communities

across the UK, representing a

55% market share by sales volume.

We provide availability of

newspapers and magazines to

thousands of local communities

across the UK, representing a

55% market share by sales volume.

We engage with various

regulatory bodies across the

supply chain to ensure we

comply with our regulatory

and legislative obligations.

Stakeholder engagement and S172 Statement continued

Smiths News plc Annual Report and Accounts 2025

Designated Workforce Engagement

Director and National Colleague

Engagement Forum

The Board continues to assess its approach

to engagement within the workplace, mindful

of the UK Corporate Governance Code

measures. To facilitate this process, the Board

has designated a Non-Executive Director

with specific responsibility for workforce

engagement which the Board has confirmed

remains the most effective means of colleague

engagement at the Company. The role is a

critical link in our communication and feedback

chain and is currently held by Michael Holt,

whose deep experience in the distribution and

logistics sector is especially relevant to this

engagement.

Michael has held the position since its inception

in 2019, working closely with our People team

and the National Colleague Forum, which is a

representative group from across the business.

He reports on his interactions, raising issues

and conveying the breadth and strength of

views to the Board.

The formal remit of the designated Colleague

Engagement Director includes:

• Gathering the opinions of a broad cross

section of our workforce

• Seeking to understand the concerns and

views of our workforce and articulating these

to the Board

• Ensuring that appropriate steps are taken

to consider the impact of proposals and

developments on our workforce

• Where appropriate and relevant, providing

operational and commercial updates and

feedback from the Board to our workforce

The National Colleague forum continues to be

held on a quarterly basis with representatives

from across the business who are able to raise

issues from their teams that could be of national

interest, and which may not be able to be

resolved at local forum meetings.

We believe that it is important for the Forum

to undergo a continuing process of review

which includes training for both the current

and potentially new representatives while at

the same time promoting and encouraging

both awareness and participation of the

Forum amongst colleagues. The meetings

have remained largely a top down, information

sharing approach with issues and questions

raised by the colleagues at the end of the

meeting. Michael has also informally met

with different groups of colleagues across

the business, supported by our Inclusion

Manager who has facilitated meetings with

representatives from our network groups as well

as Instore colleagues, night teams and Location

Support Managers. This has moved the focus

away from a location-based engagement

and has allowed a different perspective to be

presented from our diverse range of colleagues,

which will be further developed by expanding

these engagements to include both our

‘Trusted Leadership’ cohort (who comprise up

and coming talent across the business) and

apprentice colleagues.

Strategic Report Governance Financial Statements

Employee engagement – Q&A with Michael Holt

Michael Holt has been a member of the Board since 2018.

As well as being Chair of the Remuneration Committee, he

is a member of the Audit, Sustainability and Nominations

Committee – and also the Non-Executive Director with

responsibility for employee engagement.

Enthusiastic about his role, he has spent considerable time meeting,

consulting and listening to colleagues across the business. His perspective

is enhanced by distinguished career in the logistics sector with deep

experience of managing through change and operating successfully in

challenging markets.

In this Q&A, we explore what he has learned and how this feeds

through to the Board and its decision making.

Talking with Michael

Holt about connecting,

consulting, and

listening to colleagues

Can you briefly outline your

role in relation to employee

engagement?

My role is to champion the employee voice

at the Board and ensure we are considering

and acting on the views and concerns of

colleagues from across the business. Of course,

I can’t do that alone, so it’s important to see

all this in the context of the long-established

communication processes that include the

biannual engagement survey, the various

network groups, and regular Town Hall all-

colleague meetings. In many ways, what I

set out to do is sense check and supplement

those engagement methods with hands-on

involvement and, critically, visibility in

the business.

Michael Holt is Chair of the

Remuneration Committee,

and also the non-executive

director with responsibility

for employee engagement.

How do you fulfil those

responsibilities in practice?

Being seen across the business – and being

seen to listen – is central to my approach.

Early in the role, I prioritised meeting with

depot-based colleagues, and not just the larger

locations that tend to receive more attention.

It was inspiring to witness first-hand the

enthusiasm and loyalty of colleagues – and

immediately see that our people care deeply

about the business and want to contribute to its

direction and success.

Which is why I try always to create a safe space

for colleagues to say what’s on their mind and

share real world experience. In this respect

confidentially is key. So too, is speaking in plain

language and not being afraid to probe and

ask questions.

In practical terms, I also work closely with the

People Team, who ensure that actions from

my engagements followed up swiftly. This is

important for building trust and being seen to

have taken colleagues’ suggestions seriously.

and

Smiths News plc Annual Report and Accounts 2025

Does your experience

in logistics impact how

you listen and understand

concerns?

An understanding of the generic challenges,

and even knowing the industry jargon, can

certainly help to build connections and get to

the bottom of concerns. I find that sharing

real-world experience is often a good way

to tease out the issues and show that you

understand logistics is about more than

workflows and manifests. But critically, I’m

conscious that I’m there to listen and not to

lecture. So while my wider experience can help

at times, I always try to approach meetings and

visits with a ‘beginners’ mindset’ – and there’s

no doubt that in doing so I’ve learned a great

deal more than I ever imagined I would.

How do you provide

feedback to the Board, and

what impact does this have

on decision making?

Formally, I report my findings to colleagues

on the Board, who in return share their own

observations – for my role is not in isolation of,

or a replacement for, their active involvement.

As a Board we have to consider all stakeholders,

and occasionally that can mean balancing

priorities and resources. By way of tangible

example, five years ago we were navigating our

way through a pandemic while simultaneously

needing to materially reduce our overall net

debt. Our progress since then demonstrates

that the long-term interests of colleagues,

customers and investors are more closely

aligned than they ever are apart.

It's important to stress that I also work closely

with the Executive Leadership Team and that

my feedback and involvement goes beyond

our formal meetings. In many ways I try to act

as a conduit to carry messages up and down

the organisation, so that we make better – and

better informed – decisions at all levels.

What are the learnings that

really stand out for you?

The colleague network groups are a real

asset and I’m delighted that they are growing.

There is always something especially powerful

about forums that are built on individual passion

and commitment. I’ve also been impressed by

their commitment to creating a ‘safe space’ for

views and opinions, particularly when exploring

those areas where language can be highly

sensitive and even well-intentioned comments

are sometimes misconstrued. That spirit of

everyone learning together and ‘everyone-in’

is great to see.

More broadly, if there is one thing my

involvement to date has confirmed, it’s that the

collective experience in any depot or network

group will always surpass that of any individual,

no matter their expertise. It’s vital that we

harness that embedded knowledge and learn

from the diversity of views and perspectives

that is there for us to tap into.

What are your views on the

key engagement challenges

as we go forward?

Actually, the messages I consistently

hear from colleagues are invariably focused

on opportunity rather than challenge in its

narrowest sense. On the whole, our colleagues

say they enjoy working at Smiths News, have a

good relationship with management and would

like to stay for the remainder of their career. But

while they understandably want to have choices

for their future, they also recognise that means

embracing change, even if it can be unsettling

at times.

At a practical level, we have new skills to acquire

and greater scale to build in our target markets.

Nor should we underestimate the ongoing

challenge of finding efficiencies – or perhaps

better put, finding new ways of delivering

efficiently for our customers. But if maintaining

our market leadership, while simultaneously

applying our capabilities differently, is the

essence of our future direction – then, without

doubt, our people are the critical component of

succeeding on that journey.

It was inspiring to

witness first hand the

enthusiasm and loyalty

of colleagues — and

immediately clear that

our people care deeply

about the business and

want to contribute to its

direction and success.

Strategic Report Governance Financial Statements

Where to find information in our Sustainability Report: Page

Compliance Statement (against TCFD and Companies Act regulations) 42

Chair’s introduction - providing highlights of the year 43

Committee composition, attendance and activities 43

Sustainability strategy (incl. climate risk) 44

Oversight /governance (incl. climate risk) 46

Summary of Pillar KPIs, performance and FY2026 commitments

• Governance 48

• People 49

• Responsible Partnerships 51

• Community 52

• Environment 53

Risks and opportunities 56

Non-financial and sustainability information statement and non-financial

key performance indicators 58

Summary appendix of our key disclosures in relation to the 11 TCFD

recommendations 59

Sustainability Report

Our strategic pillars drive

our actions and commitment

Paul Baker

Sustainability Committee Chair

Our Key Performance

Indicators support

both transparency

and accountability

and we continue to

make progress across

all of our five pillars.

Compliance statement

CFD

We have set out our climate-related financial

disclosures as required by The Companies

(Strategic Report) (Climate-related Financial

Disclosure) Regulations 2022, which is also in

line with the UK Listing Rules (UKLR: 6.6.6R(8)

and 6.6.8G). We have fully complied with the

requirements of CFD.

TCFD

This also constitutes our response to the

recommendations and recommended

disclosures of the Taskforce on Climate-related

Financial Disclosures (TCFD), as well as the

TCFD Annex which has been applied where

relevant. We have made disclosures that are

aligned with the TCFD core element areas,

and we have complied fully with the required

11 specific recommended disclosures save for

Strategy Recommendation B. While we have

described the impact of climate-related risks

and opportunities on our business and strategy,

we could expand on the impact these risks have

on our financial planning.

The financial operational cost impact of climate

change (e.g. introduction of low emissions

zones, risk of property flooding, necessity of

provision of air conditioning etc.) is partially

taken into consideration within our three-year

business planning cycle but further modelling

in relation to the impact thereof on financial

income has not been undertaken. As the CFD

requirements are to describe the impact on the

business model and strategy, without specifying

the impact on financial planning, we believe we

have fully complied with the CFD requirements.

We acknowledge that we could benefit from a

more accurate and bespoke analytical model,

but we do not have the internal resources to

undertake this work, nor do we believe that

the forecasted expenditure of such analytical

models is currently justified nor necessary for

us to be able to more accurately assess our

climate-related risks, their financial magnitude

or the associated timelines.

A summary appendix of our key disclosures

in relation to the 11 TCFD recommendations

and the 8 CFD requirements are set out at

the end of this TCFD report on page 60.

Smiths News plc Annual Report and Accounts 2025

Committee Activities

30 April 2025

• Sustainability pillars progress report

against targets and consideration of

action plans to achieve targets set

• Risk review

• Transition Planning review

22 July 2025

• Sustainability pillars progress report

against targets and consideration of

action plans to achieve targets set

• Strategic review of Sustainability

approach

• Reviewed Data Process Assurance

mapping

31 October 2024

• Reviewed year-end emissions data

• Sustainability pillars progress report

against targets and consideration of

action plans to achieve targets set

• Risk review

• Review of metrics and targets for

FY2025

16 January 2025

• Sustainability pillars progress report

against targets and consideration of

action plans to achieve targets set

• Considered proxy voting reports

and sustainability messaging in their

commentary

• Reviewed Sustainability Policy

• Considered Net Zero Carbon audit and

context of what Net Zero really means

for the Company

Chair’s introduction

On behalf of the Board Sustainability

Committee, I present the FY2025 Sustainability

report which outlines the key progress we have

made in the review period towards achieving

our Sustainability strategy.

This year has seen us focus on the collection

and integrity of our data, ensuring it is

accurate and repeatable. Our project team

has expended considerable time and effort on

better understanding our data including how we

collect and calculate our emissions across our

whole business, with a focus on ensuring that

what we report is correctly defined, properly

measured and accurately reported. I am pleased

to report that while some small discrepancies

were identified, and corrected, we believe our

data to be reliable and repeatable for future

years, thereby allowing meaningful comparisons

to be made.

Our Key Performance Indicators (KPIs) support

both transparency and accountability and we

continue to make progress across all of our

five pillars. Our two particular focus areas of

‘Environment’ and ‘People’ have seen good

progress, with our Scope 1 and 2 emissions

reducing and our D&I network groups being

heard and influencing decisions across the

business, while it is also noteworthy that our

‘We Care’ network group has spread across the

business and ignited colleague engagement,

particularly in our charity work.

The long-term sustainability of the Company

is being supported by our new verticals (e.g.

comprising reverse logistics recycling, final mile

and new categories distribution support) and

this year we took considerable time to consider

our position in respect of Transition Planning in

this light. While we support transition plans in

principle, we made the decision not to publish

a formal plan in FY2025, although we did

publish our ESOS commitments in line with

legislative requirements.

The decision not to publish a Transition Plan

was influenced by the release of the UK SRS

(UK reporting standards) for consultation

in June 2025 as well as the reality that our

business is on the cusp of change and thus

it would be speculative to make any sort

of accurate prediction regarding our future

emissions, and thus also any reduction thereof

to net zero. Taking into account the horizon

to achieving net zero and the trajectory of our

business, we do not believe that we are able

to credibly formulate a meaningful Transition

Plan beyond being able to explain the current

initiatives being taken and to reiterate our

commitment to conduct both our current and

future business in a way that demonstrates our

support for a low-emission, climate-efficient

economy. In that regard, we believe it best not

to commit to such a plan but to instead focus

energies on what we are already doing and for

which good progress is being made.

As we do not have all the necessary resources

internally, we still make use of the services of

external consultants to assist us in meeting our

regulatory and reporting requirements.

Our sustainability strategy enjoys the full

support of our Board, and the Sustainability

Steering Group not only supports the Board

with the provision of data and reports but

has also ensured that our strategy receives

the necessary support and encouragement

throughout our business, with robust grass

roots engagement and participation. As I leave

the Company, I remain confident that our

sustainability agenda is well placed and will

continue to deliver against our imperatives.

Approval

This report was approved by the Sustainability

Committee and signed on its behalf by:

Paul Baker

Sustainability Committee Chair

3 November 2025

Composition and attendance

Members throughout

the year

Committee

member since

Meeting attendance

Paul Baker - Chair 23 April 2024 4/4

David Blackwood 23 April 2024 4/4

Jonathan Bunting 23 April 2024 4/4

Denise Collis 23 April 2024 1/1 resigned at AGM January 2025

Manju Malhotra 16 January 2025 3/3 joined January 2025

Michael Holt 23 April 2024 4/4

Deborah Rabey 23 April 2024 4/4

Mark Whiteling 23 April 2024 4/4

1 The maximum number of meetings held during the year that each director could attend is shown next to the number attended.

Strategic Report Governance Financial Statements

Our Sustainability Strategy

During FY2025 we reviewed our sustainability

strategy and approach, including reviewing

our climate-related risks and opportunities.

We have concluded that our five pillars

accurately reflect our approach which we

believe remains effective and which guide

our actions, enabling the determination

of suitable metrics and targets, effective

resource allocation, identification of targeted

initiatives, and systematic progress monitoring

within each area. These strategic pillars

directly address 11 of the 17 United Nations

Sustainable Development Goals, reinforcing our

commitment to fostering enduring prosperity

for both humanity and the planet.

We have approved metrics and Key

Performance Indicators for each of our pillars

which enable us to be held accountable and

for our progress to be tracked and measured

as we move towards our sustainability goals

and objectives. Each of the pillars is addressed

below, with our ‘Environment’ and ‘People’

pillars being specific focus areas.

Since setting our emissions reduction targets

in FY2022, our focus has been on opportunities

presented by our buildings and fleet, which

have contributed to mitigate two of the five

climate-related risks we have identified

including: 1) reduced reliance on fossil fuels,

reducing exposure to energy blackout and price

volatility within the market and 2) reducing fleet

emissions to reduce the impact of ultra-low

emission zones.

We have also adapted our strategy to harness

opportunities including the establishment

of Smiths News Recycle (see page 08 for

further details).

While we had indicated in our FY2024 report

that we would look to develop a transition

plan in FY2025, as explained in the Chair’s

introduction we have deferred this. Having

regard for the horizon to achieving net zero

and the trajectory of our business, we do

not believe that we can credibly formulate a

meaningful Transition Plan at this time. We

remain committed to meeting our near-term

SBT (Science Based Targets) as published in

2023 (from a FY2022 baseline) and, following

completing a net-zero assessment undertaken

at our Birmingham depot in FY2024, we

have taken the learnings and suggestions

into consideration to better understand the

feasibility and investment which would be

required to reach net zero at this site and

how the reduction initiatives identified could

be extrapolated across our business at the

other 34 sites. Accordingly, when finalising our

Energy Saving Opportunities Scheme (ESOS)

submission in the year, the proposals of the

net-zero assessment were considered and

incorporated where applicable.

In this regard, when considering suggested

interventions, actions which required a greater

than three-year pay back were not considered

to be operationally expedient given the current

long-term state of change of the business, with

cost efficiency and the overall sustainability of

the business being considered to be paramount.

Coupled with the net-zero assessment, and in

preparation for the ESOS submission, energy

audits were also undertaken with a view to

identifying additional action which we could

use to reduce our emissions and reduce our

climate risk.

Following the publication of our targets in

FY2023 we were able to identify and harness

the inevitable ‘quick wins’ to drive the reduction

of emissions. This led to a drive towards

increased energy efficiency through upgrades

to our lighting and heating equipment and

installation of additional smart control systems

(automatic lighting, radiator controls and power

consumption monitoring).

We have also sought to influence our employee

behaviour and awareness of climate risk

through encouraging a decrease of temperature

settings and understanding baseload outside

of operational hours.

Finally, we have transitioned to alternative

energy sources where applicable, including

migration from gas boilers to electric and the

installation of solar PV or heat pumps, thus

supporting our move to low carbon energy.

We have continued to convert our forklift trucks

to electric following a successful transitioning

of our entire company car fleet to EV (Electric

Vehicle)/hybrid at the end of FY2023.

We will continue to assess the suitability and

investment requirements of the implementation

of further emission reducing actions across our

business and remain committed to meeting

our stated near-term targets. As our business

evolves in line with our stated growth ambitions,

we will continue to ensure that climate risk and

impact are considered as part of our strategic

decision-making and resource allocation.

Specific actions to be taken are set out under

each pillar on the next page.

Sustainability Report continued

We have approved

metrics and Key

Performance

Indicators for each

of our pillars which

enable us to be held

accountable and

for our progress

to be tracked and

measured.

Smiths News plc Annual Report and Accounts 2025

Our Sustainability Pillars

Governance

Compliant and

transparent reporting

Objective

Compliant and

transparent reporting

Related risk

Legal and regulatory

compliance

Read more on page 51

Strategic Report Governance Financial Statements

Oversight of Sustainability

(including Climate

Governance)

Effective oversight of sustainability is

underpinned by our Sustainability Committee

which supports the Board to ensure oversight

of the Company’s Environmental, Social and

Governance strategy while monitoring progress

against key performance indicators. The

Committee has approved terms of reference

and has met four times during the year.

Our Sustainability strategy and approach

includes clear internal responsibilities,

measurable KPIs which are monitored

and reviewed as required and regular

communication of our performance to

stakeholders. This approach is aligned to our

Company values, with Sustainability viewed as

fundamental to maintaining a strong business

reputation and for building trust and alignment

in our brand. Climate risk and sustainability

are considered at all levels of the business

and upholding solid business principles is vital

for attracting and retaining new customers,

talented employees, and investors. It also

strengthens our relationships with supplier

partners and external regulators. Ultimately,

this creates value for our shareholders and

ensures that we operate efficiently, ethically

and sustainably.

The Board's role is to oversee the Company's

sustainability strategy, set by the management

team, and monitor progress against our

targets. We have a dedicated Sustainability

Committee which is supported by the

Audit and Remuneration Committees as

well as our Executive Leadership Team

and Sustainability Steering Group. The

Sustainability Steering Group has delegated

responsibility for operationalisation of the

Company’s sustainability strategy, identifying

and assessing climate and sustainability risks

and opportunities, assessing progress against

KPIs and shaping the future sustainability

strategy. Further details of our KPIs are outlined

in respect of each pillar throughout this report.

Responsibility for the day-to-day management

of activities is cascaded to functional roles,

mirroring the way that other risks are managed

within the business. Further details of this

process can be found, in the Risk Management

Report on page 67.

Upskilling and training to the Board and

Executive Leadership Team remains a

priority given the wider Sustainability agenda

(and associated legislation and reporting

requirements) undergo significant change

and development.

We monitor trends and developments and

seek to ensure a broad understanding across

the Board, executives and all colleagues,

adopting a combination of internal updates

and use of external experts to provide context

on specialist topics, enabling empowered

and informed decision-making to take place.

We have integrated Sustainability into our

broader employee engagement strategy and

have dedicated one of our quarterly town hall

all-colleague meetings to Sustainability, thus

ensuring that there is a two-way communication

process across the business, allowing

colleagues to understand actions we are taking

and encouraging their participation across

the business with both action support and the

sharing of ideas and suggestions. We also have

a policy to ensure that external communications

are centralised, verified and consistent.

The FY2024-2026 and FY2025-2027 LTIP

awards each include a sustainability metric

thereby linking sustainability incentives at a

senior managerial level. Further information on

this and the percentage of overall renumeration

can be found in the Directors’ Remuneration

Report on page 106.

For more information pertaining to the

governance of our wider sustainability approach

please see the Corporate Governance Report

on page 74, or for specific climate governance

please see the Environment/Climate

Governance section on the next page.

Sustainability Report continued

Smiths News plc Annual Report and Accounts 2025

All colleagues

• Take responsibility to support our

Sustainability strategy through actions

and attitude

Sustainability Steering Group

• Meets monthly under chairmanship of CFO with all pillars represented

• Delegated responsibility for development of sustainability strategy, including its ongoing

refinement

• Management of sustainability and climate risks

• Setting and monitoring of targets and metrics with all KPIs and targets are updated monthly, with

the colleagues responsible for specific implementation plans updating the functional owner of the

sustainability strategy pillar under which the action lies

• Communication strategy (internal and external)

• Reporting (To Executive Leadership Team, Sustainability Committee/Board and overseeing both

internal and external messaging)

Operational Teams

• Data management

• Identification of risks to be escalated to Sustainability Steering Group

• Implementation of emissions reduction, climate mitigating and

sustainability activities e.g. fleet management, publisher service team

leveraging supplier relationships and site management

Executive Leadership Team

• Monitors risk and progress towards

sustainability KPIs

• Embeds Sustainability and Climate into

business culture and messaging

Board

Overall responsibility

Audit Committee

• Oversee risk management, including

climate risk

• Oversees external disclosures,

including emissions data and supports

Sustainability Committee in this regard

Sustainability Committee

• Quarterly meetings chaired by CFO

• All executive and Non-Executive

Directors attend

• Oversees sustainability strategy,

including climate risk

• Challenges and monitors progress

against metrics and targets

Remuneration Committee

• Oversee implementation of incentive

payments, including ESG LTIP

Strategic Report Governance Financial Statements

Governance – Compliant and transparent reporting

Ambition KPI FY2024 Progress

FY2025

FY2026

Compliant and

transparent

reporting

1. London Stock

Exchange Group

Governance

score of > 85%

82% 81%/A-* We will continue to look

to meet our KPI through

a programme of Board

support, training, policy

review and monitoring of

risks and performance.

* The score lags approximately nine months behind the reporting month; thus, we will only get an updated score for September 2025

in or around June 2026. Hence, the reflected score here is as at June 2024

Governance

We consider ratings from different agencies

and proxy voting opinions, acknowledging

the use of various elements and metrics for

scoring. We have chosen to use the FTSE

Russell ESG scoring methodology which is used

by the London Stock Exchange (LSE) as our

performance measure. This does not mean it is

the only correct or best methodology, but rather

we find it to be an objective and practical target

with clear metrics for guiding our progress and

enabling us to benchmark ourselves against a

wide range of companies operating in the UK

who are similarly listed on the LSE. While we will

continue to strive to improve our rating, when

considered against the benchmark group, we

remain satisfied with our score.

Areas considered in the rating process include:

• tax transparency – See Tax strategy:

www. smithsnews.co.uk/wp-content/

uploads/Tax_Strategy_2025.pdf

• risk management – See Risk Management

Report on page 67

• anti-corruption – See Audit Committee Report

on page 96

• corporate governance – See Corporate

Governance Report on page 74.

ESG metrics are included within the personal

objectives of the Executive Directors and

therefore impact bonus payments. In addition,

ESG metrics are included as an executive

performance measure within the last two LTIP

awards (the next award will be made after the

completion of this report). Please refer to our

Directors’ Remuneration Report on page 106

for more information on executive remuneration

and employee engagement around pay.

We have maintained

our overall

engagement levels

throughout FY2025.

Smiths News plc Annual Report and Accounts 2025

Sustainability Report continued

People – Diversity and inclusion

Ambition KPI FY2024 Progress FY2025 FY2026

Support a

diverse and

inclusive

workforce

2. 30% increase in the number

of colleagues from minority

groups recruited into

leadership positions over the

next five years

(FY2021–2026)

22% Gender 35% achieved

against a

five-year baseline

Target of 43%

We continue to ensure that our attraction and selection

strategies are inclusive. We will analyse the impact of our

recently-launched Employee Value Proposition and will

drive the collection of diversity data across the workforce.

Our focus will be on upskilling line managers, particularly

around unconscious bias, and conducting a fair and

inclusive selection process, alongside the launch of new

supporting materials and guidance.

11% Ethnicity – 9%

achieved against a

five-year baseline

Target of 10%

Supporting

colleagues

by driving

engagement,

development

and training,

and diversity

and inclusion

3. Maintain participation rate of

above 75% for each colleague

engagement survey and

drive engagement through

improvement in colleague

engagement score by 1 – 3%

over next 12 months

88% Participation rate: 85% We will be launching training and enhancements to the

engagement survey tool in autumn 2025, supporting

managers to easier identify and action plan against

themes and trends.

9%-point

increase

from

October

2023 to

April 2024

Engagement Scores:

• October 2024 63%

• April 2025 64%

Demonstrate

a skilled

workforce

through

mandatory

certification

4. % of colleagues who

have achieved mandatory

certification: above 90% for

non-PC users and 98% for

PC users

97.1% Non-PC Users: 97.4% We will launch a new capability on our Learning platform

to set up and manage personal development action

plans – this will ensure they are more accessible for all and

also support analysing key themes and trends across

the business.

We will also test a new approach on conducting mandatory

certified learning. The approach will focus more on testing

retention of information and directing colleagues to more

personalised required learning.

98.2% PC Users: 98.5%

Engagement- We have maintained our

overall engagement levels throughout FY2025

(participation at 85%), which is an encouraging

result that stands in contrast to the wider UK

trend. In particular, we have seen an increase

in the number of colleagues who would

recommend Smiths News as a great place

to work and who feel motivated to do their

best. We have also seen an increase of 4%

point in the April 2025 survey for colleagues

agreeing they have the necessary learning and

development support they need to do their

job well, coupled with significant increases in

enablement scores, driven by site and head

office refurbishments.

Diversity & Inclusion- Our focus on inclusion

continues to be important, with us launching

in the year our fourth network group – ‘Pride

News’ network. We particularly welcome that

the efforts of these network groups are now

being externally recognised for driving positive

new initiatives and policies, with ‘fostering

friendly’ accreditation having been achieved

and our ‘Women in News’ network group

having been shortlisted for an industry award.

People

Embracing diversity is key to staying

competitive in today's global marketplace and

brings a wider range of perspectives and ideas,

increases innovation and creativity, promotes

better problem-solving, improves decision-

making, and delivers a more inclusive work

environment. We have reported against a target

to increase the proportion of leadership from

ethnic minority backgrounds as our D&I data

indicates that within our business diversity

decreases with seniority, and while we will

continue to focus on this internally, for FY2026

we will look to amend our target to include the

% of our workforce that have completed all data

points on our electronic database, disclosing

against both gender and diversity criteria. This

will provide a sound base to consider moving

the metric to the total workforce rather than

the narrower leadership measure we currently

use. We are also focused on the development

of a future diverse talent pipeline, with 33%

of the current Executive Leadership Team

being female. Please refer to our Corporate

Governance and Nominations Committee

Reports on pages 74 and 102 respectively for

more information on diversity at a Board and

Executive Leadership Team level. Please refer

to our People Report on page 28 to learn more

about our colleague network groups as well as

our overall approach to diversity and inclusion

across our business.

Gender pay gap data

is communicated and

made fully accessible to colleagues and other

stakeholders, including publication on the

relevant Government websites. The Company

will update its gender pay gap report in due

course, in line with the required reporting

timetable and no later than 4 April each year

– details will be published on the Company’s

website at www.smithsnews.co.uk/investor-

zone/. Our detailed report for the previous

year’s submission (2024 retrospectively for

the previous year and in April 2026 we will

report the 2025 statistics) is available to view

and download on the Company’s website at

Smiths_News_gender_pay_gap_2024.pdf.

Smiths News reported a lower mean gender pay

gap of 9.53% in 2024 against the ONS mean

gender pay gap for all workers in the UK in

April 2024 of 13.1%.

Strategic Report Governance Financial Statements

Maintaining & Retaining our Talent

(Training and Development)- As a business

we understand the importance of retaining

and developing our colleagues’ skills and

knowledge to ensure that we are equipped to

flourish. In providing relevant and accessible

training and development interventions,

we are committed to investing in personal

and professional development, helping to

increase job satisfaction, and reduce employee

turnover. We take a targeted approach to our

sustainability training, focusing on specific

roles responsible for ownership and delivery

of our decarbonisation workstreams. Our

‘Trusted Leadership’ programme (which

focuses on equipping participants with the

skills, knowledge and behaviours of creative

and inspiring leaders who are committed to

self-improvement and supporting others) saw

twenty six colleagues from across all areas

of the business complete the programme

with a further ten colleagues currently in

the programme, providing promotional

opportunities and developing our internal

skills pipeline.

The programme provided workshops, expert

sessions and support surgeries. This year has

seen a focus on utilising the apprenticeship

levy as a financially viable alternative to

external training solutions. An example of

this is the promotion and development of OE

(Operational Excellence) champions from

across the business who have completed an

apprenticeship ‘Improvement Practitioner’

course and which recognised the development

needs of a growth business with an OE focus.

The ability to utilise the levy enabled the

business to provide a formal qualification from

existing funds, with 22 colleagues benefiting

for the period FY2025/2026. In addition,

our apprenticeship training currently has 20

apprentices in learning across a variety of

disciplines and levels.

Staff turnover- Employee turnover is tracked

and internally reported monthly as a way

of monitoring and tracking the success of

our retention initiatives. We undertake exit

interviews with colleagues who depart to

ensure we capture feedback that can inform

our strategy. In addition to this we also survey

colleagues on completion of their first three

months in the business. Identifying any issues

or ideas early in their tenure ensures a quick

resolution and seeks to prevent unnecessary

turnover while monitoring the success and

impact of our recruitment practices.

Employee turnover FY2025 FY2024 FY2023

All employees 18.88% 32.87% 30.30%

Board of Directors 16.66% 0% 0%

Executive Leadership Team 0% 0% 0%

Executive Team and other

Senior Managers

6.25% 4.17% 9.09%

People continued

Gender composition: 30 August 2025 Headcount Gender composition: 31 August 2024 Headcount

Gender Male % Female % Total Male % Female % Total

All employees 801 59.1 556 40.9 1,357 832 59.9 556 40.06 1,388

Executive Leadership Team

(excl. Executive Directors)

5 62.5 3 37. 5 8

4 57 3 43 7

Executive Team and other

Senior Managers

20 80 5 20 25

16 73 6 27 22

Board of Directors 5 71 2 29 7 5 71 2 29 7

Gender pay gap data is communicated and

made fully accessible to colleagues and other

stakeholders, including publication on the

relevant Government websites.

The Company will update its gender pay gap

report in due course, in line with the required

reporting timetable and no later than 4 April

each year – details will be published on the

Company’s website at http://www.smithsnews.

co.uk/investor-zone

Our detailed report for the previous year’s

submission (2024 retrospectively for the

previous year and in April 2026 we will report

the 2025 statistics) is available to view and

download on the Company’s website at

smithsnews.co.uk/wp-content/uploads/

Smiths_News_gender_pay_gap_2024.pdf.

Smiths News reported a lower mean gender

pay gap of 9.53% in 2024 against the ONS

mean gender pay gap for all workers in the UK

in April 2024 of 13.1%.

Smiths News plc Annual Report and Accounts 2025

Sustainability Report continued

Responsible partnerships

Ambition KPI FY2024 Progress

FY2025

FY2026

Responsible

partnerships

through ethical

sourcing, a

sustainable

supply chain

and secure data

management

5. 95% of non-trade suppliers*

registered on our procurement

system and that have agreed to our

supplier code of conduct

98% 98% We will continue to engage with our supplier network to

ensure that all preferred suppliers meet our sustainability

compliance requirement

6. Protection of data: 98% of PC User

Colleagues with current certification

security/data protection awareness,

supported by two anti-phishing

campaigns within the year

95.65% 98.3% Security and data protection awareness certification and

identification and addressing of data security risks

Anti-phishing campaigns 2x yearly

Recording and reporting of data breaches (% of personal

data and number of customers affected

* Non-trade suppliers do not include publisher clients

Supplier management- We continue to work

closely with our suppliers and customers, with

a focus on aligning our sustainability objectives.

Our supplier code, ethical trading policy,

and modern slavery policies undergo annual

reviews, and we have recorded no compliance

issues or concerns in the year. This report will

be the last that will report against a KPI that

measures against ‘non-trade’ suppliers. In

the past we excluded our publisher clients in

this metric despite publishers accounting for

the lion’s share of our annual supplier spend

because they do not transact through our

specific digital procurement platform which

requires confirmation of compliance to our

policies prior to registration. This year has seen

us engage with these publisher clients (both

newspaper and magazine clients) to ensure that

they either sign up to our policies or confirm

that they comply with their own policies which

are at least equal to or no less onerous than

ours. Going forward we propose moving to a

reporting process which measures against our

‘total supplier’ spend. Ensuring responsible

standards in our supply chain is a focal point

of our procurement policies. All preferred

suppliers must adhere to our supplier code,

modern slavery, and anti-bribery policies, and

demonstrate their commitment to upholding

these standards. Further information is available

on our website under ‘Working Responsibly -

Smiths News’.

The Company remains actively engaged

in monitoring and enhancing supply chain

standards, leading the way in best practices

and adopting the voluntary codes of the Press

Distribution Forum (PDF), which operates

under a service charter with a complaints

process benefiting all members. Stage 1

pre-complaints across all news wholesalers

in the UK reduced from 137 in 2023 to 82

in 2024, with those related to Smiths News

decreasing slightly from 43 to 42 in the

same period. Most formal complaints were

linked to delivery timeliness followed by

order management. We are dedicated to

resolving issues before they escalate to formal

complaints, with recent PDF analysis showing

that the average time to conclude a complaint

comfortably meets the 28-day deadline, with

Smiths News averaging 18.3 days (compared

to 14.1 days in 2023). Additionally, beyond

the PDF Charter requirements, Smiths News

continues to implement an automatic service

failure payment scheme in cases where the

daily news is delivered over two hours late,

irrespective of inbound delivery times that

may be beyond our control. This scheme,

exceeding the PDF Charter and our contractual

obligations, continues to be well received by

retailers and their representative trade bodies.

Payments in FY2025 under this scheme fell by

26% compared to FY2024 demonstrating the

improvement in our delivery time performance

over the year.

Data and cyber security- Cyber security

remains a critical focus area for the business,

with ongoing initiatives aimed at strengthening

our security posture across the entire IT

estate. During the review period the Board

acknowledged the recent high-profile attacks

on multiple UK businesses, and additional

measures which have been taken to safeguard

Smiths News, including technical and

procedural controls. Cyber incident simulations

and specialist training have taken place, and

our response plan has been tested as well as

the completion of two phishing campaigns with

learnings implemented. The ongoing security

assurance program, wider business continuity

testing and awareness training help to keep

the business prepared for current and future

threats. Some of the key activities this year

include the modernisation of critical systems,

including a new warehouse management

system and an integration platform, which

has allowed the business to move away from

ageing systems and which brings enhanced

security. Additionally, the move to a leading

24/7 security provider for security services is

providing much greater capability to detect and

defend against threats in real time. Additional

enhancements have been made to our email

and internet security gateways, delivering

stronger protection against external cyber

threats. Training programmes have also been

deployed to improve colleague vigilance against

social engineering attacks, including phishing

attempts. Please see the Audit Committee

Report on page 92 for more details.

Responsible partnerships

Strategic Report Governance Financial Statements

Community

Our ‘We Care’ network group serves as our

charity and community forum, comprising

colleagues from various departments across

the Company. This colleague-led group is

dedicated to coordinating CSR charity and

community initiatives throughout Smiths

News. The primary goal of the ‘We Care’

group is to facilitate a positive impact on our

local communities by providing support to

charities and community groups. It oversees

all charitable requests, including a colleague-

matching pot funded by the Company and a

six-month dedicated charity focus, and operates

two working groups focusing on Volunteering

and Charity respectively. Additionally, the forum

actively promotes the use of our volunteer day

benefit for colleagues, collaborating with local

councils to explore available resources and

opportunities, and maintaining our commitment

to contributing both financially and through the

dedicated time of our colleagues. Specifically,

we extend support to NewstrAID (Charity

supporting workers within the print industry),

the industry-specific charity for publishing

professionals, and Pass It On.

Smiths News

makes an active

and substantial

contribution to

communities we

serve throughout

the UK by ensuring

widespread

availability of news

and information,

including to remote

rural locations that

would not typically

receive a regular

delivery of many

other products.

During FY2025 we commenced a share

forfeiture process to remove “gone away”

shareholders from our share register as well as

a structured forfeiture of associated unclaimed

dividends, with the Board committed to ring

fence proceeds from this exercise and for them

to be directed and used to support charitable

activities. In FY2026 we intend to report of the

amount recovered from this exercise and the

manner in which some of the proceeds have

been distributed.

For more information and case studies on our

community engagement please refer to our

Stakeholder Engagement Report on page 32.

Community

Ambition KPI FY2024 Progress FY2025 FY2026

Contribute to the

communities in which

we operate through both

charitable donations,

Colleague-led

volunteering and

Community engagement

7. Number of

volunteer days

and financial

contribution to

charity

£25,550

Volunteer days/

sessions: 55

Financial contribution:

£27,6 63

We will conduct a review of our We Care team’s

progress and initiatives, identifying what has

had the most impact in the last 12 months.

We will be launching a whole company team

initiative, enabling colleagues to work together

to raise money for charities important to them.

Smiths News plc Annual Report and Accounts 2025

Sustainability Report continued

Most of our emissions arise from the goods

which we procure (including the newspapers

and magazines that we distribute), our logistics

network and the movement of products and

our people. As such, collaboration with our

suppliers and outsourced logistics providers

is vital in ensuring we effectively manage our

climate-related risks and reduce our emissions.

Our climate risk reporting is aligned to the TCFD

framework, as required by UKLR:6.6.6R(8), and

to the requirements of the Companies (Strategic

Report) (Climate-related Financial Disclosure)

Regulations 2022. A table has been provided in

the Appendix to map each disclosure element to

relevant sections of this report.

We actively manage our climate risk and have

made significant progress in our data collection,

validation and reporting processes (including

calculating our full value chain emissions),

understanding our climate-related risks and

opportunities and adapting our corporate

governance structure to ensure we are able

to achieve our ambitions. In FY2023, we set

emission reduction targets aligned to climate

science (set against a FY2022 baseline),

evidencing our commitment to reduce our

impact and play our part in mitigating the

impacts of climate change and we continue to

monitor legislation and will review and adapt

our strategy and processes to ensure they

remain compliant and fit for purpose.

Metrics and targets- In FY2024 we did not

report our Scope 3, categories 1, 4 and 6

emissions as we were undertaking a validation

of the category 1 data (which comprises

emissions from purchased goods and services),

the largest contributor to our overall GHG

emissions. Accordingly, having completed this

review in the year this has led us to rebase

our category 1, 4 and 6 emissions from the

original data set in FY2022, resulting in a 21.9%

reduction in the revised baseline (see below)

from which to report ongoing progress.

Metrics and Targets

Ambition Measure/KPI FY2024 Progress FY2025 FY2026

Reduction of

emissions - Scope

1 and 2 and risk

mitigation: for

reputational risk.

Leadership Incentive

linked target:

4.96% YoY emission

reduction.

8. 55% absolute emission reduction

across Scope 1 and 2 by FY2033,

compared with FY2022 baseline.

(FY2022 baseline originally was

Scope 1: 1,536 tCO2e and Scope

2: 916 tCO2e but in 2024 was

restated at

Scope 1: 1,554.9 tCO2e and Scope

2: 854.1 tCO2e)

Scope 1: -9.92%

reduction from restated

baseline

(1,358.8 tCO

Scope 2: -5% reduction

from restated baseline

(813.4 tCO

FY2025 annual emissions

results from restated

baseline (FY2022)

Scope 1: -24% reduction

from restated baseline

(1,176.4 tCO

Scope 2: -21% reduction

from restated baseline

(675.0 tCO

Review company car policy

to understand viability of

changing to EV only.

Develop detailed three-

year refurbishment plan for

the upgrade of sites and to

reduce emissions.

Review solar panel options

on large sites.

Reduction of

emissions- Scope 3

and risk mitigation:

against reputational

risk and ‘Impact of

extension of low

emission zones

across major UK local

authorities’

9. 9. 55% absolute emission reduction

across Scope 3 categories 1, 4

and 6 by FY2033, compared with

FY2022 baseline comprising

purchased goods and services,

upstream transportation and

distribution, and business travel

(FY2022 baseline originally was

257,298 tCO2e but in 2025 was

restated at 200,952 tCO2e )

Scope 3: -21%

reduction from rebased

baseline

(158,275 tCO

Scope 3: - 30.18%

reduction from rebased

baseline

(140,292.76 tCO

We will continue to

engage with our suppliers,

especially our publisher

clients, and evaluate the

joint-influence of our

consolidated strategy on a

collective emissions profile.

Leverage

opportunities

to improve own

packaging compliance

(based on regulatory

packaging data) with

100% diversion of

waste from landfill.

10. Report scope to improve own

packaging (based on regulatory

packaging data) with 100%

diversion of waste from landfill

100% diversion of waste

from landfill

Trialling alternative

packaging methods to

reduce volumes/plastic.

Environment (including TCFD Report)

Strategic Report Governance Financial Statements

SECR Disclosure 2025 2024

2023

Emissions from the combustion of fuel or the operation of any facility, including

fugitive emissions from refrigerants use/tCO

e – Scope 1 emissions

1,176 1,359 1,503

Emissions resulting from the purchase of electricity, heat, steam or cooling by the

Company for its own use (location-based)/tCO

e – Scope 2 emissions

675 813 876

Total gross emissions/tCO

e 1,851 2,172 2,379

tCO

e per £ million turnover 1.74 1.97 2.2

tCO

e per FTE 1.30 2.04 1.6

Energy consumption used to calculate above emissions/kWh 9,100,827 *10,059,957 11,079,725

Estimated emissions from the mileage covered by our outsourced delivery drivers

(tCO

e) – Scope 3 emissions

11,435 *10,368.3 9,085

1. Estimated data equates to 0.2% of consumption for Scope 1 and 3% for Scope 2.

2. Please note that this value covers the emissions from our outsourced mileage which includes delivery contractor mileage and trunking. Other logistics associated with pre- and post-distribution runs

and purchased courier or postage services are not included in this total but are currently in calculation as they form part of our Scope 3 target boundary.

3. It should be noted that 2024 was a 53-week year while 2025 is a 52-week year.

Scope 1 and 2 Emissions reduction- In

FY2025 Smiths News’ total Scope 1 and 2

location-based emissions came to 1,851.4

tCO

e (FY2024: 2,172.2 tCO

e), a 14.8%

decrease compared with our previous financial

year and a 23.1% reduction since our FY2022

restated baseline (2,409.0 tCO2e). Although we

have recorded an increase in FY2025’s energy

use in both hybrid and electric company cars

this is attributable to our move to a fully hybrid/

electric fleet and is offset by the complete

reduction of petrol and diesel in the company

car fleet. Although the electricity utilisation

has increased, this has been impacted by the

emissions factor for electricity which ultimately

delivered a decrease in emissions. We continue

to identify and implement emission reduction

activities as required by SECR (see detail SECR

report and list of activities below).

Scope 3 Emissions reduction (value chain

emissions)- Scope 3 emissions that sit within

the boundary of our target (categories 1, 4

and 6) have seen a decrease year-on-year of

11.36%. In FY2024 we did not report on our

Scope 3 emissions as we were undertaking

detailed verification processes around our

data collection methodology. We have now

completed a data check and the output of this

is a rebasing across Scope 3 which has resulted

in a 22% reduction in our baseline from 257,298

tCO

e to 200,952 tCO

e and all comparatives

given are against the new restated FY2022

baseline.

Category 1 (purchased goods and services)

decreasing by 12.35% (17,212.59 tCO

e) due

primarily to a decrease in the estimated weight

of newspapers and magazines purchased in

the year which has come about as well as to

the provision of more reliable data being made

available to the Company.

Category 4 (transportation and distribution)

saw a 3.4% decrease attributable to a decrease

in trunking mileage albeit partially offset by

an increase in contractor mileage. Category 6

(business travel) saw an overall 17.1% decrease,

driven primarily by a reduction in air travel (56%)

and a 79% decrease in taxi spend, together

partially offset by a 9% increase in rail travel and

an 11% increase in hotel stays. We understand

that our largest emission source is from our

purchased goods and services in category 1. In

light of this, we acknowledge that the reduction

of Scope 3 emissions requires a collaborative

approach with all our colleagues, outsourced

delivery drivers, and publishers of both

newspapers and magazines which we purchase

and distribute as a wholesaler. We continue

to engage with our suppliers, especially our

publisher clients who as producers of the

newspapers and magazines that we distribute,

account for the majority of our Scope 3 category

1 emissions and evaluate the joint-influence

of our consolidated strategy on a collective

emissions profile.

This year has seen us focus a great deal of

our time on the reliability of our data and

ensuring it is accurate and repeatable. Our

project team has also expended considerable

time and energy on better understanding and

interrogating this data, including how we collect

and calculate our emissions across our whole

business, with a focus on ensuring that what

we report is correctly defined, properly

measured and accurately reported. This was

a worthwhile exercise which has allowed the

Committee to better interrogate the data and

reach a greater awareness and understanding

of the Company’s emissions and energy usage,

impact and management.

This review has led to a mapping of all data

collection processes which has provided

additional comfort in respect of accuracy as

well as the reliability of the underlying

processes. Where data gaps were identified,

these have been corrected. As none of

these identified gaps resulted in a material

discrepancy of more than 5%, no rebasing

of comparator years has been required.

SECR - The Company reports against the

Streamlined Energy and Carbon Reporting

(SECR) requirements (Companies (Directors'

Report)) and Limited Liability Partnerships

(Energy and Carbon Report) Regulations

2018). The data detailed in the table below

represents emissions and energy used for

which the Company is responsible including

energy used in our offices and depots, and fuel

used in company-owned or operated vehicles.

To calculate our emissions, we have used the

main requirements of the Greenhouse Gas

Protocol Corporate Standard along with the

UK Government GHG Conversion Factors

for Company Reporting 2025. Any estimates

included in our totals are derived from actual

data which have been extrapolated to cover

the full reporting year. In line with best practice

and our ongoing commitment to improving

data quality, we have enhanced the accuracy

of our contractor mileage reporting under the

voluntary Scope 3 category this year.

* Through this process, where possible, we have replaced

estimated electricity and gas consumption with actual figures

while also identifying that some data may have been omitted

from last year’s disclosure, thus enhancing our data quality.

To ensure consistency and comparability, we have recalculated

the relevant aspects of last year’s emissions and restated the

comparative figures in this year’s disclosure. This allows for a

more accurate year-on-year comparison and aligns with best

practice in environmental reporting.

Smiths News plc Annual Report and Accounts 2025

Sustainability Report continued

Internal

activities

Publisher

actions

Outsourced

logistics

Completed process mapping

of data points to verify and

validate data

Transitioned majority of forklifts

to electric

Converted Gloucester site heating

system to electric

Company vehicle fleet transitioned

to fully hybrid or electric

Head office refurbishment saw

installation of new HVAC system

and energy-efficient LED lighting

Reviewed current packaging

volumes to assess alternatives

to reduce plastic production

Engaged with publisher clients to

communicate our strategy while

seeking to better understand their

strategies, including understanding

current emissions profiles, plans

to reduce emissions and climate-

related risks and opportunities

Continued dialogue with publishers

on deforestation risk in their supply

chain and FSC certification (or

equivalent) ambitions

Commenced process to work with

suppliers, including publishers,

to share data and calculations

to assist with mutual Scope 3

verification process, including

accessibility to primary data which

would allow a move away from

a ‘spend-based’ calculation of

emissions from purchased goods

and services

Continued to identify opportunities

for route consolidation through

tracking of volume of unsold items

and collaboration with supply chain

partners to reduce overall mileage

when delivering to our depots

Promoted the transition of our

outsourced delivery vehicles to

newer models, including EURO 6

engines, and encouraged the shift

from diesel to alternative fuels like

LNG, hybrid, or fully electric options

Environment (including TCFD Report) continued

Actions to reduce Scope 1, 2 and 3 emissions during FY2025

Strategic Report Governance Financial Statements

Risks and Opportunities

Using our enterprise risk management system,

we consider risks and opportunities associated

with all of our Sustainability pillars, specifically

taking into account material significance factors

which may prevent us from achieving our stated

KPIs. In line with regulatory requirements, we

also consider both the risks and opportunities

that climate change presents to our business.

Risks include both physical risks, potentially

impacting our ability to service our customers

and communities, and transition risks, which

could escalate operating costs or diminish

overall revenue.

We have established science-aligned emission

reduction targets aimed at reducing climate

change, supported by other appropriate

mitigation measures, further details of which

can be found in the Risk Management Report

on page 67.

The transition to a low carbon economy

has also presented new opportunities for

the business, with Smiths News Recycle

(seepage08) established to support retailers

within the local communities in which we

operate to increase their recycling rates and

reduce waste to landfill.

Climate Scenario Analysis (CSA)

In line with the TCFD guidance, in FY2021

we conducted qualitative climate scenario

analysis (CSA) using multiple carbon scenarios

and time horizons. Taking into account the

horizon to achieving net zero and given that our

business is on the cusp of change we believe

that it would be speculative to make any sort

of accurate prediction regarding emissions,

and thus also the reduction thereof. We have

nevertheless attempted to model our business

over longer timeframes in an endeavour to start

to understand and adapt to risks and harness

opportunities which may materialise or be

realised over a longer horizon.

Our CSA process involved stakeholders from

across the business, representing different

functions and split across operational and

leadership roles. The plausible future scenarios

were considered, and a materiality assessment

undertaken to map the impact to our business

against its importance to stakeholders and

to prioritise the most material risks. These

risks were then rated against our risk impact

thresholds, as more fully explained in the Risk

Management Report on page 67, to help to

understand the severity of the potential impact

on the business, and the likelihood that the risk

may occur. No updates to the assessment or

the assumptions have taken place since 2021.

All risks are classified and rated using the

‘likelihood’ and ‘impact’ measures as is more

fully explained in our Risk Management Report

(page 67). In addition, climate-related physical

risks are also classified by further reference to

the duration/term, as follows:

Term

• Short term – 2028, particularly with a focus

on climate-related transition risks and policy

frameworks.

• Medium term – between 2029 and 2033,

particularly with a focus on climate-related

transition risks and policy frameworks aligned

to meet climate goals and some limited

physical impacts.

• Long term – 2033, taking into account

climate-related science-based projections

and physical impacts.

We conduct two formal risk assessments per

year, with the starting point being to identify

risks and opportunities, including those

specifically related to climate change relevant

to us as a business. During this qualitative

assessment we considered the impact of acute

and chronic physical risks (extreme weather

events, temperature increases, flooding and

sea level rise) as well as possible transition

risks covering market, technology, policy and

legal and reputation. We have identified five

climate-related risks as potentially material

to the business, using the same threshold

as our standard risk management process,

these have been amalgamated as the principal

business risk of ‘sustainability’ in our Group

risk register, which is considered, interrogated

and challenged by the Audit Committee, the

Executive Leadership Team, and the Board.

Climate Scenario Analysis

Time Horizons Carbon Scenarios Considered & Description Assumptions

Short: 2028

Medium: 2033

Long: 2033+

IEA Net-Zero by

2050: 1.5

C aligned

Early implementation of societal actions and

policy towards a low carbon economy, resulting

in the limitation of global warming in line with the

aspirational Paris 1.5°C increase.

Selected as higher transition risk in this scenario.

• Population: 45% increase

• Fossil fuel price peaks in 2030

• Advanced economies reach net zero in 2045

• Transition reliant on energy sector

• Reliant on rapid deployment of available

technologies as well as technologies that are

not yet on the market

• Smiths News emissions reduce in line with SBT

trajectory

RCP 8.5: high carbon

(>3

Failure to implement change and limited policies

to address global warming.

Selected as highest impact from physical risk.

• High population growth

• Strong reliance on fossil fuels

• Slow technological progress

Waste– we continue to look for ways to reduce

the generation of waste across our business

and where this is inevitable, we investigate

opportunities for repair, recycling and reusing

of materials. Within the business we encourage

all colleagues to recycle and have widely

distributed bins and actively encourage a

sortation of our waste. As part of our recycling

collection process and in-house generated

waste, we ensure as much is recycled as

possible, with a second sortation process

undertaken at our depots in order to remove

any recoverable recyclable materials.

We provide bins across our whole network to

enable proper segregation of waste materials

and encourage repair and reuse where possible,

with the introduction of segregated food waste

in FY2025 in line with the Simpler Recycling

regulations. Operationally we annually assess

waste generation across all of our locations

including monitoring of strapping machines to

guard against the production of unnecessary

strapping caused through damage to the

machines as well as investigating alternative

materials to remove plastic usage which

remains a focus of all purchasing. Our Waste

from Electrical and Electronic Equipment

(WEEE) is processed through our partner,

Restore PLC (formerly PRM Green) which

broadly includes the recycling of scrap

components and metal. To supplement this,

the Company has a policy of repairing

equipment where possible. All unsold

newspapers are collected from our retail

customers and recycled, with unsold magazines

also collected and recycled with any cover

mounted gifts (prominent across the Youth &

Children’s market) salvaged for reuse in future

issues or territories.

Please also see the focus report on Recycle

page 08.

Smiths News plc Annual Report and Accounts 2025

Sustainability Report continued

A dedicated sustainability risk register has been developed and is monitored by the Sustainability Committee and Sustainability Steering Group, to

ensure general sustainability and more specifically, climate-related risks and opportunities are monitored and reassessed frequently. As well as risks, we

have also identified climate-related opportunities, including lowering operating costs through energy efficiency and diversification of income streams to

offer our customers effective ways to increase their recycling rates, leading to the establishment of Smiths News Recycling. While our climate-related

and sustainability risks have remained consistent we have seen some changes in both the likelihood and impact of some of these, primarily because

of the embedding of some of our mitigation actions but also because of the changing landscape in relation to other aspects as explained below. More

information in this regard is available on page 08 and 67.

Risk assessments

Physical Risk Impact Likelihood

Increase in extreme

weather events (Acute)

Medium- to long-term

risk

Minor Possible Increased temperature and frequency of extreme weather events such as flooding

or more extreme heat days increase the risk of fire and/or flooding, inhibiting or

delaying people and vehicle access to our locations. This can also lead to more

energy consumption to ensure a safe operational environment. To mitigate this

risk, we continue to review our depot network using public flood assessments

and insurance data. Relocation will be considered where deemed necessary,

with cooling equipment hired and deployed during critical periods.

Decreasing fuel

availability and/or

increasing fuel prices

(chronic) Medium to

long-term risk

Moderate Unlikely This risk has decreased as we believe the event may occur only in exceptional

circumstances, and we have not seen any negative impact on fuel availability/

price despite geopolitical unrest in Middle East and when there were historic

escalations/shortages we were able to operate at minimum disruption.

Recent macro geopolitical events have caused market volatility and while currently

this has stabilised, we continue to monitor the risk to our business which may

include increased competition for resource, shortages impacting deliveries,

negatively impact operational costs and profitability as well as damaging the

Company’s reputation and relationships.

Transitional risk

Impact of extension

of low emission zones

across major UK local

authorities (Policy)

together with possible

increase in vehicle tax

for older/ diesel vehicles

Short- to medium-term

risk

Moderate Possible This risk has been rated as moderate given that we have not seen significant

moves to extend the low emission zones.

The extension of low emissions zones and/or an increase in vehicle tax for

certain vehicles has the potential to increased distribution costs for final mile

delivery resulting in higher operation costs for the Company, with supply to some

customers potentially proving economically or operationally unviable, reducing

our revenue and profitability. Longer term, the capital costs of using electric

vehicles would require the Company's distribution model to be reassessed.

To partially mitigate this risk, we have looked to an adaptation of our distribution

model through consolidation of last mile delivery routes in order to minimise

operational costs. A new transport management system (expected to be operation

in Spring 2026) is expected to further mitigate risk here through the adoption of

dynamic routing.

Potential for energy

supply limitation/

blackouts (Market) Short-

to medium-term risk

Moderate Unlikely Energy demand may exceed supply during peak times resulting in energy

rationing including blackouts

Insufficient UK energy capacity to meet demand at peak times, such as periods

of extreme cold or hot weather may result in energy rationing and/or blackouts

causing service interruptions to our depots, data centres and offices. This could

result in increased investment being required to enable the business to withstand

service interruption e.g. on-site back-up generation.

Increasing regulatory

requirements and

reputational risk Short- to

medium-term risk

Minor Possible Given the current direction of travel we do not anticipate significant increased

regulatory requirements which would create any undue compliance challenges.

While increasing ESG regulatory requirements and reporting obligations remain

a reality there have been some indications of a more pragmatic approach by

Regulators across the world. We remain committed to meeting all compliance

requirements and continue to monitor trends, developments and pending

legislation while engaging with stakeholders to manage perception and

expectations to safeguard the reputation of the business and manage

compliance costs.

Other risks

Within the context of our Sustainability KPIs (but outside of climate risks) we have also identified health and safety; cyber security and diversity

as risks which we look to manage and mitigate effectively against.

Environment (including TCFD Report) continued

Strategic Report Governance Financial Statements

Topic Cross reference Section

Page

reference

Employment and

Social Information

Job security People report 28

Training People Report 28

Sustainability Report 42

Health and Safety People Report 28

Audit Committee Report 92

Gender and diversity

composition

People Report 28

Nominations Committee

Report

102

Pay gap reporting People Report 28

Fair pay and financial

support, including

Colleague support fund

People Report 28

Staff turnover People Report 28

Mental health and wellbeing People Report 28

How we support our people

/ S172 statement

Flexible working People Report 28

Freedom of Association 29

Human Rights Responsible Partnerships

section of this Sustainability

Report

Modern Slavery Statement

which is available on our

website (Here)

Bribery and

Corruption

Audit Committee Report

Anti-Bribery Policy which

is available on our website

(Here)

Corporate

Governance

Governance section of this

Sustainability Report

Corporate Governance

Report

Environmental Environmental section of

this Sustainability Report.

Ethics and Culture Introduction to Corporate

Governance

Colleague

Engagement

Director

Introduction to Corporate

Governance

Stakeholder Engagement

S172 statement

Whistleblowing Audit Committee Report

Board training Introduction to Corporate

Governance

Non-financial and sustainability information statement

and non-financial key performance indicators

There are a number of additional data sets which are part of the overall Sustainability focus but

which are not identified as specific KPIs against which we measure and track our performance, and

which have been addressed in more detail in other parts of this Annual Report as indicated in the

table below. These should be read in conjunction with this report, with information required to be

included in our non-financial and sustainability information statement under sections 414CA and

414CB of the Companies Act 2006 also to be found in the following places in this Annual Report:

Human Rights Responsible Partnerships section of this Sustainability

Report

Modern Slavery Statement which is available on our

website: www.smithsnews.co.uk/wp-content/uploads/

Modern_Slavery_Sept_2025_for_FY26.pdf

Bribery and

Corruption

Audit Committee Report 92

Anti-Bribery Policy which is available on our website:

www.smithsnews.co.uk/wp-content/uploads/Anti-

Bribery_Policy_July_2025.pdf

Corporate

Governance

Governance section of this Sustainability Report 48

Corporate Governance Report 76

Environmental Environmental section of this Sustainability Report 53

Ethics and Culture Corporate Governance Report 74

Colleague

Engagement

Director

Corporate Governance Report 74

Stakeholder Engagement S172 statement 32

Whistleblowing Audit Committee Report 92

Board training Corporate Governance Report 74

Smiths News plc Annual Report and Accounts 2025

Sustainability Report continued

Taskforce on Climate-related

Financial Disclosures

(TCFD) Recommendation Relevant Section

Companies (Strategic Report)

(Climate-related Financial

Disclosure (CFD)) Regulations Relevant Section

Governance

A Describe the Board’s oversight

of climate-related risks and

opportunities.

(Full Disclosure)

Sustainability Report

Corporate Governance Report

A Describe the company’s

governance arrangements

in relation to assessing and

managing climate-related risks

and opportunities.

(Full Disclosure)

Sustainability Report

Corporate Governance Report

B Describe management’s role

in assessing and managing

climate-related risks and

opportunities.

(Full Disclosure)

Strategy

A Describe management’s role

in assessing and managing

climate-related risks and

opportunities.

(Full Disclosure)

Sustainability Report table A Describe i) the principal climate-

related risks and opportunities

arising in connection with the

Company’s operations, and ii)

the time periods by reference

to which those risks and

opportunities are assessed.

(Full Disclosure)

Sustainability Report table

B Describe the impact of climate-

related risks and opportunities

on the organisation’s

businesses, strategy, and

financial planning.

(Partial Disclosure)

Sustainability Report table

Impact of risks and

opportunities assessed but

impact on strategy and financial

planning still under assessment.

B Describe the actual and

potential impacts of the

principal climate-related risks

and opportunities on the

Company’s business model and

strategy.

(Full Disclosure)

Sustainability Report table

C Describe the resilience of the

organization’s strategy, taking

into consideration different

climate-related scenarios,

including a 2°C or lower

scenario.

(Full Disclosure)

Sustainability Report C An analysis of the resilience of

the Company’s business model

and strategy, taking into account

consideration of different

climate-related scenarios.

(Full Disclosure)

Sustainability Report table

Risk Management

A Describe the organization’s

processes for identifying and

assessing climate-related risks.

(Full Disclosure)

Risk Management Report

Sustainability Report

Assumptions of climate

scenarios used could be

expanded.

A Describe how the company

identifies, assesses, and

manages climate related risks

and opportunities

(Full Disclosure)

Risk Management Report

Sustainability Report

B Describe the organization’s

processes for managing

climate-related risks.

(Full Disclosure)

Risk Management Report

Sustainability Report

Risk Management Report

Sustainability Report

C Describe how processes for

identifying, assessing, and

managing climate-related

risks are integrated into the

organization’s overall risk

management.

(Full Disclosure)

Sustainability Report B Describe how processes for

identifying, assessing, and

managing climate related

risks are integrated into

the company’s overall risk

management process.

(Full Disclosure)

Sustainability Report

Environment (including TCFD Report) continued

Strategic Report Governance Financial Statements

Taskforce on Climate-related

Financial Disclosures

(TCFD) Recommendation Relevant Section

Companies (Strategic Report)

(Climate-related Financial

Disclosure (CFD)) Regulations Relevant Section

Metrics and Target

A Disclose the metrics used by the

organisation to assess climate-

related risks and opportunities

in line with its strategy and risk

management process.

(Full Disclosure)

Sustainability Report A Describe the key performance

indicators used to assess

progress against targets used

to manage climate-related risks

and realise climate-related

opportunities and a description

of the calculations on which

those key performance

indicators are based.

(Full Disclosure)

Sustainability Report

B Disclose Scope 1, Scope 2

and, if appropriate, Scope

3 greenhouse gas (GHG)

emissions and the related risks.

(Full Disclosure)

Sustainability Report B N/A Sustainability Report

C Describe the targets used by

the organization to manage

climate-related risks and

opportunities and performance

against targets.

(Full Disclosure)

Sustainability Report C Describe the targets used by

the Company to manage

climate-related risks and

to realise climate-related

opportunities and of

performance against those

targets.

(Full Disclosure)

Sustainability Report

Sustainability Report continued

Sustainability Terminology

ESG Environment, Society, Governance

FCA Financial Conduct Authority

IFRS International Financial Reporting

Standards

LSTA Loan Syndications and Trading

Association (ESG financing)

SASB Sustainability Accounting Standards

Board

SBTi Science Based Targets initiative

(SBTi)

SDG Sustainability Development Goals

SECR Streamlined Energy and Ccarbon

Reporting Regulations

TCFD Task force on Climate-Related

Financial Disclosures

UNDGs UN Global Compact – UN

Development Goals

Smiths News plc Annual Report and Accounts 2025

Overview

In FY2025 the Company traded

ahead of expectation, maintaining

adjusted operating profit at £39.1m

and increasing adjusted profit after

tax to £27.0m despite one week less

trading in the reporting period.

This has led to an 8% increase in the ordinary

dividend, paid at 2x cover in line with the

Company’s capital allocation policy. The

Company continues to demonstrate good cash

generation, augmented this year by additional

one-off receipts of £6.9m, including £5.4m from

the McColls administrator, which support the

proposal of a 3.0p (£7.3m) special dividend,

compared to 2.0p (£4.8m) in FY2024.

The Company’s financial results in FY2025

represented 52 weeks of trading, compared

to 53 weeks in FY2024. The additional week

benefitted revenue in FY2024 by £20.8m (1.9%)

and adjusted operating profit by £0.9m and did

not include any significant one-off items.

Revenues of £1,064.0m (FY2024: £1,103.7m),

were down 3.6% on the prior year, of which

1.9% related to the 53rd week. The remaining

movement excluding the 53rd week of -1.7%

was below the historic trend of -3% to -5%.

Additional sales of collectables in FY2025

more than offset revenues made in FY2024

from the Men’s UEFA Football Championships,

while the decline in revenue from newspapers

and magazines was within with our long-term

guidance of -3% to -5%.

Adjusted operating profit of £39.1m was an

increase of £0.9m excluding the impact of

the 53rd week with beneficial margin mix

and continuing operation cost focus driving

improved performance.

Adjusted profit after tax increased by £2.3m to

£27.0m with lower debt levels and banking fees

reducing net interest cost (£2.6m lower) and a

lower effective tax rate owing to the successful

resolution of overpayments made in previous tax

years. Consequently, Adjusted EPS increased

by 0.8p to 11.1p and this has resulted in a total

ordinary dividend of 5.55p for the year in line

with the Company’s capital allocation policy.

Adjusting items after tax were a credit of

£1.3m (FY2024 credit of £0.8m) and included a

release of the provision for McColls receivables

(FY2025: £3.7m; FY2024: £0.6m), as well as legal

expenses of £0.7m and technology programme

improvement costs of £0.7m.

Free cash flow of £36.1m (FY2025: £7.3m)

included a working capital inflow (£4.1m)

compared to an outflow in FY2024 (£17.0m),

both the result of timing differences in the

Company’s normal working capital cycle.

Excluding these movements, the FY2025

cash flow of £32.0m was higher than FY2024

£24.3m due to lower interest costs and higher

income from adjusting items (FY2025: £5.1m

inflow, FY2024: £0.4m outflow) which included

£5.4m of cash recovered from the McColls

administrator and £1.5m tax refund in respect

of the return of surplus of the Smiths News

pension scheme which occurred in FY2022.

Bank net debt improved by £14.3m from £11.0m

(debt) in FY2024 to £3.3m (cash) in FY2025, the

first time the Company has reported a net cash

position but noting the working capital timing

benefit of £4.1m during the year.

A final ordinary dividend of 3.8p per share

(£9.2m) is proposed by the Board, which makes

a total full year ordinary dividend of 5.55p

(£13.5m) an 8% increase compared to 5.15p

in FY2024 (£12.5m). A special dividend of 3.0p

(£7.3m) compared to 2.0p in FY2024 (£4.8m),

is also proposed to be paid alongside the final

ordinary dividend in February 2026 reflecting

the distribution of one-off items received during

the year.

Revenue

Revenue was £1,064.0m (FY2024: £1,103.7m),

down 3.6%, but 1.7% excluding the impact of

the 53rd week in FY2024. Lower newspaper

and magazines volumes were offset by the

benefits of News UK and Midlands News

Association contract wins (Q2 FY2024), cover

price increases, increased sales of trading card

and sticker collectables and increased revenue

from new verticals.

Newspaper revenue decreased by 3.1%

excluding the impact of the 53rd week and

the annualisation of FY2024 contract wins.

Magazine revenue was down 4% excluding the

53rd week. Both newspapers and magazine

revenue decline rates are within our long-term

expectation of -3% to -5%.

Revenue from collectables increased by 17%

excluding the 53rd week, with good Premier

League and Champions League football

collections and the popularity of the current

Pokémon series. The success of these ranges

more than offset the year-on-year impact of the

men’s UEFA European Championships which

benefitted FY2024.

Operating profit

Adjusted operating profit £39.1m was the same

as FY2024 (£39.1m) and included the following

items:

• A 53rd week of trading in FY2024 (£0.9m)

compared to 52 weeks in FY2025

• Improved contribution from sales of

collectable products (£2.5m) and in particular

Pokémon, which included the benefit of £1.2m

of one-off stock sales

• The net benefit of cost reduction plans within

depot and overheads (£4.9m), which largely

offset increases to the cost base driven by

inflation (£4.5m) and the impact of changes to

National Insurance Contributions (£0.5m)

• Additional technology costs (£0.7m)

including license fees for newly implemented

technology

• The impact of other costs (£0.8m) including

£0.4m in trials for new services and products

Profit after tax

Net finance charges of £3.3m (FY2024: £5.9m)

were driven by a lower net debt, lower interest

rates and the write-off of unamortised fees in

FY2024 relating to the previous financing facility.

Taxation of £8.8m (FY2024: £8.5m) was higher

than the prior period due to higher profit before

tax. Profit after tax of £27.0m (FY2024: £24.7m)

was £2.3m higher than last year and has driven

an increase in the ordinary dividend, in line with

the Company’s capital allocation policy.

Strategic Report Governance Financial Statements

Financial Review

Financial Review continued

Table A: Adjusted results

Group

£m

52 weeks to

30 Aug 2025

53 weeks to

31 Aug 2024 Change

52-week

basis

Revenue 1,064.0 1,103.7 (3.6%) (1.7%)

Operating profit 39.1 39.1 - 2.4%

Net finance costs (3.3) (5.9) 44.1%

Profit before tax 35.8 33.2 7.8 %

Taxation (8.8) (8.5) (3.5%)

Effective tax rate 24.6% 25.6% (100bps)

Profit after tax 27.0 24.7 9.3%

Table B: Statutory results

Group

£m

52 weeks to

30 Aug 2025

53 weeks to

31 Aug 2024

52-week

basis

Revenue 1,064.0 1,103.7 (3.6%)

Operating profit 41.2 40.0 3.0%

Net finance costs (3.3) (5.9) 44.1%

Profit before tax 37.9 34.1 11.1%

Taxation (9.6) (8.6) (11.6%)

Effective tax rate 25.3% 25.2% 10bps

Profit attributable to equity shareholders 28.3 25.5 11.0%

Table C: Earnings per share

Adjusted Statutory

52 weeks to

30 Aug 2025

53 weeks to

31 Aug 2024

52 weeks to

30 Aug 2025

52-week

basis

Earnings attributable to

ordinary shareholders

(£m) 27.0 24.7 28.3 25.5

Basic weighted average

number

of shares (millions) 242.4 240.3 242.4 240.3

Basic earnings per share 11.1 10.3 11.7 10.6

Diluted weighted

number of shares

(millions) 250.2 251.1 250.2 251.1

Diluted earnings per

10.8 9.8 11.3 10.2

Table D: Dividends

52 weeks to

30 Aug 2025

53 weeks to

31 Aug 2024

Dividend per share (proposed) 8.55p 7. 15p

Dividend per share (recognised) 7.15p 4.50p

Statutory Revenue

£1,064.0m

(FY24: £1,103.7m)

Adjusted Operating Profit

£39.1m

(FY24: £39.1m)

Adjusted Profit after Tax

£27.0m

(FY24: £24.7m)

Dividend per Share

8.55p

(F Y24: 7.15p)

Smiths News plc Annual Report and Accounts 2025

Table E: Adjusting items

£m

52 weeks to

30 Aug 2025

53 weeks to

31 Aug 2024

Tuffnells (costs)/credits (0.8) 0.2

Technology transformation costs (0.7) (0.1)

Network and reorganisation costs (0.1) (0.1)

Impairment reversal in investment in joint ventures - 0.3

Impairment of receivables – McColl’s 3.7 0.6

Total before tax 2.1 0.9

Taxation (0.8) (0.1)

Total after taxation 1.3 0.8

Table F: Free cash flow

£m

52 weeks to

30 Aug 2025

53 weeks to

31 Aug 2024

Adjusted operating profit 39.1 39.1

Depreciation & amortisation 9.5 8.5

Adjusted EBITDA 48.6 47.6

Working capital movements 4.1 (17.0)

Capital expenditure (4.5) (4.4)

Lease payments (6.5) (5.9)

Net interest and fees (3.2) (5.0)

Taxation (8.8) (8.5)

Other 1.3 0.9

Free cash flow (excluding Adjusting items) 31.0 7.7

Adjusting items (cash effect) 5.1 (0.4)

Free cash flow 36.1 7.3

Table G: Bank net cash/debt

£m

As at

30 Aug 2025

As at

31 Aug 2024

Opening (11.0) (4.2)

36.1 7.3

(17. 4) (10.8)

ree cash flow

Dividend paid

Purchase of shares and cash held by employee benefit trust

(4.4) (3.3)

Closing 3.3 (11.0)

Adjusted Earnings per

11.1p

(FY24: 10.3p)

Average Bank Net Cash/

(Debt)

£3.3m

(FY24: (£11.7m))

Free Cash Flow

£36.1m

(F Y24: £7.3m)

Strategic Report Governance Financial Statements

In the prior period, the Company also reversed

the remaining impairment held on the Rascal

joint venture of £0.3m and released insurance

provisions made following Tuffnells entering

into administration of £0.2m. These credits were

partially offset by £0.1m of reorganisation costs

in relation to simplifying the Group structure

and £0.1m in respect of technology

transformation costs.

Further information on these items can be found

in Note 3 to the Group Financial Statements.

Adjusting items are defined in the Glossary

to the Group Financial Statements and

present a further measure of the Company’s

performance. Excluding these items from profit

metrics provides readers with helpful additional

information on the performance of the business

across periods because it is consistent with how

the business performance is planned by, and

reported to, the Board and the Executive Team.

Alternative Performance Measures (APMs)

should be considered in addition to, and are not

intended to be a substitute for, or superior to,

IFRS measurements.

Free cash flow (Table F)

Free cash flow of £36.1m (FY2024: £7.3m) was

£28.8m higher than last year in part due to the

impact of the 53rd week in FY2024, which was

a net outflow of £15.7m and the benefit of £5.1m

of adjusting items in FY2025 which included

£5.4m of cash received from the McColls

administrator.

There was a working capital inflow of £4.1m

in FY2025 which and an outflow of £17.0m

in FY2024. The FY2025 inflow arose from

increased collectables trading in the second half

of the year, while the FY2024 outflow related to

payments made to publishers in the 53rd week

and part of the Company’s normal working

capital cycle at the end of the calendar month.

Capital expenditure in the period was £4.5m

(FY2024: £4.4m), an increase of £0.1m and

including £1.2m of spend relating to the

Company’s three-year investment programme.

Lease payments of £6.5m (FY2024: £5.9m)

increased by £0.6m, driven by rent renewals.

Net interest and fees of £3.2m (FY2024: £5.0m)

decreased by £1.8m, due to lower net debt.

Cash tax outflow of £8.8m (FY2024: £8.5m) was

an increase on the prior period of £0.3m, owing

to higher levels of profit.

Other items include non-cash share-based

payment expense.

The total cash impact of other Adjusting items

was a net inflow of £5.1m (FY2024: outflow of

£0.4m).

In the current period, there were two significant

inflows; £5.4m was received from the McColls

administrators, and a £1.5m tax refund in

respect of the return of surplus of the Smiths

News pension scheme which occurred in

FY2022. Offsetting these items were £0.8m of

professional fees in respect of the Pensions

Regulator’s investigation into the Tuffnells

pension scheme, £0.7m relating to technology

investments, £0.2m settlement of Tuffnells

insurance claims and reorganisation costs

of £0.1m.

In the prior period, the outflow of £0.4m resulted

from the £0.2m settlement of Tuffnells insurance

claims, technology investment of £0.1m, and

reorganisation costs of £0.1m.

A reconciliation of free cash flow to the net

movement in cash and cash equivalents is given

in the Glossary.

Net cash/debt (Table G)

Bank net cash closed the year at £3.3m

compared to Bank net debt of £11.0m at 31

August 2024, an improvement of £14.3m.

Average daily bank net debt moved from

£11.7m (net debt) in the prior period to average

Bank net cash of £3.3m in the current period,

reflecting good ongoing cash generation and

benefitting from increased collectables trading

within the working capital cycle.

Total dividends paid during the year amounted

to £17.4m (FY2024: £10.8m), an increase of

£6.6m. The FY2024 final ordinary dividend of

£8.3m was paid in February 2025 (FY2024:

£6.7m), alongside a special dividend of £4.9m,

bringing the total dividend paid in respect of

FY2024 to £17.4m. The Company also paid an

interim ordinary dividend in July 2025 of £4.2m

(FY2024: £4.2m).

Reported net debt is impacted by the timing

of the Company’s working capital cycle. The

intra-month working capital cash flow cycle

generates a routine and predictable cash

swing within the overall bank facility of £40.0m

(FY2024: £40.0m) at the period end. This

results in a predictable fluctuation of net debt

during the month compared to the closing

net debt position.

The Company’s Bank net cash: Bank EBITDA

ratio improved to -0.1x (FY2024: Debt ratio

of +0.3x) which is within our main leverage

covenant ratio of +2.5x. We remain within all

our other bank covenant tests at period end.

A reconciliation of Bank net debt (which

excludes IFRS 16 lease liabilities and

unamortised arrangement fees) to the balance

sheet and Bank EBITDA (which uses

pre-IFRS16 lease accounting) to the profit

and loss account is provided in the Glossary.

Statutory results Group (Table B)

Statutory profit after tax of £28.3m was a £2.8m

increase on the prior year (FY2024: £25.5m),

resulting from the £2.3m increase in Adjusted

profit after tax described above and a £0.5m

higher benefit from adjusting items (FY2025

£1.3m credit; FY2024: £0.8m credit).

Earnings per share (Table C)

Adjusted basic earnings per share of 11.1p, was

an increase of 0.8p on the prior year driven by

the increase in earnings of the business, offset

by an increase in the average number of shares

as a result of the employee benefit trust holding

fewer shares.

Statutory basic earnings per share increased by

1.1p to 11.7p (FY2024: 10.6p) due to the benefit

of adjusting items.

Dividends (Table D)

The Board is proposing a final ordinary

dividend of 3.80p per share (FY2024: 3.40p

per share). The proposed final dividend is

subject to approval by shareholders at the

Annual General Meeting on 29 January 2026

and has not been included as a liability in

these accounts. The Board is also proposing

a special dividend of 3.0p per share. These

dividend recommendations follow the capital

allocation policy which was revised following

the Company’s refinancing in May 2024.

The proposed dividends will each be paid on 5

February 2026 to shareholders on the register

at close of business on 9 January 2026. The ex-

dividend date will be 8 January 2026.

Adjusting items (Table E)

Adjusting items after tax was a net credit of

£1.3m, compared to a net credit of £0.8m in

the prior year period, both periods including a

release of the provision for McColls receivables

originally made in FY2022.

Tuffnells costs of £0.8m arose from professional

fees incurred in responding to information

requests from the Pensions Regulator in

respect of its investigation into the Tuffnells

defined benefit pension scheme (£0.7m), and

an increase in provisions to settle insurance

claims (£0.1m). Technology transformation

costs of £0.7m related to enhancements made

to technology infrastructure, and £0.1m of costs

arose from simplifying the Group structure. The

Company also recognised a £3.7m impairment

reversal of the provision for McColl’s receivables

following final recoveries from the administrator.

In total, the Company received £5.4m from

the administrator, being 98% of the £5.5m

receivable which was owing at the point of

McColls administration. Of the initial provision

of £4.4m, £4.3m has therefore been released

(£0.6m in FY2024 and £3.7m in FY2025).

Financial Review continued

Smiths News plc Annual Report and Accounts 2025

1. How the Group assesses its

prospects

The Group’s business activities and strategy

are central to assessing its future prospects.

These, together with factors likely to affect its

future development, performance and position,

are set out in the Strategic Report on pages 02

to 73. The financial position of the Group, its

cash flows and liquidity are highlighted in the

Financial Review on page 61.

The Group manages its financing via

drawdowns from a revolving credit facility.

The Group’s prospects are assessed primarily

through its business planning process. This

includes an annual review which considers

profitability, the Group’s cash flows, committed

funding and liquidity positions and forecast

future funding requirements over the

assessment period of three years. The most

recent review was approved in September 2025,

and it is part of the Board’s role to consider the

appropriateness of any key assumptions, taking

into account the external environment, current

inflationary pressures in the economy and

business strategy.

2. The assessment period

The Directors have determined that a period of

three years to August 2028 is an appropriate

assessment period over which to provide its

viability statement. This period is consistent with

that used for the Group’s corporate planning

process as detailed above and reflects the

Directors’ best estimate of the future prospects

of the business, including the nature and

potential impact of the principal and emerging

risks that face the business.

The Board noted in considering the appropriate

assessment period that the Group’s banking

facilities are due to expire in May 2028 with

the option of a further one-year extension

and that publisher contracts covering 93%

of current revenue are secured until 2029.

The Board also considered whether there are

any specific foreseeable events relating to the

principal and emerging risks that could occur

beyond this three-year period which should

be taken into account when setting the three-

year assessment period and concluded there

were none.

3. Assessment of viability

In generating its plan, the Board has considered

the overall strategy of the Group, the principal

and emerging risks and uncertainties inherent

within the business, as well as making a number

of key strategic planning assumptions which are

noted below:

1. Continued decline in volumes of printed

media during the assessment period offset

by price increases;

2. The impact of inflationary pressures in the

economy, including fuel and energy prices

and their impact on the Company’s delivery

and warehouse cost base;

3. The benefit of cost reduction programmes

in delivery and warehouse costs and in

overheads;

4. The continuing development of new and

ancillary revenues;

5. No major changes in working capital profile;

6. No significant acquisitions or disposals in

the assessment period; and

7. Application of the Company’s current

capital allocation policy.

In making this statement, the Directors have

carried out a robust assessment of the Group’s

emerging and principal risks, including those

that could threaten its business model, future

performance, solvency or liquidity, and also

considered the potential impacts of climate

change. Consideration has been given to the

availability and effectiveness of mitigating

actions that could realistically be taken to

avoid or reduce the impact or occurrence of

the underlying risks. In assessing the likely

effectiveness of such actions, the Board

considered the conclusions from its regular

review of risk management and internal control

systems (as described on page 92).

To make the assessment of viability, ’stress’

scenarios have been tested over and above

those in the Board’s business plans, based upon

a number of the Group’s principal and emerging

risks and uncertainties (as documented on

page 67). The scenarios were overlaid into the

business plan to quantify the potential impact

of one or more of these crystallising over the

assessment period. Whilst each of the principal

and emerging risks on page 67 has a potential

impact and has been considered as part of the

assessment, only those that represent severe

but plausible scenarios were selected for

modelling through the business plan. These

are shown in the table below.

The scenarios below are hypothetical and

severe for the purpose of creating outcomes

that have the ability to threaten the viability of

the Group; however, multiple control measures

are in place to prevent and mitigate any such

occurrences from taking place.

In each of the stress scenarios 1-5, the Group

would be able to continue operating within its

existing debt covenants and liquidity headroom.

Scenario 6 requires such an extreme set of

factors in unison that it is considered to be

a remote likelihood and, therefore, does not

represent a realistic threat to the viability of the

Group but, rather, illustrates the factors that

could result in a covenant or liquidity breach.

The Directors considered mitigating factors

that could be deployed to counter the negative

effects of the crystallisation of each of these

scenarios and risks. The main actions that

could be taken in such circumstances include

reducing any non-essential capital expenditure

and operating expenditure on projects, working

capital management to smooth debt peaks

(including supplier finance arrangements),

increasing the principal facility amount by

exercising the £10m accordion option in the

RCF Facility, cancelling discretionary annual

bonus payments, share schemes vestings and

EBT purchases, identifying other cost savings,

as well as not paying dividends.

Strategic Report Governance Financial Statements

Viability Statement

Scenario modelled Link to principal risks

Scenario 1

Changes to retailers’ commercial environment

The business plan assumes all major retailers

will continue to stock their current newspaper

and magazine range over the assessment

period. We have modelled a scenario that

reflects one or more supermarket multiples

removing their magazine offering.

Risk 2: Macroeconomic uncertainty and

Risk 3: Changes to retailers’ commercial

environment:

Deterioration in the macroeconomic

environment and the risk of a reduction in sales

space and/or full delisting of newspapers and/

or magazines by our largest retailers.

Scenario 2

New vertical initiatives are not executed successfully

The business plan assumes profit from

strategic growth and diversification activities

within the next three years. We have modelled

a scenario in which only 50% of these targets

are met.

Risk 2: Macroeconomic uncertainty and

Risk 5: Execution risk within the three growth

verticals :

Deterioration in the macroeconomic

environment and/or the failure of the news

wholesaling operations to deliver profit

expectations impacts the Company’s ability

to execute growth initiatives.

Scenario 3

Forecast savings targets are not met

The business plan assumes both operational

and overhead savings throughout the period in

Smiths News. We have assumed 33% of these

efficiency savings are not achieved.

Risk 2: Macroeconomic uncertainty

Risk 4: Acquisition and retention of labour and

Risk 5: Execution risk within the three growth

verticals:

The risk that inflationary cost increases, the

absence of managerial talent and resources

used for new business growth opportunities

detrimentally affect the execution of planned

cost reduction.

Scenario 4

Increased number of congestion charge zones

The business plan assumes that new

congestion charge zones are implemented

at their historic frequency and impact. We

have modelled an accelerated frequency and

increased fiscal impact.

Risk 6: Sustainability and climate change:

The risk that increasingly stringent air quality

targets make it more costly for the Company

to undertake newspaper and magazine

wholesaling activities and growth initiatives.

Scenario 5

Major newspaper titles exit the market

The business plan assumes all major

newspaper titles will continue over the

assessment period. We have modelled a

scenario that reflects one or more newspapers

publishers removing their paper edition from

the market.

Risk 2: Macroeconomic uncertainty

Risk 7: Major newspaper titles exit the market

or move to digital only editions:

One or more national newspaper titles exit

the market and/or publications are taken

fully digital, leading to a deterioration in the

Company’s profitability.

Scenario 6

Reverse stress test – revenue loss, margin erosion and cost inflation in combination to create

either a headroom liquidity or covenant breach

This combines an extreme series of factors

in unison to illustrate what would result in a

covenant or liquidity breach of the bank facility

headroom.

Multiple risks: A combination of risks,

also including those relating to Cyber Security

(risk 1) and Legal and Regulatory Compliance

(risk 8), both of which are inherently uncertain

in value.

4. Viability statement

In light of the scenario modelling noted above,

the Directors are confident that headroom

under the Group’s banking facilities remains

adequate and covenant tests can be met during

the assessment period. As noted above, in

making this viability statement the Directors

have also considered an alternative view by

applying a reverse stress test to the Group’s

financial models. A reverse stress test is where

scenarios are considered that lead to a breach

of either the total available facility or one or

more of the covenants. The Directors consider

that the risk of the combination of events

leading to such breaches combined with the

Group not being able to enact mitigating actions

is remote.

Taking into account the Group’s current position

and principal risks and emerging risks, the

Directors confirm that they have a reasonable

expectation that the Group will remain viable

over the period of assessment to August 2028.

5. Going concern

The Group meets its day-to-day working capital

requirements through its bank facilities of £40m,

which is in place until 2 May 2028 with the

option of a further one-year extension.

The Group’s forecasts, taking into account

the Board’s future expectations of the Group’s

performance, indicate that there is sufficient

headroom within the current banking facilities

and the Group will be able to continue to

operate within the covenants during the

assessment period.

Considering the principal and emerging risks

discussed in this report, the Directors have a

reasonable expectation that the Group and the

Company can meet its liabilities as they fall due

for a period greater than 12 months (being an

assessment period of 16 months) from the date

of approval of the Group Financial Statements.

Thus, the Group and the Company continue to

adopt the going concern basis in preparing its

consolidated financial statements which are

shown on pages 138 to 169.

Viability Statement continued

Smiths News plc Annual Report and Accounts 2025

Risk Management

The Board, in combination with

the Audit Committee, conducts

a biannual assessment of the

Company’s principal and emerging

risks, together with reviewing

the effectiveness of the systems

and controls which are in place to

manage and mitigate these risks

within the established risk appetite

levels established.

The Audit Committee assists the Board in

the discharge of its duties regarding the

Company’s maintenance of proper systems of

risk management and control. Assurance over

the effectiveness of these systems is provided

through regular management reporting to the

Audit Committee. We have an established risk

management process to identify both risks

and opportunities through a bottom-up/top-

down approach. This includes a combination

of processes encompassing an analysis of

trends, engagement with key stakeholders,

benchmarking with peers, brainstorming,

comparison against standard risk checklists,

‘cause and effect’ analysis, review of processes

and procedures, and the robust maintenance

of our developed risk management framework

and registers. The risk management process

mirrors the Company’s operating structure, with

each functional area being responsible for the

ongoing communication and feedback of their

existing and emerging risks.

This process comprises the identification,

assessment and effective mitigation of

their functional risks, as well as continuous

monitoring for forthcoming changes and/or

impactful regulatory updates on the horizon.

Risks are plotted on risk maps with descriptions,

owners and mitigating actions using a risk

rating matrix which takes into consideration

both the likelihood of the risk event occurring

and the magnitude of the impact in the event

that the risk event occurs. The final risk rating

matrix used to identify principal risks is based

on the residual risk that the Company faces

after taking into consideration the internal

control environment and related mitigating

actions and controls. These risk maps are

reviewed and challenged by the Executive

Team and Audit Committee and reconciled

against the Company’s risk appetite. As part

of the regular principal risk process, a review

of emerging risks (internal and external) is

also conducted, and a list of emerging risks

is maintained and rolled-forward to future

discussions by the Executive Team and Audit

Committee. Where appropriate, these emerging

risks may be brought into the principal risk

registers. Additional risk management support

is provided by external experts in areas of

technical complexity to complete our bottom-up

and top-down exercises.

The Company manages risk by operating a "three lines of defence" risk, control and assurance model.

Operational Management

Management / Subject matter

experts review and assurance Independent assurance

• Key policies and procedures covering the principal areas

of business conduct are approved by the Board and each

business function is required to adhere to these policies.

• Management is responsible for regularly reviewing

its functional operating, financial and sustainability

performance and for preparing and reviewing monthly

reports as appropriate.

• All managers are required to complete an annual internal

control assessment and provide written confirmation of

compliance with Company policies and procedures. This

formal confirmation highlights any control weaknesses or

deficiencies identified.

• Management is responsible for regularly

reviewing the operating, financial and

sustainability performance, including

monthly management accounts.

• Management is responsible for a detailed

assessment of current market conditions.

• All significant functional processes have

Board-approved policies in place against

which conduct and performance are

regularly assessed and measured.

• Internal and external audit.

• Regular reviews and vetting

by external regulatory and

non-regulatory parties, as

required – e.g. ISO certification,

annual insurance assessments,

sustainable development report

assurance and information

security programmes.

Strategic Report Governance Financial Statements

Board

Overall responsibility

for Company strategy

and risk management

Approves risk

framework

Determines risk

appetite in line with

strategy

Monitors and reviews

health and safety risks

Executive Team

Formulates risk management

policies in terms of the approved

risk management framework, to

ensure risks are managed within

accepted tolerance levels

Responsible for oversight of

adherence to the Company’s

policies, procedures and

controls and the facilitation

of the implementation of risk

management practices

Assesses and monitors

risks on an ongoing basis

Business Functions

Hold the ownership, responsibility and accountability for assessing and mitigating risks

as well as implementing risk management policies and procedures

External Audit

Provides external assurance

through processes designed

to detect material errors

and material irregularities

that impact the financial

statements

Internal Audit

Internal audit function

reports directly to the Audit

Committee and is mandated

to perform Company-wide

reviews of key processes,

projects, systems and

controls based on the

Company’s strategy and

principal risks

Risks are classified by impact and likelihood, a description of which

is as follows:

Likelihood:

Description %

Highly likely Event will probably occur in most

circumstances

>70 %

Likely Event will occur at some point 30-70%

Possible Event could occur 10% to 30%

Unlikely Event may occur in exceptional

circumstances

<10%

Operational Management Management / Subject matter experts

review and assurance

Independent assurance

• Key policies and procedures covering the principal areas of business

conduct are approved by the Board and each business function is

required to adhere to these policies.

• Management is responsible for regularly reviewing its functional

operating, financial and sustainability performance and for preparing

and reviewing monthly reports as appropriate.

• All managers are required to complete an annual internal control

assessment and provide written confirmation of compliance with

Company policies and procedures. This formal confirmation highlights

any control weaknesses or deficiencies identified.

• Management is responsible for regularly

reviewing the operating, financial and

sustainability performance, including

monthly management accounts.

• Management is responsible for a

detailed assessment of current market

conditions.

• All significant functional processes have

Board-approved policies in place against

which conduct and performance are

regularly assessed and measured.

• Internal and external audit.

• Regular reviews and vetting

by external regulatory

and non-regulatory

parties, as required – e.g.

ISO certification, annual

insurance assessments,

sustainable development

report assurance and

information security

programmes.

Sustainability

Committee

Monitors and reviews

material environmental

and other sustainable

development risks, including

climate change risks and

opportunities

Audit Committee

Reviews and

monitors the

adequacy and

effectiveness of

the Company’s

internal control and

risk management

processes

Ongoing review

of the principal

risks through the

course of the year

Approves the

annual internal

audit workplan

Impact:

The impact of an identified risk is rated as critical, serious, moderate or

minor, with defined criteria for each rating across financial, commercial,

operational, technical services, health and safety, people and

legal/regulatory categories.

Risk management is embedded in all decision-making processes and

captured in our policies, procedures and delegated authorities, with

ongoing review by the Board and risk assessments forming part of all

initiatives in new verticals.

Risk management is embedded in all decision-making processes and captured

in our policies, procedures and delegated authorities, with ongoing review by

the Board and risk assessments forming part of all growth initiatives.

Smiths News plc Annual Report and Accounts 2025

Risk Management continued

Internal Controls

The Audit Committee reviews the business’s

risk management and internal controls

framework, which includes the accepted three

lines of defence referred to on page 67, with

day-to-day business, operational and control

processes falling within the responsibility of

operational management (who constitute the

first line of defence). Executive management

and subject matter experts provide policy

direction and oversight of operations (thereby

representing the second line of defence). Finally,

both the internal and external audit functions

undertake a review of the effectiveness of the

business’s control functions and provide the

third assurance level in respect of Company

disclosures and upon which the Audit

Committee and Board can rely. As such, the

Audit Committee receives updates of the

findings of Internal Audit’s investigations at

every meeting. Whilst it is the responsibility of

functional team leaders to assess and confirm

(as first and second lines of defence) that

controls and processes are being adhered to,

these outputs are continually tested by the

Internal Audit team as part of its annual work

plan, which is agreed with the Audit Committee

and upon which it relies. Compliance with

internal control systems is also further

monitored annually by the completion of a

self-assessment checklist by senior managers

in consultation with their respective operational

teams and this (together with any areas of

concern) is reported to the Audit Committee.

Furthermore, the Audit Committee’s review

of the risk management and internal controls

framework include:

• a review of the risk profile, our collective

appetite to risk and the internal control

framework, reviewing the processes for

identifying, evaluating and managing the

principal business risks (together with the

emerging risks) that we face, including those

that would threaten the Company’s business

model, future performance, solvency or

liquidity;

• the consideration of updates from the

business and functions, covering current and

anticipated risks, together with corresponding

mitigating actions. These include such issues

as people management, operational depot

processes, procure to pay, payroll services,

cyber security, climate-related risk events,

and the impact of the current high-inflationary

economic pressures;

• a review of operational controls, processes

and systems, together with robust business

continuity planning (“BCP”) to mitigate a

range of service interruption scenarios;

• a review of payroll controls to ensure that they

are robust and remain fit for purpose going

forward;

• a review of the Company’s whistleblowing

processes and procedures;

• consideration of the cash management and

treasury policy, with particular focus on a

review of surplus cash held from time to time;

and

• a review of the mitigations and controls

in place to protect the business and the

continued oversight of the effectiveness of our

cyber-risk management plans.

That said, the Company’s risk management

and internal control system is designed only to

manage or mitigate risk rather than to eliminate

it entirely, as taking on manageable net risk is

an inherent part of undertaking the Company’s

commercial activities and can only provide

reasonable (and not absolute) assurance

against material misstatement or loss.

Risk Appetite

A critical element of the Company’s risk

management review is the determination of

the extent to which the Company is willing to

‘accept’ a level of net risk as part of the cost

of ‘doing business’ and delivering against its

strategy. To this end, the Board’s individual and

collective risk appetite is periodically reviewed,

considering changes in the business and the

external environment, as well as emerging

trends and developing risks. Our risk appetite

differs across the respective principal and

emerging risks, with a lower acceptance

appetite (seeking to reduce the risk profile and

mitigating its impact where possible) for high

impact/high likelihood risks and with a higher

acceptance level (potentially accepting the risk,

with limited impact mitigation) for low impact/

low likelihood risks.

Principal Risks

During FY2025 the Board and Audit Committee

each continued to undertake an ongoing

assessment of the principal and emerging risks,

the Board having considered the performance

of the business, its markets, the changing

regulatory and macroeconomic landscape,

the Company’s future strategic direction and

ambition as well as the heightened climate-

related risk environment. In addition, in

evaluating the Company’s risk management

and internal control processes, the Audit

Committee has considered both internal and

external audit reports and received confirmation

from management that the Company’s control

frameworks have operated satisfactorily. The

sustainable development risks considered

throughout our business have been reviewed by

the Sustainability Committee. The Directors are

therefore of the view that they have carried out a

robust assessment of the Company’s emerging

and principal risks, including those that could

threaten its business model, future performance,

solvency or liquidity.

Emerging Risks

Emerging risks are identified as either a new

or previously unforeseen risk that we are now

adding to our risk registers or a risk that was

already on our radar and which has the potential

to become a principal risk.

Most risks identified as emerging are already

reflected on our functional risk registers with a

current risk rating of ‘serious likelihood’ or above.

The Board has noted that in the execution of

its growth and diversification strategy, new

emerging risks have been identified. These

emerging risks are managed through mitigating

activities, such that the residual risk exposure

is not considered significant. All new initiatives

are planned in detail, with contingency and BCP

plans in place and ongoing reviews conducted

to evaluate the project execution against the

original plan and to identify lessons learnt. We

will continue to monitor potential risks relating

to our growth and diversification strategy in the

year ahead.

Key Changes in the Year

In line with our usual procedures, a refresh of

the Company’s principal and emerging risks

was conducted at the half and full year, taking

into account changes in our business practices,

our industry sector, the development of our

three growth verticals and any other market

changes across our business and industry

sector, together with the increasing relevance

of climate-related risks and cyber security

incidents across all sectors and industries

(in relation to the former, considering both

transitional and physical-related risks to both

our business and through our supply chain).

This broad review was conducted through

discussion with a cross-section of the Executive

Leadership Team, senior management and

the Audit Committee, who were each asked

to consider the key risks (both in place and

emerging) and the challenges facing the

business (by reference to the existing principal

risks), our current activities and controls that

help address these risks, and future actions

that may be taken to further mitigate these

risks (where appropriate). The opportunity to

review and refresh the Company’s principal

and emerging risks has resulted in all but

one of our identified principal risks remaining

stable, with a reduction in the acquisition and

retention of labour risk in light of vacancies

(internally and amongst the outsourced final

mile delivery contractors) having stabilised at

a consistently lower level each month and our

colleague turnover comparing favourably versus

our sector. Following this review, there remains

a general alignment around the nature of risks,

the risk ownership, the direction of travel, any

mitigation actions to reduce the gross risk, and

acceptance of remaining net risk.

Furthermore, in line with TCFD requirements,

during this review process the Board has also

continued to interrogate the nature of climate-

related risks identified by management to date,

with a number of transitional and physical-

related risks having been identified using a

scenario analysis (further details of which are

set out in the Sustainability Report on page 42)

which are primarily focused on the business’s

direct operations.

Strategic Report Governance Financial Statements

The Board acknowledges that the risk profile of

these climate-related risks may well evolve over

time as we continue engagement with our key

suppliers, customers and stakeholders across

our supply chain and particularly after affording

an opportunity to more fully consider the impact

of these on our business and, more specifically,

on and the wider industry sector. However,

as part of this oversight process, the Board

considered whether the previously established

climate-related risks identified in the prior risk

management assessment should remain as a

principal risk or not.

Following a period of review, it was concluded

that the risk should remain of a principal nature

given that, should it ever manifest, it could have

a serious impact on the Company. In addition,

we continue to include related risks across all

our sustainability pillars – for these purposes

please refer to our Sustainability Report on page

42. While our climate-related and sustainability

risks have remained consistent we have seen

some changes in both the likelihood and impact

of some of these, primarily because of the

embedding of some of our mitigation actions

but also because of the changing landscape

in relation to some aspects such as the risk of

availability of fuel.

More information in this regard is available in

our Sustainability Report on page 42.

In light of the above, we have therefore been

able to maintain a stable number of principal

risks but with a reduction in the number of

emerging risks identified by the Board given

that those events previously identified as

emerging were, in fact, already broadly under

review either as part of another principal or

emerging risk. The table below details each

principal business risk, those aspects that

would be impacted were the risk to materialise,

our assessment of the current status of the risk,

and how each is mitigated.

Key



Increasing



Stable



Decreasing

Principal risks and potential impact Mitigations Strategic link/change

1. Cyber security

Global trends demonstrate a continued high

volume of cyber-attacks against all industry

sectors and that cyber threats continue to

indiscriminately evolve.

To meet the needs of our stakeholders, our IT

infrastructure and data processes need to be

flexible, reliable and secure from cyber-attacks.

Secure infrastructure acts as a deterrent to, and

helps prevent and/or mitigate the impact of,

external cyber-attack, internal threat or supplier-

related breach, which could cause service

interruption and/or the loss of Company and

customer data.

Cyber incidents could lead to major adverse

customer, financial, reputational and regulatory

impacts.

• Defined risk-based approach to the information security

roadmap and technology strategy which is aligned to the

strategic plans.

• Regular tracking of key programmes against spend

targets and delivery dates.

• The Company assesses cyber risk on a day-to-day

basis, using proactive and reactive information security

controls to detect and mitigate common threats.

• Dedicated investments in information security and

access to third-party cyber security specialists, including

24/7 security monitoring, incident response and

specialist testing.

• The Company encourages a cyber-aware culture

by undertaking exercises, such as computer-based

training and simulated phishing attacks and regular

communications about specific cyber threats.

• All functions that place reliance on business systems

have established business continuity plans that set out

how to conduct key activities if a system interruption

takes place due to a disruptive event such as a

cyber-attack.

Strategic link

Technology

Change



Despite ongoing investment and

enhancements in the Company’s

IT infrastructure and IT security

the backdrop remains heightened,

leading to a stable risk assessment.

2. Macroeconomic uncertainty

Deterioration in the macroeconomic environment

could result in supply-side cost inflation and/or a

reduction in demand-side sales volumes.

Supply-side macroeconomic pressures could

present the Company with additional cost

challenges, e.g. increased competition in the

distribution labour market and/or rises in fuel

and utility prices. Adverse changes to economic

conditions could result in reduced consumer

demand for newspapers and magazines and/or

reduction in titles/editions. These cost increases

and sales pressures present a risk when they

cannot be fully mitigated through increased

prices or other productivity gains.

This could result in deterioration in the level of

profitability in both the short and medium term

and impacts on the Company’s ability to execute

its strategies, including level of debt and liquidity

objectives.

• Annual budgets and forecasts take into account

the current macro-economic environment to set

expectations internally and externally, allowing for or

changing objectives to meet short- and medium-term

financial targets.

• Weekly cost monitoring enables oversight and action on

a timely basis.

• Cover price increases in magazine and newspaper

titles provide some offset against the impact of volume

decline.

• Predictable level of volume decline within the core

business enables cost optimisation planning.

• Use of fixed-term contracts as a hedge against

rapidly rising prices e.g. energy costs.

• The Company continues to be significantly cash

generating to support its strategic priorities.

Strategic link

Costs and efficiencies, Operations

Change



Whilst the UK economy has grown

in 2025, inflation remains above

the Bank of England’s target range.

Increases in the National Living

Wage continue to match or exceed

inflation. Employers’ national

insurance contributions increased

in April 2025 and have added to

the Company’s cost base. The

tightening of standards pursuant

to the Employment Rights Bill is

expected to create further cost

pressures.

Smiths News plc Annual Report and Accounts 2025

Risk Management continued

Principal risks and potential impact Mitigations Strategic link/change

3. Changes to retailers’ commercial environment

Our largest retailers (e.g. grocers and symbol

group members) remain under significant

pressure to maximise sales and profitability

by channel within their retail stores and at

associated sale outlets, such as at petrol

forecourt stores. This could result at any time in a

category review of the newspaper

and/or magazine channel, leading to a significant

reduction in newspapers’ and/or magazines’

selling space-in-store (or its location) in favour

of other higher margin products and/or the

delisting of all/particular titles of newspapers

and/or magazines.

A reduction in (or change in location of) sales

space and/or full delisting of newspapers

and/or magazines by our largest retailers (or a

high number of other retailers) could materially

reduce the Company’s revenue, profitability

and cash flow.

• Our EPoS-based returns (EBR) solution has been

introduced in-store with our largest retailers, improving

staff efficiency in managing the magazine category,

thereby reducing cost to the retailer.

• Potential to extend EBR to newspapers in order to

broaden efficiency-benefits to retailers.

• Supply-side shrink activities underway and renewed

focus improve channel profitability and reduce

complexity associated with the category.

• Form stronger partnerships with emerging retailers to

stock magazines and newspapers.

• Expand retail offering to include single copy digital

downloads of newspapers and/or magazines to

supplement physical print and category range in-store.

Strategic link:

Costs and efficiencies

Change



4. Acquisition and retention of labour

Due to competition and constraints in the current

distribution labour market, this could lead to an

increased risk of being unable to recruit and/or

retain warehouse colleagues and support staff.

The same pressures are also being felt in

sourcing and retaining delivery sub-contractors

as well as filling in-house roles within our central

support functions.

A failure to maintain an appropriate level of

resourcing could result in increased costs,

employee disengagement and/or loss of

management focus which underpin our ability

to address the strategic priorities and to deliver

forecasted performance.

• We seek to offer market competitive terms to ensure

talent remains engaged.

• We offer long-term contracts with our sub-contracted

delivery partners.

• We use a variety of platforms to recruit employees

and contractors.

• The level of vacancies across warehouse and delivery

contractors is monitored daily.

• We undertake workforce planning; performance, talent

and succession initiatives; learning and development

programmes; and promote the Company’s culture and

core values.

• Retention plans are reviewed to address key risk areas,

and attrition across the business is regularly monitored.

• Regular surveys are undertaken to monitor the

engagement of colleagues.

Strategic link

People first, Culture and values,

Costs and efficiencies

Change



Vacancies have stabilised at a

consistently lower level each

month and our colleague turnover

compares favourably with our

sector. Retention challenges

remain for specific job roles which

are managed through agile and

bespoke responses.

5. Growth and diversification within the three growth verticals

A successful growth and diversification strategy

is essential to the long-term success of the

Company.

Implementing new business opportunities in

order to grow the Company’s revenue and profit

streams carries an execution risk to achieving

our vision and purpose.

• Strong project management and governance in

place to sign-off new vertical activities and oversee

their implementation.

• A Growth Business Development Group and Growth

Operations Delivery Steering Committee have been

established to review and control new business

opportunities and then plan and measure the impact

of these opportunities on core operations.

• Experimentation through trials of new business

opportunities has been deployed to assess the demand

and potential economic benefit of such opportunities.

• The Executive Leadership Team’s balanced scorecard

of key performance indicators ensures sub-optimal

performance is tracked and monitored on a regular

basis and allows appropriate interventions to be made.

Strategic link

Costs and efficiencies

Change



Our growth verticals' initiatives

are expected to become a more

significant part of our business over

time, leading to space and capacity

constraints at both our sites and in

our vehicles potentially increasing.

In addition, layering in of change

projects such as our investment

in a Warehouse Management

System, and the Operational

Excellence programme may create

management bandwidth and

operational pressure pressures in

the short-term before improvements

become evident.

Strategic Report Governance Financial Statements

Principal risks and potential impact Mitigations Strategic link/change

6. Sustainability and climate change

– for details of all Sustainability and climate-related risks please refer also to the Sustainability Report on page 42.

Our sustainability linked risks extend beyond

the physical and transitional risks associated

with climate change which we have previously

identified, such as a scarcity of resources,

extreme weather events, power outages,

increasing regulation and associated cost

in response to a drive to ‘net zero’ carbon

emissions, and the increasingly stringent air

quality emission zones. Regulatory requirements

and reporting obligations on environmental,

social and governance (ESG) matters are

increasing and ongoing investment is required

to maintain a safe working environment and to

protect the Company from cyber-attacks, as well

as making progress in delivering on our diversity

and inclusion ambitions. In common with all

major organisations, there is a risk of reputational

damage and/or loss of revenue if the Company

fails to meet stakeholder expectations across our

sustainability framework.

• Board Sustainability Committee established

(Chaired by the Chief Financial Officer) to consider

and determine the Company’s sustainability strategy and

progress, together with risk environment and activities

and actions.

• Dedicated management Sustainability Steering

Committee established (also chaired by the Chief

Financial Officer) coordinates the Company’s

day-to-day activities and actions in delivering the

Company’s sustainability strategy, including in relation to

climate change.

• Working with suppliers to ensure they share the

Company’s vision to act on sustainability and climate

change.

• Emissions and air quality targets in UK towns and cities

are monitored by a central team in the Operations

function which ensures the Company can fulfil its

obligations to customers and remain compliant with

legal requirements.

• Operational sites are reviewed for their resilience to

extreme weather events, such as flooding, with upgrades

and interventions made where these are

cost-effective. Depots are relocated to new sites (e.g.

during lease break windows) where this represents

a better option than adapting an existing location.

Strategic link:

Cost and efficiencies, Operations,

Sustainability

Change



7. Major newspaper titles exit the market or move to digital only editions

Significant decline in advertising and/or

circulation, together with rising production costs,

could lead to one or more national newspaper

titles exiting the market and/or publications

being taken fully digital. This could lead to

a significant deterioration in the Company’s

profitability and cash flow in both the short and

medium term as well as impacting on its ability

to execute its strategies.

• We seek to ensure full availability of alternative

newspaper titles to maximise substitution opportunities

for customers.

• Partial mitigation against newspaper title closures

is built into our contracts with major publishers.

• Ongoing successful execution of our growth and

diversification strategy provides longer-term mitigation

through alternative profitable revenue streams.

Strategic link

Costs and efficiencies

Change



8. Legal and regulatory compliance

The Company is required to be compliant with

all applicable laws and regulations. Failure to

adhere to these could result in financial penalties,

third party redress, and/or reputational damage.

Key areas of legal and regulatory compliance

include:

• GDPR

• Health and Safety

• Tax compliance

• Environmental legislation

• Employment law

• Changes in laws and regulations are monitored, with

policies and procedures being updated as required.

• Business-wide mandatory training programmes for

higher-risk regulatory areas.

• External experts are used where applicable.

• All major policies are reviewed by the Board or

Audit Committee on an annual basis.

• Operational auditing and monitoring systems for

higher risk areas.

Strategic link

Technology, Sustainability,

Operations

Change



The Audit Committee believes that it has been able to respond quickly and efficiently to the ever-evolving risk environment that the business regularly

faces head on and have deployed effective risk management processes across the Company. Accordingly, the Audit Committee is satisfied (on behalf

of the Board) that it has carried out a robust assessment of the principal and emerging risks that the Company faces (within the scope of the Board’s

risk appetite) as required by the 2018 edition of the UK Corporate Governance Code.

Smiths News plc Annual Report and Accounts 2025

Risk Management continued

Sustainability Risks

Increase in extreme

weather events

Decreasing fuel availability and/or

increasing fuel prices

Impact of extension

of low emission zones

Potential for energy supply

limitation/ blackouts

Increasing regulatory

requirements

Using our enterprise

risk management

system, we

consider risks

and opportunities

associated

with all of our

Sustainability pillars.

For more Information on our

Sustainability Report on page 57

Strategic Report Governance Financial Statements

Dear Shareholder

This section of our Annual Report supplements

my opening Chairman’s statement (see pages

12 and 13) and provides more specific details in

respect of the Company’s corporate governance

overview, framework and approach.

Our governance framework, vision and culture

provide the necessary foundation to enable

the Company to achieve our strategy and

purpose and, in doing so, provides assurance

to our stakeholders of our commitment to

accountability, transparency and responsibility.

Accordingly, whilst much of the focus of the

Board during FY2025 has revolved around our

endeavours to maximise shareholder value and

to ensure the long-term sustainable success

of the Company which seeks to leverage our

core competencies, skills and capabilities in

‘pick, pack and despatch’ activities across early

morning final mile distribution and reverse

logistics operations – these strategic priorities

have been underpinned by our governance

framework which continues to remain integral to

all that we do, with the Board seeking to provide

our leadership team with the necessary support

and guidance to succeed.

I have been Chairman of the Board now for

some five years, and the one governance

requirement (see UKLR:6.6.6R(9)) which

we have not been able to meet during that

time relates to the Board’s composition and,

specifically, its diversity. As this is a ‘comply

or explain’ requirement, I thought it would be

helpful for me to give you a fuller explanation

at this juncture on where we have made

progress towards compliance. At the outset,

let me apologise for any offence that I may

inadvertently cause by referring to colleagues

and others based on their ethnicity and gender

rather than as to their skills and competence,

but it is not possible to do otherwise for this

aspect of the UK Corporate Governance Code

(the Code) and Listing Rules compliance

requirements. I am of the view that compliance

here is actually quite challenging, with specific

quota targets for team composition being

very unusual and, in that regard, the Code and

Listing Rules requirements are certainly the only

examples I have personally come across. Board

appointments, as with any appointment, are

and should be based on need, with the primary

criteria being the ability and contribution

that any such appointment will bring to the

Board, with diversity an important but

secondary consideration.

To reverse the selection criteria would

obviously be wrong, being discriminatory (and

unsurprisingly a breach of the discrimination

laws) and, I believe, would be acting contrary

to shareholders’ interests. Nonetheless, as at

the date of last year’s AGM (16 January 2025) I

was pleased that the two appointments we had

needed to make since I joined the Board in May

2020 were both female, one of whom would be

considered ethnically diverse by the Code.

On 4 March 2025 we announced the

resignation of Paul Baker, Chief Financial

Officer, who will leave the business on 21

November 2025, leaving us to join a large

private business operating in a different sector.

I am happy to confirm that in line with the

announcement made on 31 July 2025 Richard

Clay has agreed to join the Company as Chief

Financial Officer on 2 February 2026. Richard

was the best candidate from a thorough

search process as outlined in the Nominations

Committee Report on page 102. Readers

may be interested that we ended up with a

decision between Richard and a very good

female candidate whose appointment would

have enabled further progress to meeting the

governance requirements. However, the internal

and external assessment (based on profiling)

was that Richard was the best choice, so he was

duly appointed.

Our next opportunity to make progress on

this diversity requirement, absent anything

unforeseen or an emerging need, will be in

2026 when Mark Whiteling is likely to step

down having served nine years on the Board.

With Manju already in situ as Audit Chair-

designate there will be a net reduction in Board

size and a technical improvement towards the

40 per cent quota target. As Mark is also the

Senior Independent Director (SID) this will

however also present us with the opportunity to

potentially address the additional requirement

that at least one of the four main senior roles

on the Board should not be occupied by a man.

Whilst it clearly remains unlikely that we will

be fully compliant with the Code and Listing

Rules requirement by the end of FY2026, it is my

intention to provide a further update and explain

any further progress at that point.

Chairman's Statement on Corporate Governance

David Blackwood

Chairman

Much of the focus

of the Board

during FY2025 has

revolved around

our endeavours

to maximise

shareholder value

and to ensure

the long-term

sustainable success

of the Company.

Smiths News plc Annual Report and Accounts 2025

This year, as partly explained above, has seen

a number of changes at Board level. At the

conclusion of the AGM in January 2025 Denise

Collis (independent Non-Executive Director and

Remuneration Committee Chair) retired from

the Board following the expiry of her nine-year

term. Manju Malhotra joined us on 16 January

2025 and the intention remains for her to

succeed Mark Whiteling as Chair of the Audit

Committee as he will reach his nine-year term at

the conclusion of the AGM in January 2027. With

the departure of Denise, Michael Holt stepped

into the role of Chair of the Remuneration

Committee while also retaining his role as

Colleague Engagement Non-Executive Director.

Our Executive Leadership Team has also seen

an addition, with the recruitment of a Managing

Director (Adam Wylie) for our growing reverse

logistics recycle operation for retailers across

our network. Adam joined us in July 2025,

enhancing our commercial and compliance

expertise in this area and demonstrating our

commitment to driving ongoing momentum in

this area. More details regarding the changes to

both the Board and Executive Leadership Team

can be found in the Nominations Committee

Report on page 102.

This year was the third year in the Board

performance evaluation cycle and thus an

external evaluation was undertaken by an

external consultancy, EquityCulture Ltd. Once

again, I am happy to report that the Board is

functioning effectively and in accordance with

good corporate governance principles, with a

detailed report in this regard available on page

76. The ten-year period for the renewal of our

all-employee and long-term share incentive

scheme rules falls due at the AGM in January

2026 and we have therefore revisited these

rules and made some minor changes to reflect

updated market practice, details of which are

set out in the Directors’ Remuneration Report

on pages 106 and the Notice of Meeting which

accompanies the AGM in January 2026. This

leads me to refer also to the Remuneration

Policy which is reaching the end of a three-

year maturity cycle and thus a new policy

is to be put to shareholder vote at the AGM

in January 2026, details of changes in our

reward strategy and approach are set out

in the Directors’ Remuneration Report (see

page 106). On the subject of colleague reward

and remuneration, the Company continues

to support our colleagues through education,

awareness and engagement to promote and

enable them to get the most out of the benefits

structure and offerings made available by the

Company. During the year, we migrated all

colleagues to a monthly payroll schedule and

supported colleagues during this process with

an externally facilitated salary advance service

which enabled colleagues to access up to 50%

of their earned pay (after taxes and deductions)

ahead of the new monthly pay date.

As the reporting requirements associated with

ESG sustainability and corporate governance

continue to grow, we have tried to focus on

the areas which are considered to be material

to our business and in respect of which

specific key performance indicators have been

identified, particularly in respect of each of

our Sustainability pillars (please refer to our

Sustainability Report which commences on

page 42). After due consideration, we have

decided to re-introduce a People Report as part

of the Annual Report and which will supplement

the Sustainability Report. In line with what

we did last year we have again not included

a provision-by-provision breakdown of our

compliance against the 2018 edition of the UK

Corporate Governance Code but have included

a cross-reference table (see page 88) indicating

how and where each provision has been met

and reported herein. We hope this streamlined

approach is welcomed by all readers.

In closing, on behalf of myself and the Board

I would like to thank everyone connected with

Smiths News for their unstinting contribution

to another positive year for the business and to

provide our continuing assurance that the Board

and management will lead the business with

dedication, focus and integrity. Once again,

I would encourage all shareholders to attend

and vote at the forthcoming AGM, either in

person or by using the various electronic

methods of engagement allowing you to

exercise your vote and ensure your voice is

heard. As a final reminder, in the light of the

ongoing share forfeiture programme we are

conducting with the Company’s Registrars

(EQ) to remove ‘gone away’ shareholders from

the database, can I please take the opportunity

to stress the importance of ensuring your

electronic contact details maintained by EQ are

kept up to date. Lastly, I look forward to seeing

you at the AGM in Swindon and to reporting

again this time next year.

David Blackwood

Chairman

3 November 2025

These activities have continued to be

supplemented by our Colleague Support Fund

– more details in this regard can be found in the

People Report on page 28.

In addition to undertaking periodic visits to

our operational sites, the Board undertook a

formal night visit to our Nottingham final mile

depot where Directors had the opportunity to

meet colleagues, review operational processes

and to better understand the potential risks,

issues and challenges with regard to some

of the business’ operational processes,

particularly in relation to the nascent new

verticals. Jon Bunting (CEO), Paul Baker

(CFO) and I have also had direct one-to-one

engagements with our largest shareholders,

providing an opportunity to discuss their

perspectives and listen to their feedback on

a variety of business issues, not least being

that of our remuneration policy and reward

strategy, our growth and diversification strategy,

the future of print media and the impact of

wider macro-economic and geopolitical

considerations. These engagements, including

those with our lenders and retail and publisher

clients as well as with our colleagues (the

latter driven by Michael Holt (Colleague

Engagement Non-Executive Director)) remain

an important part of our role as Board members

and inform and guide the decisions we make

in the interests of all the stakeholders in the

Company as we seek to make balanced and

considered decisions while, at the same time,

delivering a long-term sustainable business

(see Stakeholder Engagement table, including

S172 statement, on page 32). Our commitment

to health and safety saw FY2025 mark the first

year of our revised three-year Health & Safety

journey– Build, Rise, Lead. The purpose of

this plan is to strengthen foundations, embed

consistency across the network, and set a clear

path for continual improvement, with a focus

for this year on the embedding of consistent

safety practices across operations, providing

the platform for further improvement in incident

prevention and cultural maturity. The Board

continues to monitor all incidents and accidents

as a standing agenda item at Board meetings.

I am pleased to report our year-on-year

reduction in the number of injuries and total

accident frequency rate continues to improve

(FY2025: 1.84 accident frequency rate (per

100,000 hours)) FY2024: 2.29), which reflects a

19% decrease year-on-year.

During FY2024 we started to implement some

changes to the way in which we presented our

Annual Report, looking to tackle both its length

and complexity, specifically looking to cut out

repetitiveness and this year we have continued

with that approach.

Strategic Report Governance Financial Statements

Smiths News plc Annual Report and Accounts 2025

Our Board and Executive

Leadership Team

After a period of nine years on the Board,

Denise Collis stepped down at the AGM in

January 2025, having reached the end of her

nine-year term with the Company.

Coinciding with Denise’s departure, Manju

Malhotra joined the Board on 16 January 2025

and Michael Holt assumed the role of Chair

of the Remuneration Committee. Paul Baker,

Chief Financial Officer, resigned on 3 March

2025 and left the business on 21 November

2025, to be replaced by Richard Clay who

will join the Company on 2 February 2026.

Corporate Governance

In respect of the Executive Leadership Team,

Phil White has stepped down following the

conclusion of the financial year as a result of

his retirement and, in July 2025, we welcomed

Adam Wylie who will head up Smiths News

Recycling. Further details in this regard are

available in the Nominations Committee Report

on page 102.

Smiths News plc Annual Report and Accounts 2025

Executive Directors

Jonathan Bunting

Paul Baker/Richard Clay

Board

David Blackwood

Chair

Mark Whiteling

Senior Independent Director and

Audit Committee Chair

Michael Holt

Remuneration Committee Chair

and Colleague Engagement

Non-Executive Director

Deborah Rabey

Independent Non-Executive Director

Manju Malhotra

Independent Non-Executive Director

Jonathan Bunting

Executive Director and CEO

Paul Baker

Executive Director and CFO

(Resigned 3 March 2025 – expected

to leave the business in late 2025)

Richard Clay

Executive Director and CFO

(Appointed 30 July 2025 – expected

to join at the start of 2026)

Marcus Cotes

Technology Director

Simon Gage

Commercial Director

Emma Jones

People Director

Stuart Marriner

Company Secretary and

General Counsel

Emily McMinn

Strategy and Change Director

Lucy Robertson

Operations Director

Adam Wylie

Managing Director Smiths

News Recycle

Stuart Marriner

Leadership Team

(including the

Executive Directors

and Company

Secretary)

Company

Secretary and

General Counsel

Board and Executive Leadership Team

Strategic Report Governance Financial Statements

Paul Baker

Chief Financial Officer

Year of appointment: 2021

Gender: Male

Ethnic origin: White

Citizenship: British

Disability: None

Paul is a highly experienced senior

executive, with extensive and

relevant financial and business

transformation experience, most

recently as Integration Director

at Compass Group plc. Prior to

that, he held various regional and

divisional Finance Director roles

within each of Compass Group

(2013 to 2021), Iglo Group/Birds

Eye Limited (2011 to 2013) and

Cadbury Schweppes PLC (1997

to 2010). He left the business on

21 November 2025.

Other current appointments

None

Jonathan Bunting

Chief Executive Officer

Year of appointment: 2010

Gender: Male

Ethnic origin: White

Citizenship: British

Disability: None

Jonathan has broad commercial

and operational leadership

skills, combined with extensive

experience gained within the

newspaper and magazine

distribution industry, experience

which is critical for the long term

development and execution of the

Company’s strategic plans.

Jonathan joined WH Smith News

in 1994. He rose through the

organisation in a variety of sales

and marketing managerial roles

before being promoted to the

executive management team

in 2001. In April 2014, Jonathan

became Managing Director of the

Connect News & Media division

and, subsequently, Chief Operating

Officer in September 2017, a

position which spanned wider

group business interests held at

the time, together with Smiths

News. Following his appointment

as Interim Chief Executive

Officer on 5 November 2019, this

appointment was confirmed on

15 June 2020.

Other current appointments

None

Committee key

Audit

Nominations

Remuneration

Sustainability

Disclosure

Approvals

Chair

Composition and

attendance

Board of Directors

After a period of nine years on

the Board, Denise Collis is not

expected to stand for re-election

at the forthcoming AGM in January

2025, having reached the end of a

nine-year period beyond which the

2018 Corporate Governance Code

expects Ms Collis’ independence

requirements to potentially be seen

to be impaired. As a consequence,

the Board has commenced

a search process, led by the

Chairman, for the recruitment of

a suitable candidate who would

be able to join the Board, however

at the time of reporting a suitable

appointment has yet to be made.

Corporate governance continued

David Blackwood

Chairman

Year of appointment: 2020

Gender: Male

Ethnic origin: White

Citizenship: British

Disability: None

David has extensive business

and listed company experience,

notably in Finance, Audit and

Risk. David uses his experience

and knowledge to lead the Board

in reviewing and approving

management’s plans for the

development of the Company’s

strategy and operational and

financial performance. As Chair of

the Nominations Committee, David

is also responsible for leading the

assessment of the capabilities

and skills of the executive and

non-executive leadership, and for

longer-term succession planning.

Most recently, David has been a

non-executive director of Dignity

plc (until June 2020), Scapa

Group plc (until April 2021) and

The Go-Ahead Group plc (until

October 2022) where, in respect

of Dignity and Scapa he served as

chair of the audit committee and

as a member of the Go-Ahead

audit committee and, otherwise in

each case, as Senior Independent

Director and as a member of the

nomination and remuneration

committees. He was formerly Chief

Financial Officer of Synthomer plc

where he was employed for seven

years, stepping down in 2015,

prior to which he held a number

of senior roles within Imperial

Chemical Industries plc (ICI).

David has also previously served

as a member of the Cabinet Office

Audit and Risk Committee and on

the Board for Actuarial Standards.

He is a member of the Institute of

Chartered Accountants in England

and Wales (ICAEW) and a Fellow

of the Association of Corporate

Treasurers (ACT).

Other current appointments

None

Smiths News plc Annual Report and Accounts 2025

Mark Whiteling

Senior Independent

Non-Executive Director

Year of appointment: 2017

Gender: Male

Ethnic origin: White

Citizenship: British

Disability: None

Mark has gained extensive finance

and operational experience at a

senior level within a number of

diverse businesses. He brings

recent and relevant financial

expertise required to lead the

Audit Committee.

Mark was most recently the Chief

Financial Officer of Interserve

PLC and has previously been the

Deputy Chief Executive Officer

and Chief Financial Officer of

Premier Farnell plc. He was a

non-executive director of Future

plc until December 2014 and the

Senior Independent Director of

Hogg Robinson Group PLC until

July 2018, in both cases acting

as chair of the respective audit

committees as well as serving on

their nomination and remuneration

committees. In addition, Mark has

been Chairman and non-executive

director of Xpediator PLC from

September 2021 until March 2022

and member of its remuneration

committee.

Other current appointments

None

Michael Holt

Independent Non-Executive

Director and designated

Colleague Engagement NED

Year of appointment: 2018

Gender: Male

Ethnic origin: White

Citizenship: British

Disability: None

Michael possesses relevant

commercial and operational

experience gained within the

logistics and distribution industries.

With his detailed understanding

of the distribution sector and its

opportunities and challenges,

Michael provides an independent

voice and commercial sounding

board in the development and

execution of the Company’s

strategy and business ambitions.

Michael was formerly Chief

Operating Officer of FedEx

Express, Europe until the end

of September 2018 and held a

number of other senior executive

roles with FedEx Corporation

from 2006, including co-chair of

the Global integration Committee

(responsible for the harmonisation

of physical operations to the terms

and conditions of employment).

Prior to that, Michael held senior

executive roles at a number of

leading logistics organisations

including ANC Group, where he

was instrumental in leading the

turnaround of the business from a

position of loss-making to industry

leading margins and strong profit

recovery prior to its successful sale

to FedEx in 2006.

Other current appointments

None

Deborah Rabey

Independent Non-Executive

Director

Year of appointment: 2023

Gender: Female

Ethnic origin: White

Citizenship: British

Disability: None

Deborah is a seasoned retail

executive with a wealth of

experience in driving commercial

performance, proposition

development, and supply chain

efficiency. She brings broad, cross-

sector expertise across general

merchandise, clothing, health

& beauty, and food, gained in

grocery, high street, convenience,

and e-commerce environments.

Deborah spent 23 years at Tesco

PLC (to October 2022), including

14 years in director level roles

such as UK Category Director for

General Merchandise and Global

Sourcing Director, alongside senior

leadership roles in trade marketing

and change management. Most

recently, she served as Chief

Customer Officer at Wilko, where

she was responsible for the

commercial, supply, sourcing,

brand, marketing, and digital

functions.

Other current appointments

None

Manju Malhotra

Independent Non-Executive

Director

Year of appointment: 2025

Gender: Female

Ethnic origin: Ethnic minority

Citizenship: British

Disability: None

Manju was CEO at Harvey Nichols

until 31 December 2023. Manju

joined Harvey Nichols in 1998 and

progressed through various roles,

including CFO and co-COO, before

her appointment as CEO. She has

extensive experience in customer-

focus, developing a values-led

culture, strategy, operations,

finance and technology operations.

Other current appointments

Manju is a Non-Executive Director

and ESG Committee Chair at

Workspace Group plc and a

Non-Executive Director and Audit

Committee Chair at abrdn UK

Smaller Companies Growth Trust

plc. She is also a Non-Executive

Director at London & Partners, an

international trade and investment

agency for London.

Stuart

Marriner

Company

Secretary

and General

Counsel

Stuart joined the business

in October 2008 and is

responsible for business,

legal and regulatory support.

Prior to joining the Company,

he had spent four years as

a corporate finance solicitor,

including extensive periods

on secondment with Somerfield

Stores and Punch Taverns.

Stuart was appointed as

Company Secretary and

General Counsel on

1 September 2011 and

continues to lead the legal and

company secretariat teams.

Strategic Report Governance Financial Statements

Executive Leadership

Team

Our Executive Leadership Team

combines an enviable depth of

industry experience with the skills

and fresh perspectives we need

to make progress in our targeted

growth markets. The collective

expertise not only shapes and

leads our strategy, but also, by

working closely with industry

partners, plays an active role in

contributing to the development of

our wider supply chains.

This year we welcomed Adam

Wylie who joined to lead the

Recycling business and also

announced the appointment of

Richard Clay as Chief Financial

Officer, replacing Paul Baker. Aside

from these changes, the members

of the leadership team have

worked together for several years,

with an unstinting commitment

to a strategy that has delivered

greater stability to the business

while simultaneously creating

opportunities to leverage our skills

and competencies in new markets.

Marcus Cotes

Head of Technology

Joined: November 2020

Responsibilities: Leading the

development and implementation

of technology to enhance

operational efficiency through

innovation and data security.

Emily McMinn

Head of Strategy & Change

Joined: Oct 2017

Responsibilities: Leads the

growth, change and strategy

team in defining medium-term

strategic priorities, identifying

growth opportunities and

managing strategic value creation

programmes in collaboration with

the Leadership Team.

Jon Bunting

See biography on page 78

Simon Gage

Head of Commercial

Joined: July 1986

Responsibilities: Leads the

commercial and contractual

agreements across our newspaper,

magazine and collectable business,

including new categories. This

includes developing the trading

relationships with our publisher

and retailer customers to promote

long term sustainability of the

category.

Lucy Robertson

Head of Operations

Joined: January 2022

Responsibilities: Leads the

Operations function for the

business, ensuring end-to-

end logistics operations from

distribution centres through to

final mile delivery and collection,

plus Safety and related support

functions (Fleet, Property and

Facilities). Responsible for

Operational Strategy to optimise

efficiencies and cost whilst

improving and sustaining service

levels for our customers.

Paul Baker / Richard Clay

For Paul Baker, see biography on

page 78 and for Richard Clay see

Nominations Committee Report

page 102.

Emma Jones

Head of People

Joined: January 2020

Responsibilities: Setting the

People Strategy to ensure that our

approach to colleague Reward,

Talent attraction, retention and

development, communications,

People Systems and overall

Colleague Experience fosters a

values-driven culture that inspires

and motivates all of our colleagues

to be the best that they can be

and guarantees the delivery of our

business strategy.

Adam Wylie

Head of SN Recycling

Joined: July 2025

Responsibilities: Leads and

develops the recycling business,

focussing on the development

of scalable solutions, nurturing

key customer relationships, and

defining the strategic roadmap.

Stuart Marriner

See biography on previous page.

Smiths News plc Annual Report and Accounts 2025

Corporate Governance continued

Management Sub-committees/

Steering Committees

Support in defined areas

CEO and Executive

Leadership Team

Day-to-day management

of the Company

Audit Committee

• oversees our risk management

framework and system of controls

• ensures the accuracy of our financial

statement, non-financial disclosures and

narrative reporting

• monitors and reviews the effectiveness

of the internal and external auditors

• reviews the effectiveness of compliance,

including whistleblowing and fraud

prevention

Disclosure Committee

• monitors and oversees the Company’s

compliance with the Market Abuse

Regulation (as in force in the UK) and

the consideration of inside information

procedures and disclosures

Approvals Committee

• responsible for approving delegated

Board matters

Sustainability Committee

• oversees the Company’s Environmental,

Social and Governance strategy

• monitors progress against key

performance indicators

Remuneration Committee

• Determines Directors’ and senior

management’s remuneration strategy

and policy

• oversees the implementation of our

remuneration policy

• reviews workforce remuneration

• related policies and the alignment of

incentives and rewards with culture

Nominations Committee

• makes recommendations to the

Board for executive and non-

executive appointments and

succession planning

• promotes employee engagement and

diversity, equality and inclusion

Board

See page 106 for report

See page 102 for report

See page 92 for report See page 42 for report

Strategic Report Governance Financial Statements

Smiths News plc Annual Report and Accounts 2025

Corporate Governance continued

Delegation of Responsibilities

Board Chairman

David Blackwood, the Chair of the Board, leads

the Board and has overall responsibility for

ensuring it effectively fulfils its responsibilities

in overseeing the Company’s strategy and

performance, both operational and financial,

while maintaining a strong system of corporate

governance. The recent outcome of the Board

evaluation has demonstrated that the culture

of openness and vigorous debate fostered by

David underpins constructive Board relations.

David has also had regular engagements with

shareholders, ensuring clear and effective

communication of information to them.

Senior Independent Director (SID)

Mark Whiteling, our Senior Independent

Director provides support to the Chairman in

the delivery of his objectives while also being

available to fellow Board members to provide

guidance and support, if necessary. As SID,

Mark is responsible for oversight of the Board

Chair’s performance.

The Board and its Committees receive regular

reports from functions and managing steering

committees from across the business. Detailed

agenda planners are approved annually in

advance and revised monthly to ensure that all

compliance, regulatory and operational matters

are adequately and timeously addressed in

a manner that ensures the Board has full

knowledge and oversight of the Company’s

activities, including the impact of decisions on

all stakeholders. The Board manages business

and process requirements through a formal

schedule of matters reserved specifically for its

decision-making, the details of which can be

found on our website (Reserved Matters).

For more information on the composition,

roles and responsibilities of the Board and the

division of responsibilities between the Chair/

CEO, as well as to access the internet links

referred to above, please refer to our website

(Corporate Governance - Smiths News) or, if

you are reading this electronically, please click

on the relevant links.

Chief Executive Officer (CEO)

As CEO Jonathan Bunting leads our business

and oversees daily operations of the Company.

The CEO is ably assisted by the Executive

Leadership Team and together they focus on the

development and implementation of strategy;

financial and operational performance; risk

management; commercial and organisational

developments; management of all aspects of

human capital (including succession planning)

and sustainability. Jonathan also takes the

lead in setting the ethical and cultural tone

of the Company and communicating with

shareholders and other key stakeholders

while ensuring the accurate and timely

communication of information to the market.

The Board and its Committees receive regular

reports from functions and managing steering

committees from across the business. Detailed

agenda planners are approved annually in

advance and revised monthly to ensure that all

compliance, regulatory and operational matters

are adequately and timeously addressed in

a manner that ensures the Board has full

knowledge and oversight of the Company’s

activities, including the impact of decisions on

all stakeholders. The Board manages business

and process requirements through a formal

schedule of matters reserved specifically for its

decision-making, the details of which can be

found on our website (Reserved Matters).

For more information on the composition,

roles and responsibilities of the Board and the

division of responsibilities between the Chair/

CEO, as well as to access the internet links

referred to above, please refer to our website

(Corporate Governance - Smiths News) or, if

you are reading this electronically, please click

on the relevant links.

Non-Executive Directors (NEDs)

The NEDs bring a wealth of expertise and

experience to the Company which provides

guidance and support in the development of

strategy, oversight of operational and financial

performance and the ability to constructively

challenge decisions to deliver the best outcomes

for all stakeholders.

The Board Committees are comprised of the

NEDs and Executive Directors will periodically

attend as invited guests (please see above).

The Board and its Committees receive regular

reports from functions and managing steering

committees from across the business. Detailed

agenda planners are approved annually in

advance and revised monthly to ensure that

all compliance, regulatory and operational

matters are adequately and timeously addressed

in a manner that ensures the Board has full

knowledge and oversight of the Company’s

activities, including the impact of decisions on all

stakeholders. The Board manages business and

process requirements through a formal schedule

of matters reserved specifically for its decision-

making, the details of which can be found on our

website (Reserved Matters).

For more information on the composition, roles

and responsibilities of the Board and the division

of responsibilities between the Chair/CEO, as

well as to access the internet links referred to

above, please refer to our website (Corporate

Governance - Smiths News) or, if you are

reading this electronically, please click on the

relevant links.

Strategic Report Governance Financial Statements

Board and Committee meeting attendance

Scheduled Board

meetings

Special Board

meetings

Committee meetings

Audit Nominations Remuneration Sustainability

Number of meetings 10 0 4 2 4 4

David Blackwood 10 0 2 4 4

Michael Holt 10 0 4 2 4 4

Mark Whiteling 10 0 4 2 4 4

Deborah Rabey 10 0 4 2 4 4

Denise Colis

Retired 16 January

2025 4 0 1 1 2 1

Manju Malhotra

Appointed 16 January

2025 6 0 3 1 2 3

Jonathan Bunting 10 0 4

Board discussions and decisions primarily take

place at regular scheduled meetings which have

structured agendas aligned with the optimal

points of business during the annual cycle.

Through this structured approach, the business

of the Board is spread over the year ensuring

all governance and regulatory matters are

properly dealt with but also providing sufficient

time to ensure trading and financial information

is considered along with the allocation of

sufficient time to comprehensively consider

more strategic priorities and other matters

requiring the Board’s attention. Board meetings

are held at different locations to expose the

Board members to operational issues and allow

the members to engage with staff across the

business estate. In this way, the meetings are

supplemented with in-depth presentations and

experiences such as the walk through of the

early morning process to receive and despatch

the plethora of daily newspapers. The regular

meetings are supplemented with strategy

sessions as well as structured meetings with

other stakeholders such as colleague forums,

investors and publisher clients undertaken by

individual directors, with feedback provided

to the Board on such engagements. Through

this comprehensive engagement process,

the Board members have access to the best

available information and are able to consider

the impact of their decisions on the interests of

all stakeholders.

In addition to formal Board and Committee

meetings, sufficient time is provided at suitable

intervals, for the Chair to meet privately with the

Senior Independent Director and Non-Executive

Directors to discuss any matters arising and to

address any issues or concerns.

The Board and its Committees receive regular

reports from functions and managing steering

committees from across the business. Detailed

agenda planners are approved annually in

advance and revised monthly to ensure that all

compliance, regulatory and operational matters

are adequately and timeously addressed in

a manner that ensures the Board has full

knowledge and oversight of the Company’s

activities, including the impact of decisions on

all stakeholders. The Board manages business

and process requirements through a formal

schedule of matters reserved specifically for its

decision-making, the details of which can be

found on our website (Reserved Matters).

For more information on the composition,

roles and responsibilities of the Board and the

division of responsibilities between the Chair/

CEO, as well as to access the internet links

referred to above, please refer to our website

(Corporate Governance - Smiths News) or, if

you are reading this electronically, please click

on the relevant links.

Smiths News plc Annual Report and Accounts 2025

The Board met ten times during the year (including the Annual General

Meeting. An overview of our Board’s key activities in 2025 is provided below.

See principal and emerging risks on page 67 / Risk Report

See s.172 factors on page 32 / Stakeholder Engagement Report

Board Activities in FY2025 Principal risk S.172 factors

Governance

• considered the range of standard governance issues including directors’ conflicts of

interest, terms of reference of Board committees and matters reserved for the Board

and considered the Annual General Meeting approach and resolutions to be put to

shareholders for approval

• reviewed cyber security landscape and recent events and the Company’s preparedness

and posture

• received and reviewed whistleblowing reports and activities and reviewed various

policies

• approved the interim financial results and the Annual Report & Accounts

• reviewed corporate social responsibility, with specific focus on human capital,

customer relations, climate change and business ethics and overall Sustainability KPIs

• monitored legislative developments and the potential impact on the business

• received reports from the Company’s advisers, including its corporate brokers

• monitored engagement with stakeholders, including responses to our 2025 AGM

and voting outcomes

• received updates on the impact to stakeholders of operational and strategic matters

• reviewed the external evaluation of the Board and its committees

1, 2, 5, 6 & 8 A, C,E & F

Finance

• considered and approved our trading statements, half year and full year reports

• reviewed the treasury and tax functions and performance, including funding, liquidity

and insurance. Approved and monitored budgets and business plans

• considered the declaration of dividends and the merits of other forms of distribution

• reviewed financing structures and external financing arrangements

• oversaw financial performance, receiving updates on priority initiatives, including

growth opportunities and mitigations to the ongoing inflationary environment and tax

increases arising from the Autumn 2024 Budget

• revisited and revised regulatory policies relevant to our business operations, including

in relation to tax, capital allocation/ dividend policy, anti-bribery and anti-trust

• budgeting process, including key assumptions, risks and stress testing

2, 5 & 8 A & F

Business Review, Performance and Strategy

• approved and monitored progress against management’s key business imperatives

• considered business growth and development opportunities, risk and reward

• reviewed the sustainability strategy and KPIs for FY2026

• reviewed performance and reward

• reviewed business continuity plans

• considered new publisher contract renewals and terms of market announcements

• reviewed investment and implementation of new technology, including a

new warehouse management system and the procurement of a transport

management system.

2, 4, 5, 6, 7 & 8 A, B, C, D & E

Corporate Governance continued

Strategic Report Governance Financial Statements

Board Activities in FY2025 Principal risk S.172 factors

Audit, Internal Controls and Risk

• reviewed business-wide risks, together with the associated risk appetite and

mitigating actions

• received reports from the Audit Committee Chair

• ongoing assessment of the effectiveness of internal controls and processes

• monitored health and safety strategy and periodic performance through monthly

board reports

• monitored and data protection compliance

• approved the going concern statement and assessment of viability, valuation

of investments and principal and emerging risks

• reviewed performance of the statutory auditor and received and considered

recommendation for their appointment and fees

1, 2, 3 & 8 A, B, D & E

People

• received regular updates from the Remuneration Committee on remuneration

and performance

• considered a new reward strategy and policy to be put to shareholders for approval

at the 2026 Annual General meeting, including agreeing communications strategy

and outcome of targeted engagements with the largest shareholders

• considered health and safety related matters, elevated from the Audit Committee

in FY2024

• considered the new LTIP and SAYE rules to be put to shareholders for approval at the

2026 Annual General Meeting and approved various employee share awards (SAYE,

LTIP and deferred bonus)

• reviewed employee engagement and employee satisfaction survey results

• supported equality, diversity and inclusion

• received reports on colleague engagement forums and considered ways to broaden

engagement and enhance contributions from participants

• undertook recruitment processes for a new CFO and executive lead for the Smiths

News Recycling business and an orderly transition to the new leadership

• considered the impact of a change in payroll cadence from weekly to monthly payment

1, 4 & 8 A, B & F

Smiths News plc Annual Report and Accounts 2025

Corporate Governance continued

Tenure and skills

The Board assesses the number of external

appointments held by Non-Executive Directors

on a case-by-case basis and, while the

holding of an excessive number of external

appointments is discouraged it is accepted

that role requirements can vary in terms

of both complexity and time commitments

required. Each of the Non-Executive Directors

has confirmed that they are able to allocate

sufficient time to discharging their obligations

and meeting the Company expectations of

them. The Board is satisfied that this remains

the position, taking note of the most current

external Board evaluation and will continue

to monitor the external commitments of its

members with the assistance of the

Company Secretary.

The Board seeks to identify areas for skills

development so as to ensure that it, as a

collective, has the right balance of skills and

knowledge which are effective, relevant

and current. Specific training briefings from

both management and external experts

are supplemented by Directors sharing

developments and regulatory updates within

their areas of expertise with fellow Board

members. A quarterly newsletter containing a

summary of current topical issues is circulated

and individual directors are encouraged to raise

any specific training needs. Focus areas in

FY2025 included trends within the sustainability

reporting standards, as well as annual reporting

standards, technology developments (including

artificial intelligence), new listing regime reform

and the UK’s revised Corporate Governance

Code, shareholder trends and expectations and

new legislative developments.

In line with best practice, and as part of the

conditions of appointment, all Directors resign

annually and make themselves available for

re-election by shareholders at Annual General

Meetings, where letters of appointment for

each non-executive director are also available

for inspection. Non-Executive Directors remain

within the recommended maximum of nine-

year terms of service and, accordingly, it is

anticipated that Mark Whiteling will not stand

for re-election at the 2027 AGM. Set out in the

Notice of Annual General Meeting for 2026 is

information on the skills and experience of each

director seeking re-election at the 2026 AGM.

The Board seeks to identify areas for skills

development so as to ensure that it, as a

collective, has the right balance of skills and

knowledge which are effective, relevant

and current. Specific training briefings from

both management and external experts

are supplemented by Directors sharing

developments and regulatory updates within

their areas of expertise with fellow Board

members. A quarterly newsletter containing a

summary of current topical issues is circulated

and individual directors are encouraged to raise

any specific training needs.

Focus areas in FY2025 included trends within

the sustainability reporting standards, as well

as annual reporting standards, technology

developments (including artificial intelligence),

new listing regime reform and the UK’s revised

Corporate Governance Code, shareholder

trends and expectations and new legislative

developments narrative around skills.

Gender and ethnicity diversity

The Board acknowledges and welcomes the

benefits of diversity and inclusion, noting the

strides it has made across the Company to

promote these principles as further set out in

the People Report and with the appointment in

2025 of the Board’s first ethnic diverse member.

That said, in relation to its own composition, the

Board has noted its current non-compliance

with the requirements under the Listing

Rules (see UKLR:6.6.6R(9) and the FCA

Diversity Targets 2022) which are targeted

at encouraging enhanced disclosures and

positive action in relation to gender and ethnic

diversity at Board level. Accordingly, given the

established Board composition, the tenures

of current directors and in light of recent

evaluations of the Board reinforcing our view

that that the Board is operating effectively and

in accordance with good corporate governance

principles, the Board does not see a compelling

and proportionate rationale to immediately

replace any of the Chair, CEO, CFO or SID

outside of the normal rotation cycle or terms

of employment, as applicable.

However, during the course of future rotations

of Non-Executive Directors (please see the

rotation schedule set out in the Nominations

Committee Report on page 102), the Board

expects to look at the D&I requirements of

the Listing Rules at that time when selecting

suitable candidates, at the same time as

considering the need to secure the best person

for the position and the associated merits

of having the right blend of skills, expertise,

commitment and experience.

Further, whilst the Board is very much keen

to take steps to improve its gender and ethnic

diversification, we acknowledge that this may

take time, particularly in the context of the

broader corporate-market together facing

with the same defined targets and where

competition is likely to be fierce for a pool

of talent that is naturally limited by the size,

nature, location and profile of our business. For

further information, please see the Chairman’s

Introduction to Governance on page 74.

Director appointments,

induction and succession

planning

No Director is appointed or nominated by or at

the instruction of a stakeholder, with all Director

appointments being solely identified through,

and only appointed following, an extensive

external search agency process.

Selection decisions are based on merit and

the Board strives to ensure that recruitment

activities are fair, transparent and non-

discriminatory. The induction programme

includes a comprehensive and up-to-date

‘Directors’ Toolkit’, which is supplemented

with governance and business documentation,

one-to-one meetings and on-site visits to

some of the Company’s operational sites and

support locations, as appropriate. The objective

of the induction process is to enable new

appointees to gain the necessary insight and

knowledge required to make as full and effective

a contribution as possible to the Board upon

their appointment and to gain an understanding

of Smiths News’ business and strategy,

culture, risk areas and priorities. The Company

Secretary participates in the induction process,

covering issues such as directors’ duties, share

dealing procedures, managing conflicts of

interest and a walk through of

key policies.

The Board understands the importance of

succession planning which is an objective

process based on merit and the assessed skills,

experience and needs of the business and the

Board at the time, while seeking to promote and

uphold our policies, including that relating to

equality, diversity and inclusion across multiple

criteria. Please see the Nominations Committee

Report on page 102.

Board evaluation

In line with the FRC’s Guidance on Board

Effectiveness and the Corporate Governance

Institute’s Principles of Good Practice relating

to external reviews, the Board has adopted

a three-year external Board evaluation cycle.

Following the last externally facilitated Board

evaluation process during FY2022, this year the

Board evaluation was undertaken externally

with EquityCulture, a consultancy with no

connection to the Company or any individual

Director. Online face-to-face interviews with all

Board members took place, with the exercise

centred on an agenda of questions drafted

by EquityCulture. The agenda questions were

based on prior discussions with the Chairman

and Company Secretary, with members of the

Board sent an advance copy of the ‘agenda’

of issues to be addressed during the interview

process. The questions covered Board meetings

and culture, strategy, people, risk, Committees

and other miscellaneous matters. In summary,

the Board was found to be operating effectively

and in accordance with good corporate

governance principles, with no significant

problems identified.

It was noted that the relationships between

the Executives and the NEDs is refreshingly

positive, with all parties playing their part -

NED support, questioning and challenges to

management being considered appropriate by

all concerned, with the Executives welcoming

and valuing NED input and the necessary

components needed to be a truly effective

Board being present.

Strategic Report Governance Financial Statements

Independence

Independent Non-independent

Tenure

* In accordance with the provisions set out in the 2018 edition of the UK Corporate Governance Code, at the time of his appointment

to the Board as Chairman, David Blackwood was independent. The Board considers that all Non-Executive Directors are

independent.

The independence of the Non-Executive Directors was considered as part of the 2025 Board evaluation, the outcome of which

supported the conclusion that they all demonstrated independence in both character and judgement. The Board has also

determined that none of the Non-Executive Directors have any relationships or circumstances which may (or could appear to) affect

their judgement.

The Board has formal procedures in place for the declaration, review and authorisation of conflicts of interest of Board members.

Conflicts are considered and, where appropriate, authorised by the Board on an annual basis. In addition, Directors are requested to

declare any conflicts at the start of all Board meetings. For details of current situational conflicts notified by the directors please see

the Other Statutory Disclosures on page 127.

David Blackwood*

Mark Whiteling

Michael Holt

Deborah Rabey

Manju Malhotra

Jonathan Bunting

Paul Baker (resigned March

2025)

0-2 Years

Manju Malhotra

Richard Clay

3-5 Years

David Blackwood

Deborah Rabey

Paul Baker

>6 Years

Jonathan Bunting

Mark Whiteling

Michael Holt

Key skills & expertise

Retail & Commercial

Sustainability

People/Talent

Distribution/ Logistics

Strategy

Health & Safety

Culture & Values

Financial

Risk

Governance

Female representation

2025 2024 2023 2022

Board 29% 29% 29% 17%

Executive Leadership

Team

33% 33% 33% 33%

The outstanding support and knowledge that

the Company Secretary brings to the Company

and offers the Board

was acknowledged and appreciated by

all. Board members felt that being on the

Smiths News board is a good experience,

with all members exhibiting professional

companionship, a collegiate style, and a strong

sense of shared values and goals. The Board

was found to have attained a balance and

shared vision, with the EquityCulture team

commenting that it is impossible to manufacture

or artificially create this atmosphere. The

chemistry of the Board – or its culture, as they

are closely related, is good, stemming from the

executive leadership of the Company, combined

with a good rapport between the Chair and

the CEO.

Areas for future focus endorsed by the Board to

promote ongoing and continuous improvements

in accordance with good corporate governance

principles included consideration of the pace

of meetings so as not to exclude or limit full

discussions, building on strategy and risk

appetite discussions, considering the impact

of continual efficiency and cost-out demands

against a competing demand of equipping the

Company ready for future growth opportunities,

and some call outs for enhanced material

specifically in relation to more complex and

technical audit matters.

In addition to the external evaluation of the

Board and Committees, each individual

director’s performance was also assessed by

their peers. One-to-one discussions were held

between the Chairman and each Director to

discuss their contribution and performance

during the year, along with any training needs.

A meeting of the Non-Executive Directors

was led by the Senior Independent Director,

in which the performance of the Chairman

was discussed.

0 1 2 3 4 5 6 7 8

external

review

FY2022

(CGI)

External

review FY2025

(EquityCulture)

external

review

FY2028

Smiths News plc Annual Report and Accounts 2025

Corporate Governance continued

EquityCulture has reviewed the disclosures

relating to the evaluation set out in this Annual

Report and has confirmed that they reflect

accurately in respect of both the process

followed and the findings of the review.

Compliance with the UK

Corporate Governance Code

Compliance statement: For the 52-week period

ending 30 August 2025, the Company assessed

itself against the UK Corporate Governance

Code 2018 (the Code), noting that the 2024

Principle Summary Governance Report Strategic Report

Board Leadership and Company Purpose

A Board leadership and effectiveness Governance Framework page 81: C

Board activities page 84: A

Our Stakeholders page 32: D, E

Our culture page 91: B

Nomination Committee Report page 102: B

Audit Committee Report page 92: C, E

Purpose page 04: A

Sustainability Report page 42: A

Stakeholder Engagement page 32: D, E

Business model page 04: B

People Report page 28: E

Strategy page 06: B

Risk Management page 67: C

B Purpose, values and culture

C Internal governance and controls

D Stakeholder engagement

E Workforce policies and practices

Division of Responsibilities

F Role of Chair Board of Directors page 78: F, G

Delegating responsibilities page 82: F, G, H

Nomination Committee Report page

102: H

Audit Committee Report page 92: C, E

Chair’s Statement page 74: F

CEO’s Statement page 14: G

G Independence and division of leadership

responsibilities

H Non-Executive Director role and time

commitment

I Board policies, processes and resources

Composition, Succession and Evaluation

J Appointment processes, succession and

diversity

Chair’s intro to governance page 74: J

Board of Directors page 78: K

Nomination Committee Report page 102:

J, K, L

Chair’s Statement page 74: J, K

CEO’s Statement page 14: J, K

K Board skills, experience and knowledge

L Board evaluation

Audit, Risk and Internal Control

M Internal and external audit Audit Committee Report page 92: M, N, O Risk Management page 67: M, O

Going concern and viability page 65: M, O

N Fair, balanced and understandable

O Principle risks, risk management and

internal controls

Remuneration

P Alignment of remuneration with strategy,

purpose and values

Remuneration Report page 106: P, Q, R Stakeholder engagement page 32: P

Measuring Performance page 16: P

Sustainability Report page 42: P

Q Remuneration Policy Remuneration Policy page 106: Q

R Reviewing remuneration outcomes Remuneration Report page 106: R

revised version, published by the FRC in January

2024, will apply to the Company with effect from

1 September 2025, being in respect of FY2026.

The Company confirms that, throughout the

52-week period ended 30 August 2025, it

has complied with all of the principles and

provisions of the 2018 edition of the UK

Corporate Governance Code (the Code)

but remains mindful of the Board diversity

requirements under the Listing Rules (see

UKLR:6.6.6R(9) and FCA Diversity Targets

2022) which are addressed in this report under

the gender and ethnicity diversity section.

The application of the Code’s principles by the

Company is set out and evidenced throughout

this Annual Report and the table below includes

cross-references to other parts of the Annual

Report (where relevant) to assist readers with

reviewing our compliance during the reporting

period. A more detailed response to the Code

can also be found in the ‘Governance’ section

of our website: www.smithsnews.co.uk/

investor-zone/corporate-governance/

The Company Secretary and General Counsel is responsible for the timely and complete distribution of information to the Board and all Directors have

direct access to the Company Secretary for advice, including independent professional advice where appropriate, at the Company’s expense.

Strategic Report Governance Financial Statements

Culture and Values

At Smiths News we have defined six fundamental values which form the basis of the common

understanding of our expected behaviour and which feed into our collective culture of who we

are and what we stand for. We believe that our corporate culture distinguishes Smiths News

as an employer, a provider of services and as a member of a wider community. Both the Board,

which is ultimately responsible for oversight of our culture and values, and our Executive Leadership

Team collectively recognise the importance of a positive and inclusive culture for our business,

putting our values at the forefront of how and what we do.

Creative

Be imaginative,

adventurous and curious.

Develop inspirational ideas

and innovative solutions.

Open

Share your thoughts

freely and always

stay open to new ideas.

Listen to others, be

positive and engage in

communications.

Trusted

Safe, reliable and

responsible. Take pride in

our work and do the right

thing for our customers

and each other.

Fair

Be inclusive, honest and

respectful to everyone,

whatever their role

or experience.

Friendly

Have fun and be helpful.

Enjoy working together to

deliver great performance.

Quick

Make informed

decisions and act quickly.

Be agile in the way we

work together and deliver

for our customers.

Our Values

Our Values guide the way we work together

and help to set our ambition and strategy.

They are reflective of our hands on and

pragmatic culture, and as such are relevant

to improving performance today and shaping

the solutions of tomorrow.

Smiths News plc Annual Report and Accounts 2025

Talent and Performance

Management

We undertake workforce

planning; performance, talent and

succession initiatives; and learning

and development programmes.

Goal setting and performance

management remains a strong

driver for the business, setting the

direction and measuring what we

are expected to deliver as a team.

Development for all our colleagues

continues to also be important,

with a particular focus on

alignment of development activities

with the strategic direction

of the business. In support of

our development activities, we

have designed and rolled out

a simplified grading structure

(underpinned by the Willis Towers

Watson framework) across the

business giving colleagues greater

visibility of how roles are sized and

providing greater transparency to

career paths.

Engagement Survey

We continue to run our

engagement survey ‘What Matters’

on a 6 monthly basis, having

recognised that this frequency

provides a good balance of fresh

insight without colleagues feeling

as though they are constantly

being surveyed without the

opportunity to take action

against the results. Our survey

methodology is embedded and

despite an active decision not

to ‘overly promote the survey’,

colleague participation remained

high at 85%. UK engagement

trends across all industries

have declined over the past 12

months, but we are proud to have

maintained a strong score of 64%,

further closing the gap with the

global wholesale benchmark. Our

colleagues are actively engaged

with the process, providing

c.2,000 comments at each survey

round. These comments have

become increasingly detailed,

demonstrating the good level of

understanding that our colleagues

at all levels have of business

performance, strategy and culture.

The Board duly plays an active

role in reviewing these results and

in reviewing and setting resultant

action plans and priorities.

Policies and Procedures

Our values and culture are

supported by a number of policies

and procedures, including our

Code of Conduct, Conflicts

of Interest, Anti-Bribery and

Whistleblowing policies, which

are together strengthened by

accredited e-learning modules

(e.g. anti-bribery and corruption,

money laundering prevention,

competition law, data protection

and information security, and

Dignity and Respect modules).

Our procurement policies (which

reference our Modern Slavery

Statement) make clear our

expectations for our supply chain

network with regard to business

practices and what our suppliers

and customers can reciprocally

expect from us in the way that

we interact with them. Customer

complaints are reviewed and

followed up, with potentially

serious matters being brought to

the attention of the Board.

Communications, Town

Halls and Colleague

Engagement Non-

Executive Director

SmithsZone (the Company’s

corporate intranet) continues to

grow in usage and develop in

functionality and together with the

colleague communication portal

“Connect Me” ensures connectivity

and availability of information. Our

‘Town Hall’ all-colleague briefings

format provides quarterly updates

on strategic matters, including

our technology investment

programme, Customer Excellence

and ‘Voice of our Colleagues’.

We have launched our new

Employee Value Proposition this

year ‘As good as our Word’.

Michael Holt, the Colleague

Engagement NED meets regularly

with different groups of colleagues,

providing a further opportunity

for dialogue. Please refer to the

detailed report in the Stakeholder

Engagement, People and the

Sustainability reports, pages 32, 28

and 42.

Save As You Earn scheme. Please

see more information on our

reward approach in the Directors’

Remuneration Report on page 106.

Corporate Governance continued

How we monitor and embed our culture

Holding to account

Please refer to the detailed section on

whistleblowing which is included on

page96 of the Sustainability Report.

Network Groups

Our network groups

have continued to be an

important part of our cultural

programme to drive changes

based on data led business

cases. Achievements from

these groups have included

our Women in News group

securing enhancements to

policies, promoting awareness

such as men’s mental health

and introducing both internal

and external speakers to

support colleagues in a

variety of subjects. Our

new network group ‘We

Care’ focused on charity

and community, launched

this year. More information

on our network groups can

be found in the People and

Sustainability Reports on

page 28 and 42.

Remuneration

Through the Remuneration

Committee we ensure that

our culture and reward

philosophy are aligned, that

there is an understanding

of executive remuneration

and pay gaps as well as

providing opportunities for all

colleagues to maximise their

benefits through access and

understanding. Colleagues

are encouraged to participate

in share ownership through

the Save As You Earn scheme.

Please see more information

on our reward approach in

the Directors’ Remuneration

Report on page 106.

Support and inclusion

Our approach is underpinned by our

values. In the year, we have driven

strategic change programmes, including

specifically the roll out of Operational

Excellence, the acceleration of our

Recycle proposition and our intensified

focus on customer excellence. Our

focus on building diverse talent pools

has increased this year combining

development and progression for our

internal talent alongside the recruitment

of sector experts.

Walking the floor

There is no substitute for

‘walking the floor’ and

directly engaging with our

stakeholders. To this end,

during the year the Board has

undertaken periodic visits to

our operational sites, hosted

‘breakfast briefings’ with

functional teams, as well as

conducted direct one-to-one

engagements with our largest

shareholders, publisher

clients, retail customers and

colleagues – see Stakeholder

Engagement table on

page 32.

Risk Management and Internal

Audit Processes

We maintain strict financial discipline and

risk management processes throughout

the business and do not tolerate

breaches of our rules or procedures,

nor do we encourage short-cuts to be

taken. Our Internal Audit function is

both independent and accountable and

communicates any concerns about the

values and culture to the Board.

Board evaluation/

Leadership behaviour

and Management

oversight

The annual process, whether

internal or external, provides

an opportunity for the Board

to reflect on its performance,

including how it promotes our

culture and values and sets

the tone from the top. The

Board ensures that functional

teams within our business

are both empowered and

resourced appropriately

to support our values and

receives regular reports

demonstrating behaviour

throughout the Company

(e.g. Health & Safety,

Internal Audit, sustainability,

whistleblowing, operational

and financial performance,

risk etc). Please refer also to

our Audit Committee Report

on page 92.

Strategic Report Governance Financial Statements

Creating sustainable value

with our stakeholders (S172

of the Companies Act 2006)

The Board remains committed to both the

intent and spirit of s172 of the Companies Act

2006, with stakeholder engagement identified

as a priority in the Board’s decision-making

processes and, in doing so, the Board seeks

to consider the interests and competing views

of all relevant parties who may be potentially

impacted. The Board has a well-established

programme of engaging with a wide range of

stakeholders, underpinning its commitment to

act in good faith and in a way which is likely to

promote the success of the Company and is to

the benefit of its members as a whole.

The Board (and each director) ensure that they

have a good understanding of the views of all

stakeholders and to this end receive updates

from the CEO and CFO, as well as the Chair

and the designated Colleague Engagement

Non-Executive Director regarding the

outcomes of specific engagements undertaken

during the year. In this regard, please refer to

our Stakeholder Engagement/Section 172

report (see page 32) which sets out our key

stakeholders, how we have engaged with them

and the critical feedback which has impacted

our strategic decisions and long-term success.

Approval

This report was approved by the Board and

signed on its behalf by:

David Blackwood

Chairman

3 November 2025

Audit Committee Report

Chairman’s introduction

I am pleased to present this year’s report from

the Audit Committee which explains how we

have provided an independent and thorough

focus on the audit, risk management, assurance

and reporting arrangements that underpin

the good governance discipline and financial

standards that Smiths News subscribes to.

The Committee’s primary area of responsibility

and its key focus is to promote effective

governance of the Company’s financial controls,

accounting and reporting, including reviewing

the adequacy of related disclosures; the

performance of both the Internal Audit function

and the external auditor; and to oversee the

Company’s risk management, internal control

systems (including whistleblowing reporting

processes and accounting policies) and the

monitoring of ESG reporting and sustainability

matters. In fulfilling this mandate, the

Committee remains acutely aware of the need

to ensure that the interests of shareholders

are properly protected in relation to financial

reporting and internal controls.

The body of this report deals with the

composition of the Committee and its activities

during the year as well as the evaluation of

its performance, which I am happy to report

remains satisfactory following the external

assessment process completed in FY2025.

You will also find detailed information on the

risk management process and the system of

internal controls, including specific reference to

cyber security, health and safety, whistleblowing

and fraud and corruption considerations and

the assurance of sustainability data. The scope

of the Committee’s activities during the year

has afforded the Non-Executive Directors a

good understanding of the strategic direction

of the Company, enabling an assessment of

the risks, challenges and opportunities that

the Company’s chosen course presents, while

also considering the adequacy and timeliness

of both mitigations to address risks while

not losing sight of opportunities identified as

potential new income streams. We have made

good progress this year in the implementation

of our ‘Future Tech’ systems technology

procurement project, with a warehouse

management system now live and operational

at our Hemel Hempstead distribution hub and a

wider transport management system underway

and scheduled for implementation during

Spring 2026, both of which will enhance our

control environment. We remain vigilant in the

area of cyber security, having noted an increase

in recent cyber-attacks on UK companies, and I

would refer you to the detail in this report which

sets out steps we are taking to secure our data.

In preparing the financial statements, key

judgements have been discussed and

challenged by the Committee in order to

satisfy itself as to their appropriateness and the

resultant accounting treatment and presentation

thereof and are set out in detail in the report,

as is the viability statement, neither of which

present any concerns for the Committee. We

have also overseen the activities of the Internal

Audit function which I am pleased to report is

operating effectively.

BDO remains our external auditor, with Oliver

Chinneck appointed as the lead partner at

the end of the FY2023 audit. As Oliver had

previously served as a supporting partner

he is required to rotate off the Company’s

engagement at the completion of the FY2025

audit. It therefore falls to me to bid Oliver

farewell, with the thanks and appreciation of

both the Committee and management, and to

welcome Emma Jarvis who will assume the role

of Group audit partner for FY2026 onwards.

The Committee reviews changes in the

accounting standards, legislation and related

regulations, remaining alert to any such changes

and regularly receives updates on future

changes from both the external auditor and

management. To this end, we have commenced

with preparation for the forthcoming changes

to the Corporate Governance Code with

a process-based gap analysis of our risk

management and internal control framework,

the details of which are set out in the body of

this report.

Finally, I would like to place on record my

thanks to my fellow Committee members,

management who have provided ongoing

support to the Committee, and our internal

and external auditors. I look forward to seeing

our shareholders at the 2026 AGM and will be

happy to discuss any aspects of this report.

Mark Whiteling

Chairman

3 November 2025

Mark Whiteling

Audit Committee Chair

Smiths News plc Annual Report and Accounts 2025

Composition, attendance

and performance

The Board is satisfied with the composition of

the Committee and that each of its members

have the required knowledge, skills and

experience to fulfil the duties of the Committee,

having an understanding of financial,

operational and commercial matters relevant

to our industry. Given the qualifications and

extensive financial experience, the Committee

Chair is considered by the Board to have recent

and relevant experience in accordance with

the requirements of the 2018 edition of the UK

Corporate Governance Code (see the Corporate

Governance Report on page 76 for further

details of Chair’s qualification and experience).

The composition of the Committee meets

the 2018 UK Corporate Governance Code

requirement that the members are independent

non-executive directors, and the Chairman of

the Board is not a member of the Committee.

The Committee met four times during the year

as part of its schedule to consider matters

planned around the Company’s financial

calendar. All Committee members attended

each of the meetings with other regular

attendees, by invitation, including the Chairman

of the Board, the CEO and CFO, Head of

Internal Audit & Risk, the Company Secretary

and General Counsel and representatives from

BDO LLP as external auditors. As part of the

external evaluation process which is undertaken

every three years, the Committee’s performance

was evaluated, and it was confirmed that it

continues to operate effectively (see Corporate

Governance Report on page 76 for further

details of the external evaluation process).

The Committee’s terms of reference address all

matters set out in Disclosure and Transparency

Rule 7.1 and the 2018 edition of the Code and

are reviewed annually by the Committee and

referred to the Board for approval. The detailed

Terms of Reference can be found here: www.

smithsnews.co.uk/wp-content/uploads/

Audit_Committee_Terms_of_Reference_2025.

pdf. If there is any disagreement with the Board

and/or the Executive Leadership Team on any

of the Committee’s responsibilities that cannot

be resolved, the Committee retains the right to

report the issue to shareholders as part of its

report on the Committee’s activities. There are

no such matters to report to shareholders at

this time. In addition, the Committee seeks to

identify matters in respect of which it considers

that action or improvement by the Company

is needed, and appropriate recommendations

are made to the Board as to the steps that

should be taken to preserve and promote the

assurance and integrity of the Company’s

internal controls framework.

Composition and attendance

Members throughout

the year

Committee member

since Meeting attendance

Mark Whiteling – Chair 1 September 2017 4/4

Manju Malhotra 16 January 2025 4/4

Michael Holt 1 October 2018 4/4

Deborah Rabey 1 March 2023 4/4

The maximum number of meetings held during the year that each Director could attend is shown

next to the number attended.

Key matters addressed by the Committee

Financial reporting One of the Committee’s principal responsibilities is to review and report

to the Board on the clarity and accuracy of the Company’s financial

statements (annual and interim), taking into account:

• The application of accounting policies and practices;

• Material accounting assumptions and estimates made by management;

• Any significant judgements and key audit matters raised by the

external auditors;

• The effectiveness of internal financial controls and systems; and

• Compliance with relevant accounting standards and regulatory financial

reporting requirements.

This process resulted in:

• A review of reports from the Chief Financial Officer and the external

auditor on matters of significance in relation to, and the content of, the

Group Financial Statements for the reporting period;

• The approval of the financial results’ press release and the Annual Report

and Accounts, including tone and consistency and the application of

critical accounting policies and key judgements, and consideration

whether the Annual Report, taken as a whole, is fair, balanced and

understandable (see page 101); and

• The approval of the Group’s viability and going concern assessments,

and subsequent disclosures and statements.

Risk management

& controls

• Conducted an annual assessment of risk and internal controls, including

a robust assessment of principal and emerging risks;

• Received information security and data protection reports, including key

measures taken to enhance cyber security controls, to help to mitigate

against IT risks and cyber attacks;

• Received information on climate-related risks;

• Reviewed the external auditor’s report on the Company’s full year and

half year financial statements; and

• Reviewed recommendations to executive management set out in the

external auditor’s management reports.

External audit

matters

• Reviewed the external auditor’s assessment of its objectivity and

independence, including a review of, and prior approval of, non-audit

services (and associated fees) provided by the external auditor as part

of its performance review;

• Reviewed management representation letters related to the Company’s

full year and half year financial statements;

• Reviewed the external auditor’s audit plan, scope and strategy for its

audit of the Company’s full year and half year financial statements; and

• Approved the external auditor’s fees.

Internal audit

matters

• Reviewed and agreed the internal audit work plan, confirming the focus

on key risk areas and adequacy of coverage of material operational

matters and internal controls environment;

• Received reports from the Head of Internal Audit & Risk (see page 67);

and

• Reviewed whistleblowing process and procedures and received

whistleblowing reports providing insight into the culture of the Company

and issues of particular concern to stakeholders.

Strategic Report Governance Financial Statements

Internal controls and risk

management

As part of the Committee’s annual workplan

the Committee has continued to review and

interrogate the Company’s principal and

emerging risks, with no significant changes

to the identification of principal risks or their

ratings from the half year review although we

continue to review the ever-present cyber

security risk to our business which remains as a

critical risk despite positive actions having been

taken to again further reduce the likelihood

of an incident, noting that the impact of any

event, should it ever occur, remains very high.

The Committee also continues to monitor

and review the Company’s internal controls

framework, including the output of Internal

Audit’s activities in the year.

The Company’s internal control and risk

management framework embedded in all

key operations is designed to address all the

significant strategic, financial, operational and

compliance risks that could undermine the

Company’s ability to achieve our business

objectives in the future and is managed within

risk tolerance levels defined and reviewed

periodically by the Board.

The Committee has reviewed the risk

management framework and the system of

internal controls and considers that the system

of internal controls has operated effectively

throughout the financial year and up to the date

on which the financial statements were signed.

A critical element of the Company’s risk

management review is the determination of

the extent to which the Company is willing

to ‘accept’ a level of net risk as part of the

cost of business and in delivering against its

strategy. To this end, the Board’s individual and

collective risk appetite is periodically reviewed,

considering changes in the business and the

external environment, as well as emerging

trends and developing risks. Our risk appetite

differs across the respective principal and

emerging risks, with a lower acceptance

appetite for high impact/high likelihood risks

(seeking to reduce the risk profile and mitigating

its impact where possible) and with a higher

acceptance level for low impact/low likelihood

risks (potentially accepting the risk, with limited

impact mitigation). For further details, please

see the Risk Management Report on page 67.

In determining our principal risks, we review

these in light of materiality considerations and

the resultant risk environment includes threats

to our long-term sustainability, the nature and

complexity of our operations, the commercial

environment in which we operate, and

compliance with laws and regulations. Material

controls are overlaid and are important in the

mitigation of these risks as any failure thereof

could impact the decisions of users of resultant

information. In accordance with the provisions

of the UK Corporate Governance Code, the

Company has in place an internal control

environment to help to protect the business

from these principal and emerging risks

which have been identified. Management is

responsible for establishing and maintaining the

adequacy of these internal controls, particularly

over the integrity of our financial reporting

and the Committee retains responsibility for

ensuring the overall effectiveness of these

controls. Full details of the Company’s internal

control and risk management framework can

be found in the Risk Management Report on

page 67.

Audit Committee Report continued

Illustrations of the key internal controls on which the business relies and the Committee periodically reviews are as follows:

Governance

framework

Our governance framework (see page 81) supports effective internal controls through an approved Schedule of Matters

Reserved for the Board and defined delegated authority.

Risk Management Management regularly review and assess key risks facing the Company, which are documented in risk registers, along with

a schedule of key controls and key risk indicators (see Risk Management Report on page 67).

Financial controls Comprehensive systems of financial control are in place, including an annual budgeting exercise with three rolling forecasts,

as well as a strategic reviews. A range of both preventative and detective controls, including segregation of duties,

reconciliations, approvals, management reviews and exception reporting helps ensure accuracy and completeness of

financial records.

Treasury and

tax controls

Treasury activities are controlled by the Chief Financial Officer, with all large and/or complex transactions discussed in

advance with the Board and Executive Leadership Team and are executed in line with delegated authority levels and

reviewed externally by our advisers.

With regard to taxation, the Group has a governance structure and control framework which is designed to support a low

risk approach and to enable an open and transparent relationship with tax authorities. The delivery of the tax strategy is led

by the Chief Financial Officer who also fulfils the role of the Senior Accounting Officer (SAO). The Company’s in-house tax

team has day-to-day responsibility for the operation of tax processes and controls and is supported by external tax advisors

who are involved in the preparation of corporation tax returns, review the Company’s tax processes and controls and advise

on complex compliance matters. We maintain an open relationship with HMRC and in FY2025 we saw our assessed tax

status move from ‘moderate low’ to ‘low risk’ in all categories.

IT controls IT controls are a fundamental part of the control environment and apply to all applications, databases and operating

systems. They ensure appropriate access to, and integrity of our data, which ultimately flows through to the financial

statements. A robust system of backup is in place to protect against the potential loss or corruption of data against the

backdrop of ever-evolving cyber threats.

Training and staff

awareness

Key policies and procedures are available to our colleagues on SmithsZone, our corporate intranet. Colleagues are required

to confirm their understanding of our key internal policies upon joining the business, and periodically thereafter as required

for compliance purposes. Cyber-risk training is delivered throughout the year to help maintain high levels of staff awareness

and core system training is delivered when new systems are implemented or ways of working are changed. We have a Policy

Steerco in place which ensures that all policies are periodically reviewed and refreshed and specifically includes horizon-

scanning to ensure new policies or amendments are identified and developed to address any changing circumstances. The

Policy Steerco includes members across all operational areas of the business. The Company also operates a Whistleblowing

hotline (see page 96) which facilitates anonymous reporting of any concerns of perceived or actual misconduct, wrongdoing,

or fraud.

External/Independent

evaluation

A range of external and independent evaluation is in place to provide an additional layer of assurance over the effective

operation of key financial controls. Our in-house Internal Audit function performed 20 assurance reviews during FY2025,

which included testing of a range of key financial controls. External advisers with specialist knowledge are engaged on a

case-by-case basis as required, to review particular financial controls. The implementation of recommendations is monitored

by the Committee.

Smiths News plc Annual Report and Accounts 2025

Cyber Security

Cyber security remains a critical focus area for

the business, with ongoing initiatives aimed at

strengthening our security posture across the

entire IT estate.

During the review period the Committee

acknowledged recent high-profile attacks

on multiple UK businesses and additional

measures were taken to safeguard Smiths

News, including technical and procedural

controls. Cyber incident simulations and

specialist training have taken place, and our

response plan has been tested. The ongoing

security assurance program, wider business

continuity testing and awareness training help

to keep the business prepared for current and

future threats.

Some of the key activities this year included

the modernisation of critical systems including

a new warehouse management system and

an integration platform, which has allowed

the business to move away from ageing

systems and which brings enhanced security.

Additionally, the move to a leading 24/7 security

provider for cyber-security services is providing

much greater capability to detect and defend

against threats in real time.

Additional enhancements have been made

to our email and internet secure gateways,

delivering stronger protection against external

cyber threats. Training programmes have also

been deployed to improve colleague vigilance

against social engineering attacks, including

phishing attempts.

The Committee continues to receive

comprehensive bi-annual Information Security

reports from the Technology Director and Chief

Information Security Officer which, in the year,

has included information relating to continual

vulnerability scanning and maturity assessment,

together with progress against an assurance

programme encompassing specialist testing to

validate the effectiveness of our internal security

controls, identify potential weaknesses and

the identification of any issues to be assessed

for risks which can then be prioritised for

remediation and be managed as part of the

Company’s risk management programme.

Artificial Intelligence (AI) – While we remain

alive to both the opportunities as well as the

risks associated with AI, currently it does not

play a significant role in either our business

operations or strategy. That said, we continue

to develop our understanding of potential

roles for AI in our business solutions, while

also looking at areas where it could present

as a significant risk. In this respect, we have

incorporated an assessment of embedded

AI capabilities in our selection criteria when

shortlisting potential suppliers of Future

Technology SaaS solution providers.

Therefore, this played an important

consideration in FY2025 when recommending

the technology partners for both our Warehouse

and Transport Management operational

platforms and the security tools deployed

accelerating cyber-detection and response

with autonomous reasoning and action, thereby

providing the security team with insight and

faster incident resolution. It will be an equally

important consideration when assessing

potential modern cloud data platform providers

in FY2026, including in respect of a planned

modern data stack analytics programme

(which will itself be a key step in creating the

core technology platforms and data required

to enable more progression in this area).

Furthermore, we currently have an approved

‘Use of Generative AI’ policy addressing these

matters within the business and to guide

colleagues in the moderated use of AI. We

will continue to develop this approach as

technologies evolve.

Health and Safety

Our approach and commitment to health

and safety continues to be structured around

a formal Occupational Health & Safety

Management System (OHSMS) aligned to

ISO 45001. This provides the governance

framework through which risks are managed,

incidents are investigated, and continual

improvement is assured. Certification to ISO

45001 was successfully maintained in FY2025

following a BSI surveillance audit, with no non-

conformities identified.

FY2025 marked the first year of our three-

year Health & Safety journey – Build, Rise,

Lead. The purpose of this plan is to strengthen

foundations, embed consistency across the

network, and set a clear path for continual

improvement:

• Year 1 – Build (FY2025): establish strong

foundations through improved reporting, risk

assessment and control processes, and the

roll-out of a paperless safety management

system.

• Year 2 – Rise (FY2026): enhance performance

by using data-driven insight, strengthening

colleague engagement, and embedding

investigation and corrective action processes.

• Year 3 – Lead (FY2027): position Smiths

News as a leader in health and safety

culture, benchmarking externally and driving

innovation in risk management.

In this first year, we have prioritised embedding

consistent safety practices across our

operational activities. This included launching

new risk assessments and safe system of

work processes, introducing enhanced

materials handling training for colleagues, and

implementing digital reporting platforms to give

full visibility of compliance. These initiatives

provide the framework for further improvement

in incident prevention and cultural maturity.

Through a combination of a clear strategic

roadmap, a certified management system, and

active employee engagement, the Company

continues to demonstrate its commitment to

safeguarding colleagues and embedding a

culture of safety across all operations.

Reporting of Injuries, Diseases and

Dangerous Occurrences Regulations

(RIDDOR)

The Company continues to monitor and manage

its reporting of incidents and accidents however

minor they may be, with a robust process of

investigation (including root cause analysis

and human factors) before the incident is

considered closed.

The lost time frequency rate (LTFR - rate of

lost time injuries per 100,000 working hours)

for FY2025 was 0.31 (FY2024: 0.38) against a

target of 0.32.

Our total accident frequency rate (rate of injuries

per 100,000 working hours) was 1.84 against

a target of 2.5, which reflects a 19% decrease

year-on-year (FY2022: 2.64, FY2023: 2.44,

FY2024: 2.29).

Reporting of Injuries, Diseases and Dangerous Occurrences Regulations

(RIDDOR)

FY2025 FY2024 FY2023 FY2022

Specified injuries 2 3 1 0

Injuries resulting in over seven days’

absence from work 1 2 3 2

Dangerous diseases resulting in over seven

days’ absence from work* 0 0 0 0

All RIDDOR 3 5 4 2

* We have seen a 40% decrease in RIDDOR reportable incidents year-on-year dropping from 5 to 3 in FY2025.

Strategic Report Governance Financial Statements

Sustainability Assurances

Following on from the extension of the

Committee’s mandate to cover oversight of

sustainability data, this year saw the completion

of a project dedicated to ensuring that we

collect and report the most accurate data

across all of our sustainability pillars (see the

Sustainability Report on page 42). This review

of this data has led to the mapping of all

data-collection processes which has provided

assurances to the Committee in respect of

the ongoing accuracy as well as the reliability

of the underlying processes. While some

shortcomings have been identified in some data

and processes, these have been addressed

to the Committee’s satisfaction. Further

investment in new IT systems (warehouse

management and transport management

systems) will further support the ability to

replicate data more accurately and repeatably

going forward.

Where data gaps were identified, these have

now been corrected and rebased comparator

years in line with regulations/guidance. See

the Sustainability Report on page 42 for

further details.

Bribery, fraud, anti-trust and

whistleblowing

Across the Company we endeavour to embed

a culture and environment in which workplace

concerns can be raised and addressed without

fear of recrimination. We have an independent

whistleblowing process comprising both a

hotline and reporting process, with multiple

language capability, that is available 24 hours

a day, 7 days a week. This confidential hotline

enables colleagues to anonymously report any

suspected incidences of fraud, bribery, modern

slavery or non-compliance with Company

policies, practices, or breaches of law. All such

incidences are assessed and categorised

according to severity and risk by the People

Services team, which includes the appointment

of an investigating manager. This approach is

integral to our policies and procedures, further

supported by training for managers and a

zero-tolerance approach to serious breaches.

Regular reviews ensure that updates are

made in response to business initiatives and

legislation; any significant changes are noted

and discussed with the Executive Leadership

Team and the Board.

The Committee received quarterly reports

on incidences of whistleblowing or other

malpractices reported across the business.

A total of seven incidences arose in the

reporting period, but no such instances were

material or of significance to the Company.

Overall, these risk management processes

each aid and improve the identification of,

and mitigating actions to prevent and report,

incidences of suspected fraud, tax evasion,

data breaches, bribery, modern slavery or other

forms of malpractice.

The Committee is also responsible for reviewing

the Company’s bribery and fraud detection

systems and controls to ensure the prevention

of any inappropriate behaviour. The Company

has both Anti-Fraud and Anti-Bribery policies

in place, each of which are reviewed annually

by the Board. Separately, the Company has

adopted a public statement reaffirming our

zero tolerance stance in this regard, which

is available on our website – Bribery and

Corruption Statement. In addition, approval

procedures are in place for the acceptance and

management of gifts and corporate hospitality

across the business which are aligned to the

Company’s Delegation of Authority matrix. All

allegations of corruption are investigated by

independent persons, and our whistleblowing

hotline is accessible for the reporting of any

allegations of corruption, with the additional

option to directly contact either our Internal

Audit or legal departments as alternative

confidential lines of reporting. Both our

payment systems as well as our expense

claims processes maximise the identification of

possible corruption and these form part of both

the internal and external audit mandate.

In support of the prevention of anti-competitive

practices including market-collusion, abuse

of a dominant position, price-fixing and/or

the illegal sharing of competitive information,

we have a Competition Law Policy (which is

available on our website) which is reviewed

annually by the Board. Any allegations of

anti-competitive behaviour are reported and

addressed in the same manner as instances

of bribery and corruption and may be directly

addressed with either our Internal Audit or

legal departments. We have a regulatory

compliance certification process which must

be completed annually by senior colleagues as

confirmation that no anti-competitive practices

have taken place in the year and that required

training has been undertaken where applicable

with their respective teams. Overall, these risk

management processes each aid and improve

the identification of, and mitigating actions to

prevent and report, incidences of suspected

fraud, tax evasion, data breaches, bribery,

modern slavery or other forms of malpractice.

Audit Committee Report continued

Reports received

Reports

investigated

and closed

Outstanding

investigations

Whistleblowing

FY2025 7 7 0

FY2024 7 7 0

FY2023 8 8 0

Smiths News plc Annual Report and Accounts 2025

Significant financial statement reporting issues

The Committee has considered each of the following items listed below based on discussions with, and submissions by, management and satisfied

itself as to the accounting treatment and presentation thereof, including disclosure within Note 1 to the Group Financial Statements. The most

significant items were discussed with the external auditor during the planning stage and on completion of the audit. The key judgements and

estimations in relation to the FY2025 financial statements were:

Area Matter considered Outcome

Going concern

and viability

The Committee reviewed and challenged executive

management’s assessment of forecast cash flows over the

relevant assessment periods, which were 18 months for going

concern and 36 months for viability from the accounting

reference date (16 months and 34 months respectively from

the date of approval of the Group Financial Statements).

The Committee considered the sensitivities within trading

and expenditure plans, including a reverse stress test and five

reasonable worse case downside scenarios which were linked

to the principal and emerging risks as detailed on page 67.

The Committee further reviewed the assumptions relating to

material events occurring before the end of the assessment

period, notably the renewal of publisher contracts. The

refinancing of the Company’s debt facilities that occurred in

May 2024 and has now been extended to May 2028, with the

option of a further extension to May 2029, was also considered

in this assessment.

The Committee concluded that the assumptions used in the

assessments and the periods of assessment were appropriate.

In reviewing the Group’s reverse stress tests, the Committee

challenged executive management as to the likelihood of any

such scenario occurring, to assess whether it was reasonable

to assume that the likelihood of any such scenario was

remote. Factors that were considered included the current

trading performance of the business compared with the base

case, the extent of revenue and operating profit decline that

could impact the going concern of the Company and current

expectations as to the severity of any inflationary impacts on

cash flows.

The Committee further concluded that appropriate

consideration had been made of principal and emerging risks

through the inclusion of the five downside risk scenarios and

reverse stress test.

The Committee noted the current level of average and peak

debt and cash, the Company’s debt financing facilities and the

factors set out above to help it conclude that the application

of the going concern basis for the preparation of the Group

Financial Statements continues to be appropriate and

therefore agreed the Group Financial Statements should be

prepared on a going concern basis and recommended the

approval of the Viability Statement.

This disclosure in respect of going concern is set out in Note 1

to the Group Financial Statements on page 143.

IFRS 15 –

Revenue

Recognition

The Committee considered the appropriateness of accounting

for revenue from the wholesale distribution as principal rather

than as an agent.

The Company is considered to be the principal based on the

Company possessing credit risk of default by the customer

together with the following indicators of control over its

inventory: discretion to establish prices; it holds some of the

risk of obsolescence once in control of the inventory; and it has

the responsibility of fulfilling the performance obligation on

delivery of inventory to its customers.

Revenue from the delivery of wholesale products is recognised

when the products are delivered to the retailer and there is no

unfulfilled obligation that could affect the retailer’s acceptance

of the products, and the risks of obsolescence and loss have

been transferred to the retailer.

The Committee also considered other revenue streams

and concluded that the same accounting treatment applies

for these activities as applied for wholesale distribution in

respect of the point at which revenue is recognised and the

performance obligation has been met.

The Committee was satisfied that appropriate consideration

had been made of the following factors which influence

determination of principal/agent:

• primary responsibility for fulfilling the promise to distribute

wholesale products, and perform services, is with Smiths

News which is responsible for the timing of delivery, bearing

risk of loss or damage and dealing with retailer complaints.

• Smiths News also bears inventory risk noting the customer

has a right of return and associated credit risk of default by

the customer.

• Smiths News has the discretion to establish prices with

retailers including wholesale discounts.

Strategic Report Governance Financial Statements

Audit Committee Report continued

Area Matter considered Outcome

Carrying value

of investment

held by Smiths

News plc in its

subsidiary

The Committee considered management’s conclusion that

an impairment of the investment carrying value held by the

Company in its subsidiary should be recorded.

It was noted that the Company’s net investment had increased

significantly due to the receipt of intercompany dividends,

which is an indicator of impairment.

The following indicators of impairment or reversal of

impairment were identified as present:

• increase in the risk-free rate (impairment);

• the Company’s market capitalisation being below the

investment carrying value (impairment); and

• lower net liability position (reversal).

The Committee also reviewed changes to the impairment

assessment calculation, including the identification of

components of the Group’s cash flows, revision of terminal

growth calculations, and discount rates.

The Committee received detailed reports from executive

management outlining valuation methodology, identification

of component cash flows, the basis for key assumptions (e.g.

discount rate and terminal growth/decline rate), the key drivers

for cash flow forecasts and the sensitivity of the assumptions

used.

After careful deliberation and challenge, the Committee

was satisfied that these assumptions and the disclosure of

sensitivities were appropriate.

The Committee agreed with management’s conclusion that

a £178.1m impairment of the investment should be made.

Alternative

performance

measures

(APMs) and

adjusted items

The Committee closely monitored management’s

interpretation and definition of APMs, with focus on adjusted

items. The Committee continues to review and challenge the

classification of adjusted items in line with the Company’s

defined policy. The Committee also ensures sufficient

involvement from external auditors in challenging management

to ensure an appropriate level of judgement is exercised in

their assessment.

The Committee considered the appropriateness of the

measure of adjusted profits, quality of earnings, and the

classification and transparency of items separately disclosed

as such.

The Committee also considered the presentation of APMs

in the Annual Report and Accounts in the context of the

requirement that they are fair, balanced and understandable.

The Committee was satisfied that the presentation of APMs

and adjusted profits provides a reasonable view of the

underlying performance of the Company and that there was

transparent and consistent disclosure of the items shown

separately as adjusted items.

The definition of APMs can be found in the Glossary on

page175. The accounting policy on adjusted items is set out in

Note 1 to the Group Financial Statements on page 144.

Property

provisions

The Committee reviewed the methodology used to calculate

property provisions as at period end and, in particular, the use

of historic settlements, forward inflation curves and discount

rate within the assessment.

The Committee agreed that the property provisions held were

appropriately recognised and measured.

Contingent

Liabilities

The Committee reviewed correspondence with the Pensions

Regulator (tPR) and external legal advice in relation to tPR’s

ongoing formal investigation into the Tuffnells defined benefit

pension scheme and the Company’s period of ownership

of Tuffnells. The Committee considered how the investigation

should be accounted for and disclosed in the Group

Financial Statements.

The Committee agreed it was appropriate to account for the

matter as a contingent liability and that the disclosure fairly

sets out the Company’s assessment.

Smiths News plc Annual Report and Accounts 2025

Regulatory changes and adoption

of new accounting standards

There have been no significant changes in

accounting standards in the reporting period

which are expected to materially impact the

Company. However, we remain alert to any

such changes and regularly receive updates

on upcoming changes from both the external

auditor and management.

The Committee continues to prepare for

the forthcoming changes to the Corporate

Governance Code, in particular to Provision 29,

applicable from 1 January 2026 (for reporting by

the Company with effect from August 2027) in

relation to the monitoring of the Company’s risk

management and internal control frameworks,

a review of their effectiveness vis-à-vis financial,

operational, reporting and compliance controls

and to report on each within the Company’s

Annual Report. The Company has commenced

a process-based gap analysis of its risk

management and internal control framework,

which extends to identifying and mapping key

processes, agreeing materiality thresholds

and testing associated controls as well as

any reassessment thereof, ahead of detailed

disclosure within future reports.

External audit

Independence

BDO was appointed as external auditor

following a competitive tender process in

January 2019. In light of Articles 16 and 17 of

the EU Audit Regulation (as it forms part of the

law of England and Wales by virtue of section

3 of the European Union (Withdrawal) Act

2018), the Company will put the external audit

contract out to tender at least every ten years

and will mandatorily rotate audit firm every 20

years. The Committee acknowledges that in

line with professional standards, BDO has a

policy of rotating the lead engagement partner

every five years. Oliver Chinneck was appointed

as the lead partner at the end of the FY2023

audit but as Oliver had previously served five

years as a supporting partner he is therefore

only permitted to serve as lead partner for

two years in line with the independence and

ethical standard requirements. As a result,

Oliver is required to rotate off the account

at the completion of the FY2025 audit, with

Emma Jarvis to assume the role of Group audit

partner for FY2026 onwards. The Committee

considers the objectivity and independence

of the Auditors taking into account the tenure

of both the audit company as well as the lead

auditor as set out above but also noting the

independence confirmation by the Auditors

in accordance with the Financial Reporting

Council’s (FRC) Ethical Standards, how they

have demonstrated professional scepticism and

challenged management where necessary as

well as how they have identified risks applied to

their audit processes.

Focus

• BDO present the audit plan (strategy and

scope) for the financial year under audit,

with key audit matters highlighted for special

attention;

• Progress reports against the audit scope

allows the Committee to monitor progress

and raise any questions and to challenge both

management and BDO;

• The Committee discusses, both internally

and with BDO, the level to which BDO

have demonstrated professional scepticism

and challenge of management’s position,

specifically regarding estimations and

judgements;

• Private meetings between the Committee

and BDO are held regularly to encourage

transparent feedback; and

• Review of feedback from Committee

members, including views on how BDO has

supported the work of the Committee and

communicated with the Committee.

Formal evaluation

At the completion of the financial reporting and

audit process a formal evaluation process is

undertaken each year, which includes a written

questionnaire distributed to each member of

the Committee, the Chief Financial Officer

and senior financial controllers from across

the business. Subsequently, the Committee

holds a dedicated session to discuss the

collated responses, including any learnings and

suggested areas for improvement, with BDO

being afforded an opportunity to comment on

any relevant findings and outcomes.

Key areas of focus in the evaluation of the

external audit included:

• the external auditor’s processes for its review

of the Board’s accounting judgements;

• understanding of key accounting matters and

issues;

• independence and objectivity;

• the expertise and technical knowledge of the

external audit teams;

• the scope, delivery and execution of the

external auditor’s audit plan;

• a review of the completeness, quality and

timeliness of the audit;

• a review of the robustness and perceptiveness

of the external auditor; and

• a review of formal reporting to the Committee.

Non-audit services

The Company has a formal policy on its

relationship with the external auditor to ensure

that the external auditor’s independence is

not impaired. Following regulatory changes

and in light of the introduction by the Financial

Reporting Counsel (FRC) of a new 2019 ethical

standard (which applied with effect from March

2020), in FY2020 the Committee reviewed

the revised ethical standard and amended

our non-audit services policy at that time. In

doing so, we removed the previous de minimis

financial approval limits for non-audit services

and adopted a ‘whitelist’ of non-audit services

which may be provided by the external auditor

in adherence to the new ethical standard.

No changes have been made this year and,

therefore, going forwards, the approval of both

the Audit Committee Chairman and the CFO

will continue to be required in respect of all

non-audit service engagements and, as part

of such approval process, where the maximum

combined spend is likely to exceed 50% of the

annual audit fee in any financial year, there is an

express requirement to engage with the external

auditor in order to ensure absolute compliance

with the latest standards.

Audit Exemption

For the 52-week period ended 30 August 2025

the following wholly owned subsidiaries of

the group are entitled to exemption from audit

under section 479A of the Companies Act 2006.

Smiths News plc is the ultimate parent company

of these subsidiaries and has unanimously

agreed to the adoption of the exemption and

to the granting of the guarantee in accordance

with section 479A of the Companies Act 2006:

• Dawson Holdings Limited –

Reg No: 00034273

• Martin Lavell Limited – Reg No: 02654521

• Smiths News Investments Limited –

Reg No: 06831284

• Dawson Media Direct Limited –

Reg No: 06882366

Fees

Fees paid to BDO during the year in respect of

non-audit services support for the Company’s

interim financial results amounted to £77,600

(FY2024: £65,800). The Committee considered,

and was satisfied that, it was appropriate for

BDO to undertake this work and that doing so

did not affect their independence. Details of the

total fees paid to BDO during the year in respect

of audit and non-audit services are shown in

Note 2 to the Group Financial Statements.

Strategic Report Governance Financial Statements

Audit Committee Report continued

Board approval

Prior to the Board’s approval of the period-end

Group Financial Statements, the Committee

provided its view to the Board on the outcome

of the statutory audit, explaining management’s

key accounting issues and judgements; the

outcome of the auditor’s assessment of key

audit matters; other areas of audit focus and

control deficiencies (if any); and how the

statutory audit contributed to the integrity

of the financial reporting process.

Conclusion

Following its review, the Committee concluded

that it was satisfied that the external audit

process had been independent, objective

and effective, with the Committee’s review

concluding that:

• it was satisfied with the quality and

independence of the BDO audit partner

and team;

• BDO had undertaken an appropriate level of

analysis, discussion and review of relevant

management papers and underlying

assumptions of the going concern and viability

statements to demonstrate the adequacy and

sufficiency of professional scepticism, audit

challenge and critical assessment;

• the audit was well planned and executed

on time, with key findings appropriately

addressed; and

• BDO had a good understanding of the

business and its internal control systems and

reported in a clear and open manner.

Internal Audit

The Internal Audit function is an integral

part of the Company’s governance and risk

management framework, as well as undertaking

detailed reviews of the Company’s internal

system of controls which thereby assist the

Committee, and the Board, to manage risk

effectively and to protect the reputation, assets

and overall sustainability of the Company

through assessing whether the appropriate risks

have been identified, reported and managed.

The Committee monitors and reviews the

scope and effectiveness of the Internal Audit

function and ensures it acts within the purpose,

remit and authority as set out in its approved

Internal Audit Charter, which itself is reviewed

annually. To ensure such effectiveness the

Head of Internal Audit & Risk has unfettered

access to executive management as well as the

Committee and the chair of the Committee, and

as mentioned earlier, has opportunities to meet

with the Committee in private.

Each year, the Committee considers and

approves the internal audit workplan, which

is designed to focus on identified key risks

to ensure that they are managed effectively

within the context of the Company’s business

objectives and risk appetite, and that

appropriate internal controls are in place.

The Committee will consider deviations from

plan should the need arise and usually only in

response to a material change in the risk profile

highlighted through audit reports and/or as a

result of a matter raised either by management

or through a whistleblowing report.

Reports are provided to the Committee at

each meeting, including updates on activities,

resourcing levels, progress against plan, results

from audits carried out and management’s

response to address any areas highlighted for

improvement and timeliness thereof. The 20

audits scheduled for the review period were

successfully completed in a timely manner

and included the deferment of two audits and

the addition of one injected audit, with no

audit outcomes indicating an unacceptable

conclusion. This has resulted in the Committee

being satisfied that an effective review of the

control framework and governance processes

has taken place across the selected areas of our

business and that, from an audit and assurance

perspective, the Committee is satisfied that

an adequate assurance process is in place in

relation to the nature of the narrative disclosures

in this Annual Report.

The process for the performance evaluation

assessment of the Internal Audit function was

reviewed in the year, with the questionnaire

used being subject to some minor rephrasing

of questions and being further enhanced

by the introduction of a new Internal Audit

effectiveness questionnaire for completion

by the Executive Leadership Team members

who had experienced internal audits in their

functional areas in the financial year under

review. The reviews indicated that the function

is performing effectively and in accordance with

good corporate governance principles.

Going concern and viability

assessment

The Committee also reviewed a paper prepared

by the Chief Financial Officer to support the

going concern and viability assessment referred

to on page 65. The Committee noted that the

Company had £38.5m of available facilities at

the end of the reporting period and achieved

(0.1)x leverage covenant of bank net debt/

(cash) to Bank EBITDA. With current facilities

in place until 2 May 2028 (with the option to

extend for a further year, to 2 May 2029), the

Company has a strong platform to continue in

operation for the foreseeable future. On this

basis and the evaluation of the impact of a

number of sensitivity scenarios, the Committee

concluded in its recommendation to the Board

that the profit and cash forecasts supported the

view that the business continues to be a going

concern and can meet its liabilities as they

fall due for a period greater than 12 months

(being the going concern assessment period

of 16 months) from the date of approval of the

Group Financial Statements and that there

is also a reasonable expectation that the

Company will remain viable over the period

of assessment for viability to August 2028.

The viability statement on page 65 sets out

further details on the process applied in

relation to this assessment.

100

Smiths News plc Annual Report and Accounts 2025

Fair, balanced and understandable

In line with the Committee’s responsibility for

ensuring there are robust financial reporting

procedures and internal controls in place,

and the UK Corporate Governance Code

requirement for the Committee to advise the

Board in relation to the Annual Report and

Accounts, in particular whether, taken as a

whole, it is fair, balanced and understandable,

the Committee undertook an assessment of

the 2025 Annual Report and Group Financial

Statements. This incorporated the work

undertaken by the Committee throughout the

year to monitor financial reporting.

The process and outcome are set out opposite.

Oversight throughout the year

• Review of applicable accounting policies and pronouncements and their application

• Review of regular financial results and announcements

• Reports from the Chief Financial Officer, BDO and Company Secretary & General Counsel

• Reports from Internal Audit

Review Included

• Provision of outline plan including content and structure, design concept and timetable

• Consideration of regulatory and governance requirements for reporting

• Review of detailed reports from the Chief Financial Officer and BDO providing the opportunity

for debate and challenge

• Summaries of areas where management judgements or significant accounting estimates had

been made

• Monthly Board meetings where the management accounts and KPIs were each reviewed to

ensure that the Company’s financial, operational and commercial performance was appropriately

assessed, reported and understood

• Consideration of going concern and longer-term viability

• Separate meetings with BDO without management present

Review Confirmed

• Well-documented planning and procedures for the preparation of this report

• Collaborative approach between all parties required to contribute to this report

• Basis of preparation consistent with financial reporting throughout the year

• All significant issues had been considered

• Messaging was consistent, particularly the narrative disclosures reflecting financial and ESG data

Conclusion

• After completion of the detailed review, the Committee was satisfied that:

– taken as a whole, the Annual Report and Group Financial Statements in FY2025 are fair,

balanced and understandable; and

– the Annual Report accurately reflects the information shareholders would require in order to

assess the Company’s position and performance, business model and strategy

Recommendation

• The Committee reported its findings and conclusions to the Board.

Approval

This report was approved by the Audit Committee and signed on its behalf by:

Mark Whiteling

Audit Committee Chair

3 November 2025

Strategic Report Governance Financial Statements

101

Nominations Committee Report

Chairman’s introduction

On behalf of the Nominations Committee,

I am pleased to present the report for FY2025,

which details our activities during the year,

which primarily included changes in our

Board composition and within broader

leadership structures.

In terms of Board composition, Denise Collis

stepped down from the Board at the AGM

held in January 2025 and Manju Malhotra was

appointed at the first meeting of the Board

following the AGM. Manju has thus completed

her first year on the Board and shareholders will

have an opportunity to vote on her appointment

for the first time at the forthcoming AGM to be

held in January 2026. I am pleased to report

that Manju has provided good input to all Board

decisions and activities since her appointment

and her full biography is available in the

Corporate Governance Report (see page 76).

In March 2025 we also announced that Paul

Baker (Chief Financial Officer) had tendered

his resignation. Paul will leave the business in

November 2025 in order to join a large private

business, operating in a different sector. Paul

has made a significant contribution during his

time with the business and is leaving us in a

strong financial and operational position and we

wish Paul good luck for his future endeavours.

The Company commenced an immediate

search for Paul’s successor, and I am pleased

to confirm that in July 2025 we announced that

Richard Clay would be joining the Company as

CFO. Richard is expected to join the Company

on 2 February 2026. More information is

available on both the recruitment process and

Richard himself, below.

We have also seen some changes in our

executive leadership team, with Phil White

retiring in September 2025. Phil has been with

the business since June 1990 and headed

our Dawson Media business which supplies

airlines and travel points with printed and

digital media products globally. More recently,

Phil stepped up to lead our reverse logistics

recycling proposition which has now been firmly

established as one of our new verticals in the

form of Smiths News Recycling.

With the expected departure of Phil, it was

decided that our recycling business would

benefit from a dedicated commercial and

compliance expert in the sector and thus

in July 2025 Adam Wylie joined the business

as the new managing director of Smiths News

Recycling.

As with last year, we have again taken strides

to present our Annual Report in a more concise

and integrated manner without repetition of

information. To this end, I would direct you to

the Stakeholder Engagement, Sustainability

and People Reports (see pages 32, 42 and 28)

respectively to read more about our approach

to colleague engagement surveys and training.

The Board’s engagement process with our

wider workforce continues through the

Board’s representative Non-Executive Director

Michael Holt, who attends National Colleague

Engagement Forum meetings together with

ad hoc informal get-togethers with colleagues

either in person or remotely and reports back

to the Board accordingly. We remain of the

view that this process best meets the needs of

our business and ensures that the views of our

colleagues are appropriately communicated

back to the Board and considered in our

decision-making. Accordingly, we will continue

to adopt this approach going forward.

This year, the Company has made good

progress in promoting diversity and inclusion

throughout the business, including at Board-

level. I have dealt with this in some detail in my

statement on the introduction to governance

and thus would refer you to that section which

can be found on page 74.

Finally, I would like to welcome Richard to

the Board as we bid farewell to Paul with our

sincere appreciation for his valued contribution

and we wish him well in his future endeavours.

Further information on the Committee can also

be found in the Corporate Governance Report

on page 76.

David Blackwood

Chairman

3 November 2025

David Blackwood

Nominations Committee Chair

102

Smiths News plc Annual Report and Accounts 2025

Board composition, succession

and attendance

The Committee continues to review and take

into consideration the current established

composition of the Board against the spread

of anticipated Board retirement dates (as

set out on the next page) and this year has

taken positive steps to ensure and promote

continuity in anticipation of the expectation

that Mark Whiteling will step down and retire

from the Board at the conclusion of the 2027

AGM in line with the ‘nine-year independence’

provision applicable to non-executive directors

pursuant to the UK Corporate Governance

Code provisions. Accordingly, following the

2025 AGM, Manju Malhotra was appointed

as independent Non-Executive Director (also

assuming the role of chair-designate to the

Audit Committee) and will work alongside

Mark to ensure a smooth transition. With the

retirement from the Board of Denise Collis at

the conclusion of the 2025 AGM, Michael Holt

took up the role of chair of the Remuneration

Committee, which position he has ably fulfilled.

As explained in my governance introduction

and in line with our commitment to D&I,

as we look at future non-executive director

recruitment, including the appointment of the

Senior Independent Director (SID) upon Mark’s

retirement from the Board, we will endeavour

to ensure that candidate lists are compiled

from a broad and diverse range of candidates.

All directors are required to put themselves up

for annual re-election at each AGM as part of

the conditions of their appointment with the

staggering of the respective tenures of Directors

ensuring a period of stability and continuity on

the Board and which helps naturally to ensure

the robustness of the Company’s succession

planning processes for the future.

Activity in FY2025

The key responsibilities of the Committee

are to lead the process for Board

appointments, having due regard to

Board diversity, oversee the induction of

new members, ensure orderly succession

planning so as to maintain an appropriate

balance of skills and experience on

the Board and to review any training

requirements of Board members. The

detailed roles and responsibilities of the

Committee can be found in the Terms

of Reference which are published on

our website.

Key matters addressed by the

Committee

October 2024

• Received reports on talent review and

succession planning for the Executive

Leadership Team as well as retention

strategies

• Received a Diversity and Inclusion

update

• Received an update on the search

process for a new Non-Executive

Director

June 2025

• Considered and approved the

appointment of our new CFO

Composition and attendance

Members throughout

the year

Committee member

since Meeting attendance

David Blackwood – Chair 13 May 2020 2/2

Mark Whiteling 1 September 2017 2/2

Manju Malhotra 31 January 2025 2/2

Michael Holt 1 October 2018 2/2

Deborah Rabey 1 March 2023 2/2

1 The maximum number of meetings held during the year that each Director could attend is shown next to the number attended.

The composition of the Committee meets the 2018 UK Corporate Governance Code requirement

that the majority of members are independent non-executive directors.

The Committee met twice during the year and all Committee members attended all meetings.

At the invitation of the Committee, certain executive directors and management attended the

meetings from time to time.

The detailed roles and responsibilities of the Committee are set out in the Terms of Reference which

can be found here: www.smithsnews.co.uk/wp-content/uploads/Nominations_Committee_

Terms_of_Reference_2025.pdf

Strategic Report Governance Financial Statements

103

Board composition, succession and attendance

Name Date of appointment

Date of intended Board

retirement – on or before

Last AGM for annual

re-election

Mark Whiteling 1 September 2017 January 2027 AGM January 2026

Michael Holt 1 October 2018 January 2028 AGM January 2027

David Blackwood 13 May 2020 January 2030 AGM January 2029

Deborah Rabey 1 March 2023 January 2033 AGM January 2032

Manju Malhotra 31 January 2025 January 2035 AGM January 2034

This year an external Board evaluation process was undertaken in line with the FRC’s Guidance on Board Effectiveness three-year rule and as this

has been covered in Corporate Governance Report I do not intend to repeat it here and would refer you to page 86 for the details. It is, however,

worth repeating that the Board and its Committees was found to be operating effectively and in accordance with good corporate governance principles,

with no significant problems identified. The chemistry of this Board – or its culture, as they are closely related, is good, stemming from the executive

leadership of the Company, combined with a good rapport between myself, as chair, and the CEO. As part of the evaluation assessment process,

individual sessions were held between the Chair and all Directors, with the SID responsible for the Chair’s evaluation. As part of this process, we

focussed on ensuring all directors met, and continue to meet, the expectation of being able to devote the required amount of time and energy to the

business of the Company. We also discussed any developmental and training needs, opportunities and shortcomings against the Board’s current

skills, experience, expertise and composition, ensuring that the Board possesses the right blend of skills, expertise, commitment and experience.

Any identified shortcomings are to be routinely considered as part of succession planning while also striving to reflect today’s talent and customer

pools to build balanced leadership.

Chief Financial Officer appointment

The process for the identification and appointment of new Directors is formal, rigorous and transparent:

Following Paul Baker’s resignation in March 2025 a recruitment selection process was commenced with the development of a detailed role

specification and the appointment of Odgers via a targeted tender process to assist with the search process to identify possible suitable candidates.

The job specification and role requirements were considered and approved by the Committee, with the focus on a candidate with a strong commercial

and financial background. The Committee considered the benefits of diversity, including gender and ethnicity amongst the requisite skills, knowledge,

attributes and experience necessary to meet the demands of the position, and the Company as a whole. The initial ‘long list’ of candidates included

people from diverse backgrounds with such candidates also being taken forward to the second stage shortlisting. The interview panel included the

Board Chairman, the Chief Executive Officer and the Senior Independent Director, with skills, knowledge and attributes being identified as primary areas

of differentiation and prioritisation, with the importance of cultural alignment and experience also acknowledged as being important. The successful

candidate was selected because of his greater breadth of experience, including the fact that he had been operating as an interim CFO in a listed

environment, he had a good track record of strategic problem solving and was seen to be a good fit with the Smiths News culture. Prior to the final

decision the recommendation was shared with the Nominations Committee. Finally, on 31 July 2025 the Company duly announced that Richard Clay

would be appointed Chief Financial Officer and a Director of the Board, effective from his starting date with the Company which is expected to be

2 February 2026.

Richard has extensive experience in senior finance and strategic roles across financial and support services. He is presently employed by ZIGUP plc,

a leading integrated mobility solutions provider, where he currently holds the role of Interim CFO and UK&I Group Finance Director. Prior to his role at

ZIGUP, Richard held several FD and CFO roles at Barclays, in the Business and Corporate Banking divisions. He is a qualified accountant and began his

career with Deloitte, spending eight years in their Corporate Finance division focused on strategic change.

The Committee can confirm that Odgers has no other connection with the Company or the directors, that all selection decisions were based on merit

and that all recruitment activities were fair and non-discriminatory.

Nominations Committee Report continued

Executive search

consultant is

appointed

Initial and second

interviews are held

with members of

the Board

Following

recommendation

by the Committee,

the Board appoints

the new Director

Comprehensive

profiles are

prepared and

considered,

references

checked, and

candidates

shortlisted

Following a review

of the required

skills, knowledge,

experience and

diversity, detailed

job specifications

are prepared

Immediately

following

appointment,

the relevant

announcements are

made to the market

Process for the identification and appointment of new Directors

104

Smiths News plc Annual Report and Accounts 2025

Talent management and

succession planning

We operate a structured talent management

process for our most senior leaders, conducted

twice annually across the business and

reviewed annually by the Committee. This

process assesses both performance and

potential, ensuring that individuals, particularly

those identified as high potential, have

tailored development plans in place. These

insights directly inform our organisation-wide

succession planning efforts, which considers

both short-term coverage and long-term

appointments, acknowledging that these may

involve different individuals.

As part of this approach, we continue to

map our talent pool and provide targeted

development support to enable proactive

succession planning for critical roles. This

includes building a diverse pipeline of future

leaders. We recognise that career progression

and personal development are essential for

attracting and retaining top talent. To support

this, we have continued to actively promote

initiatives such as our ‘Trusted Leadership’

programme along with broadening out our

‘Leading Through Change’ programme, which

has been particularly well received.

A core ambition remains our commitment to

development for all. By supporting colleagues

in their personal growth journey, we aim to

cultivate a robust pipeline of talent capable

of stepping into senior and executive roles,

alongside developing the core skills within

the business which will ensure our continued

success. An example of this is our Operational

Excellence programme which has gathered

momentum this year, with two cohorts of

colleagues commencing apprenticeships to

support the roll out of the programme which

is focused on continuous improvement through

systematic optimisation of processes, systems,

and culture to achieve strategic objectives and

deliver superior customer value.

For further details on our progress toward the

‘development for all’ ambition, please refer to the

People Report on page 28.

Diversity and Inclusion

This topic has already been addressed in

some detail within the Chairman’s Introduction

to Governance on page 74, the Corporate

Governance Report on page 76 as well as in

the People Report on page 28 and therefore

it is not proposed to replicate this information

here, but we would direct the reader to the

aforementioned references as part of this report.

We remain committed to being a business

that is welcoming to people from all walks of

life, providing everyone with the opportunity

to become the best version of themselves.

We highlight the importance of Diversity

& Inclusion throughout the whole of our

recruitment process, ensuring that appropriate

tools and materials underpin the integrity of the

process. This is an approach applicable to all

roles across the business, up to and inclusive

of the Executive Leadership Team. We have a

dedicated D&I Manager as well as a number of

network groups under our ‘Everyone In’ banner,

made up of colleagues across the business and

dedicated to supporting such groups as Mind

Matters, Pride News, Women in News and

Beyond Barriers which champion accessibility

and understanding, further supporting Smiths

News to become a Disability and Carer

confident employer.

Approval

This report was approved by the Nominations

Committee and signed on its behalf by:

David Blackwood

Nominations Committee Chair

3 November 2025

Strategic Report Governance Financial Statements

105

Directors’ Remuneration Report

Shareholder letter from the

Chair of the Remuneration

Committee

Dear shareholder

On behalf of the Board, I am pleased to present

the Remuneration Committee’s report for the

year ended 30 August 2025, my first as the new

Chair of the Remuneration Committee, having

been appointed as a result of Denise Collis’

retirement from the Board following the expiry

of her nine-year term at our AGM held on

16 January 2025.

Backdrop to the operation of the

policy and our performance in FY2025

FY2025 represented a year of strong

performance across the Group, underpinned

by the resilience of our news and magazines

business. Trading was ahead of market

expectations, supported by the continued

delivery of operational efficiencies and strong

free cash flow generation. Trading was also

bolstered by increased sales, in particular of

collectables with the continuing popularity of

Pokémon a key success story.

The successful renewal of publisher contracts

now secures nearly 93% of existing publisher

revenue streams through to at least 2029,

providing both short and medium-term

visibility in our revenue base and supporting

the expansion of our early morning supply

chain services.

Our internal investment programme

continues to progress, with a new warehouse

management system now live and operational

at our Hemel Hempstead distribution hub

and a wider transport management system

underway and scheduled for implementation

during Spring 2026. These new platforms are

designed to be flexible and scalable, enhancing

efficiencies across all our operational activities

as well as supporting our Growth initiatives

across three target verticals, leveraging our

expertise in warehousing, reverse logistics, and

early-morning final mile delivery.

In the spring of 2025, we also completed the

first phase of the refurbishment of our head

office in Swindon, providing a much more

efficient, collaborative and modern working

environment for our colleagues, underpinning

our commitment to the future of Smiths News

and Swindon.

In this context, the Committee has undertaken

a review of the remuneration policy to ensure it

continues to operate effectively, aligning reward

with performance and ensuring outcomes

remain proportionate and fair across all

stakeholder groups. Further details in relation

to this are set out later in this letter.

Board Changes

In March 2025, the Company announced that

Paul Baker had taken the decision to step down

as an Executive Director and Chief Financial

Officer to join a large private business in a

different sector. Paul is eligible to receive the

FY2025 bonus as he was actively employed for

the entire year but will not be entitled to receive

a bonus for FY2026 and his FY2023-2025

LTIP and all other in-flight LTIPs will lapse on

cessation of his employment.

We were delighted to announce the

appointment of Richard Clay as our new

Chief Financial Officer in July 2025. Richard

is expected to join the Board no later than

30 January 2026. The Committee determined

a remuneration package in line with the new

Directors’ remuneration policy summarised

below.

• Salary of £345,785 per annum, this is in

line with our current CFO’s salary increased

by the workforce pay increase effective

1 September 2025

• Annual bonus opportunity of 100% of salary

• LTIP award of 110% of salary subject to

approval of the new policy

• Pension of 5% of salary

• Benefits in line with policy

As part of Richard Clay’s recruitment,

the Committee agreed compensation for

remuneration forfeited from his previous

employer. The buy-out of the 2023 LTIP award

forfeited will be structured on consistent

terms and granted following Richard’s

commencement of employment with the Group.

We have also agreed that the FY2026 bonus

opportunity will not be pro-rated from his start

date to recognise the forfeiture of his in-year

annual bonus with his previous employer. Full

details will be disclosed in next year’s report.

Michael Holt

Remuneration Committee Chair

106

Smiths News plc Annual Report and Accounts 2025

Variable pay outcomes in FY2025

The FY2025 bonus was based 70% on

Adjusted Operating Profit, the key measure

of profitability against which business

performance was assessed over the year in line

with our internal financial reporting, and 30%

on personal objectives based on our operational

and strategic KPIs. In addition, a minimum

performance rating on the personal objectives

was required to be met before the financial

performance element could be paid, with the

Committee also having a general power to

adjust any formula-driven outturns, if required.

As a result of both Adjusted Operating Profit

of £39.078m for FY2025 and the successful

delivery of the operational KPIs under the

personal objectives, the annual bonus pay out is

between target and maximum, resulting from:

• a pay out for the financial metric at 92.08% (i.e.

64.46% of the 70% bonus opportunity); and

• for the personal element in respect of each

Executive Director’s performance against their

respective personal objectives:

– at 62.5% (i.e. 18.75% of the 30% bonus

opportunity) for Jonathan Bunting; and

– at 50% (i.e. 15% of the 30% bonus

opportunity) for Paul Baker.

Accordingly, this has resulted in an annual

bonus payout of 83.21% of the maximum 100%

opportunity for Jonathan Bunting and an annual

bonus payout of 79.46% of the maximum 100%

opportunity for Paul Baker.

In determining this outcome, the Committee

has carefully considered the following:

• the directors’ individual performances

against their personal objectives, taking into

consideration the financial performance

‘underpin’ whereby the Committee may scale

back the personal element of the bonus if this

is not deemed appropriate in light of financial

performance or shareholder experience; and

• the application of the FY2025 bonus scheme

across all scheme participants through the

‘fairness lens’, to ensure that there has not

been an unmerited bias of higher bonus

outcomes (and payments), as a percentage of

maximum reward opportunity, with seniority.

Overall, the Committee is satisfied that the

bonus payments to the Executive Directors are

appropriate, representing a strong link between

reward and performance and shareholder

alignment, as well as being consistent with the

treatment of bonus payments for colleagues.

On this basis, the Committee determined that

there was no need to use discretion to adjust

the outcome derived from the annual bonus

performance conditions.

In respect of the FY2023-2025 LTIP award for

which the performance period ended on

30 August 2025, this was weighted 30% against

the final year (FY2025’s) free cash flow targets

and 70% against TSR relative to the FTSE Small

Cap (excluding investment trusts). Based on the

Company’s TSR performance of 123.5% over

the performance period, equivalent to above

upper quartile performance against the FTSE

Small Cap, this results in a payout of 100.0%

of the TSR metric.

The free cash flow performance in FY2025 was

£37.0m, which is marginally above threshold

performance. This has resulted in 27.0% payout

of the adjusted free cash flow metric. Overall,

the vesting outcome for the FY2023-25 LTIP

award is therefore 78.1% of maximum. The

Committee has considered the formulaic out-

turn and confirms that it remains comfortable

that the payout level is appropriate in light

of the overall performance and shareholder

experience over the three-year performance

period, and that no discretion is necessary to

adjust the outturn.

Remuneration Policy review

Under the leadership of our Chief Executive

Officer Jonathan Bunting, who was appointed

in 2020, and with a refreshed and now well-

established Executive Leadership Team (albeit

acknowledging the imminent departure of the

Chief Financial Officer who has resigned to

pursue an opportunity at a private company), we

have stabilised financial performance, refocused

business priorities, re-secured publisher

contracts through to at least 2029, strengthened

our balance sheet through material de-

leveraging and improved market value, cash

flow and total investor returns.

The Committee has reviewed the current policy

in light of the above together with our business

strategy, latest corporate governance and

institutional investor developments, evolving

market practice and, in particular, a considered

review of our variable pay construct in order to

promote both the retention and motivation of

the established executive team and to ensure

that we can compete for future talent.

Composition and attendance

Members throughout

the year

Committee member

since Meeting attendance

Michael Holt – Chair (from

16 January 2025) 1 October 2018 5/5

Denise Collis – Chair (retired on

16 January 2025) 1 December 2015 3/3

David Blackwood 13 May 2020 5/5

Deborah Rabey 1 March 2023 5/5

Mark Whiteling 1 September 2017 5/5

Manju Malhotra 16 January 2025 2/2

1 The maximum number of meetings held during the year that each director could attend is shown next to the number attended.

The Committee met 5 times during the year. All Committee members attended each of the

meetings. For further details on attendance, please refer to the Corporate Governance Report on

page 76.

The composition of the Committee meets the 2018 UK Corporate Governance Code requirement

that the majority of members are independent non-executive directors.

At the invitation of the Committee, certain executive directors and management attended the

meetings from time to time.

The detailed roles and responsibilities of the Committee are set out in the Terms of Reference which

can be found here: www.smithsnews.co.uk/wp-content/uploads/Remuneration_Committee_

Terms_of_Reference_2025.pdf

Strategic Report Governance Financial Statements

107

Proposed changes to our

remuneration policy and approach

Historically, we have always applied incentive

plan opportunities for the annual bonus

(ABP) and the LTIP at a lower level than the

policy approved by shareholders, recognising

that it was appropriate to do so when the

business performance was below shareholder

expectations. Having now stabilised the

business and with considered steps underway

to explore growth-related opportunities, the

Committee has undertaken peer benchmarking

and considered the overall structure of the

incentive arrangements. As a result of the

outcome of this review and in consideration of

evolving market practice, it has become clear

to the Committee that the variable incentive

opportunities for the bonus (100% applied limit

vs a 125% policy limit) and LTIP (100% applied

limit vs a 150% policy limit) each benchmark at

a lower quartile market positioning, potentially

undermining the Company’s ability to retain and

compete for talent.

The Committee believes that the time is

therefore now right to increase the LTIP applied

incentive opportunity from 100% of salary to

125% of salary for the Chief Executive Officer

and from 100% of salary to 110% of salary for

our new Chief Financial Officer (policy limit to

remain at 150%). However, for prudent and

proportionate affordability reasons, it has been

decided not to adjust the ABP at this time

(hence, this would remain at an applied limit

of 100% within the 125% of salary limit for now).

The Committee has nonetheless determined

that it would look to increase the ABP and/or

LTIP applied incentive opportunities above the

current levels (and therefore approaching the

median peer benchmark variable pay position)

if it considers the conditions to be right to do so.

For instance, we would expect amongst others

(i) the share price to be strong; (ii) financial

profitability to support the additional P&L cost;

and/or (iii) any increase to be supported by

commensurate and stretching targets – so,

any increase over the three-year policy period,

up to the normal policy limit to either or both

bonus (i.e. from 100% to 125% of salary) and

LTIP grant level (i.e. from 110%/125% to 150%

of salary) is by no means going to happen

automatically. Any such changes, if and

when introduced, would fall within the current

policy limits and would be communicated in

future reports.

There will be no change to our approach

to fixed pay, with modest salary increases

normally at or below the workforce average.

Therefore, any increase in remuneration

opportunity will be solely linked to the

achievement of stretching performance

conditions linked to our business strategy.

We have checked the resultant remuneration

positioning against market data, and we are

comfortable that keeping fixed pay unchanged,

but potentially increasing performance-linked

remuneration over the three-year cycle will,

in due course, provide a broadly mid-market

package for the Chief Executive Officer and new

Chief Financial Officer, with a more market-

aligned balance between fixed and performance

linked elements.

The Committee has also considered carefully

the structure of the incentive plans and whether

this is striking the right balance between

providing a market competitive structure to

attract and retain executives of the necessary

calibre, whilst still providing a strong alignment

of interest with shareholders. In this regard, we

have regretfully lost our Chief Financial Officer

to an opportunity at a private company which

offers an enhanced cash package with no

deferral or shareholding requirements, and in

conducting an executive search for a new Chief

Financial Officer we have found that our current

package is far more stringent in several respects

than the market.

Accordingly, we have reviewed our policy

structure compared to our peers and propose

to change the structure in a few respects. The

objective has been to bring all aspects of the

structure into line with market, investor and UK

Corporate Governance Code requirements,

having been significantly more stringent in this

regard up to now. The structural changes are

set out below.

Element

Current policy/

application

Proposed policy/

application Rationale

Annual bonus

Annual bonus payment level for

threshold performance

For achievement of threshold

performance bonus begins to

accrue at 0%

For achievement of threshold

performance bonus begins to

accrue at 20%

Rare nowadays to accrue bonus

at 0% for threshold performance.

10%-25% more normal

Annual bonus deferral proportion 50% of bonus earned 33% of bonus earned 50% deferral at the very top end

of market practice. 33% deferral

market standard and many peers

have less stringent deferral

requirements

Interplay of bonus deferral with

200% of salary shareholding

requirement

Continue to defer 50% of bonus

irrespective of shareholding

Bonus deferral reduces from 33%

to 15% of any bonus earned when

the required shareholding level

is achieved

There is strong alignment with

shareholders at that point and

there will be a tail of up to five LTIP

awards at various stages of vesting

and holding requirements, on top

of 200% of salary worth of shares

Long Term Incentive Plan

LTIP vesting level for threshold

performance

For achievement of threshold

performance, LTIP award vests

at 20%

For achievement of threshold

performance, the LTIP award

vests at 25%

25% is the market standard start-

to-earn point for LTIP awards at

this level

Shareholding requirements

Percentage of deferred bonus

or LTIP required to be retained

(after tax) until 200% of salary

requirement is achieved

Until shareholding requirement is

achieved, 75% of a deferred share

bonus or LTIP award is required

to be retained

75% retention reduced to 50% Practice varies, but 50% retention

is more market standard than 75%

Directors’ Remuneration Report continued

108

Smiths News plc Annual Report and Accounts 2025

We consulted extensively with our major

shareholders and the feedback received was

broadly supportive, albeit with some feedback

on specific points. The Committee made one

adjustment from that originally proposed,

relating to bonus deferral. The original proposal

was that the level of annual bonus deferral

should be reduced from 50% of any bonus

earned to 33%, and that, furthermore, once

the 200% of salary shareholding guideline

level had been achieved, the bonus could be

payable 100% in cash with no deferral. We had

some feedback that an element of continued

bonus deferral can be helpful from a malus

perspective (should this ever be required to be

invoked) and provides continuing alignment

with shareholders’ interests. As a result, the

Committee determined that the level of deferral

in shares should be revised to 15% of any bonus

earned, rather than bonus being payable 100%

in cash, for any executive who has reached their

required shareholding level.

We are grateful to our major shareholders for

their help in shaping the new policy.

Operation of the new Remuneration

Policy in FY2026

The base salaries of the Chief Executive

Officer and current Chief Financial Officer

were increased by 3% in line with the

workforce increase. Our new Chief Financial

Officer will receive a salary of £345,785.

Separately, the Board has agreed an increase

of 3% to the fee rates of the Chairman

and non-executive directors, including the

fees for the chairing of Committees, the

Senior Independent Director and the NED

responsible for employee engagement,

with effect from 1 September 2025.

For the Executive Directors, the annual

bonus opportunity will remain at 100% of

base salary, with 70% of the bonus subject to

Adjusted Operating Profit and the remaining

30% will be subject to personal objectives.

Whilst the specific targets are considered

to be commercially sensitive and will be

reported retrospectively in next year’s report,

the Committee has extensively reviewed the

Adjusted Operating Profit target range in

order to ensure that it represents a stretching

expectation when considered in light of the

structural decline of news print, our cost-out

expectations and ambitious growth plans for

FY2026 and analysts’ consensus expectations

for our FY2026 profit performance. Following

this review, we have concluded that these

targets are particularly challenging and

represent an appropriate level of stretch.

Subject to approval of the new policy, one-third

of any bonus payment will be paid in shares

subject to a two-year holding period.

The LTIP grant level for the FY2026-2028 award

will increase to 125% of base salary for the Chief

Executive Officer and will be 110% of salary

for the new Chief Financial Officer subject to

approval of the new policy. The Committee

carefully considered the performance metrics,

having taken into account investor feedback.

This included consideration of whether another

group-based financial measure should be

added to the mix and the overlap with the profit

measure in the annual bonus. The Committee

concluded that the relative TSR measure

supports the Group strategy well, particularly in

relation to focusing on returns to shareholders

(including special dividends) and determined

that the TSR weighting should be increased to

70% of the award (from 60% currently), with the

remaining 30% weighting unchanged, based

on Profit from Growth and Diversified Activities.

The majority weighting on Group performance,

whilst still providing a meaningful minority

element based on the growth measures, was

felt to provide the right balance at the current

time. ESG remains a focus in relation to previous

LTIP awards, with targets based on Scope 1, 2

and 3 reductions in FY2026 and FY2027 and

our broad ESG strategy remains a priority within

the business, and we may revert to including

an ESG element in the future should this be

considered appropriate.

The target ranges for each measure are set out

later in this report.

Broader employee remuneration

considerations and employee

engagement

The Committee has continued its focus on the

‘fairness agenda’ during the year as part of its

review of workforce remuneration. This year, our

approach to colleague engagement has evolved.

As Chair of the Remuneration Committee and

the NED responsible for colleague engagement

I facilitated several workforce discussion

sessions during the year covering a broad

range of subject areas, including topics such

as the purpose and role of the Remuneration

Committee, and the approach to remuneration

throughout the workforce. These sessions have

been more informal in nature, encouraging

open conversations with colleagues at all

levels across the business. Feedback from

these conversations has been valuable and is

shared with the Committee, informing future

reward planning.

In addition, in line with previous years, the topic

of workforce remuneration was discussed in

detail in the Committee’s meeting in March

2025, with a particular focus on the following

areas:

• Considering the scale of the National Living

Wage increase effective 1 April 2025;

• Considering the total reward offering for

colleagues and noting the continuous review

of the Group’s current value proposition and

benefits offering;

• Noting the successful execution of reward

and payroll initiatives following colleague

consultation;

• Reviewing the Reward Strategy proposal

and its alignment with the new grading

framework; and

• Approving the 2025 SAYE offer with a 20%

discount price, and noting the increased

participation rates this year with a significant

majority of the take-up from lower employee

grades.

New Long Tem Incentive Plan

(LTIP) Rules

The current LTIP rules are coming up to their

10-year expiry date and so under resolution 4

we are seeking shareholder approval for new

LTIP plan rules. The terms of the new LTIP are

set out in the separate shareholder circular.

Concluding remarks

The Committee remains mindful that the

decisions around executive pay outcomes

should be proportionate and demonstrate

a strong link between reward, performance

and shareholder alignment. In this light, we

are comfortable that the policy has operated

as intended for FY2025 and remuneration is

appropriate, taking into account internal and

external factors and measures (including pay

ratios and gaps, colleague pay and the fairness

agenda, and the overall stakeholder experience).

As the new Chair of the Remuneration

Committee, I would like to acknowledge the

significant contribution of my predecessor,

Denise Collis. Her commitment to fairness,

transparency, and alignment with stakeholder

interests has laid a strong foundation for our

ongoing work.

Looking ahead, the Committee remains

firmly focused on ensuring that executive

remuneration continues to reflect performance,

supports the delivery of our strategic priorities,

and aligns with shareholder expectations under

our new policy.

I am committed to building on the Committee’s

legacy and fostering open dialogue with

shareholders and stakeholders as we navigate

the evolving landscape of executive pay. Thank

you for your continued engagement and

support.

Michael Holt

Remuneration Committee Chair

3 November 2025

Strategic Report Governance Financial Statements

109

Directors’ Remuneration Policy

At-a-glance summary

A summary of the new policy and its application for FY2026 is shown below.

Policy element

Jonathan Bunting

Chief Executive Officer

Richard Clay

Chief Financial Officer

Annualised base salary from 31 August 2025 (on appointment) £530,787 £345,785

% increase from prior year 3% N/A

Pension for FY2026 5% of base salary, aligned to the rate available to the majority of the workforce

Annual bonus (ABP) 100% of base salary

Annual bonus metrics Adjusted Operating Profit (70%)

Personal objectives (30%)

ABP payment for threshold performance 20% of base salary

ABP payment for on-target performance 50% of base salary

Deferred Bonus Plan (DBP) 33% of annual bonus deferred for 2 years in shares

Deferral reduces to 15% of bonus earned if an Executive Director has met their

shareholding guideline

LTIP 125% of base salary for the Chief Executive Officer

110% of base salary for the Chief Financial Officer

LTIP metrics Relative Total Shareholder Return vs FTSE Small Cap (70%)

Profit from Growth and Diversified Activities (30%)

LTIP payment for threshold performance 25% of award

LTIP post-vesting holding period 2 years

Malus and clawback Applies to awards made under the ABP, DBP and LTIP

Shareholding guidelines requirement 200% of base salary

Post-cessation of employment shareholding requirement Lower of 200% of base salary or shareholding on departure for 2 years post-

cessation, excluding self-purchased shares

Introduction

This report has been prepared on behalf of the Board by the Remuneration Committee in accordance with the relevant provisions of the Companies Act

2006 and on the basis prescribed in The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013.

Where required, data has been audited by BDO LLP and is indicated accordingly.

Directors’ Remuneration Policy

The following section sets out the Company’s policy on remuneration for Executive and Non-Executive Directors, which will be put to shareholder vote

at the Annual General Meeting on 29 January 2026. It is intended that the Directors’ Remuneration Policy will apply from this date for the maximum

three years permitted by the regulations and so, in the absence of a new or amended policy or as otherwise required by law, will only be brought back

to the shareholders at the Company’s Annual General Meeting in 2029.

Decision-making process for the determination, review and implementation of the Directors’ Remuneration Policy

The aim of the policy remains to facilitate delivery of our long-term strategy through attracting, retaining and motivating high-calibre directors with the

necessary skills and experience. In designing the policy, the Committee has considered our business strategy, corporate governance developments,

investor and investor representative body views and market practice. Where changes are made to the remuneration policy or a material change

to operation, we will consult with our largest shareholders to ensure their views are taken into account. In addition, the Committee also considers

management’s and colleagues’ views and input from its independent remuneration consultants.

Any potential conflicts of interest are managed by ensuring that no individual is involved in discussions regarding their own remuneration

arrangements and that remuneration is fully aligned to and supports our business strategy and culture. When reviewing and implementing the policy,

the Committee also carefully considers the remuneration arrangements, policies and practices of the workforce and the cascade of remuneration

throughout the business.

Directors’ Remuneration Report continued

110

Smiths News plc Annual Report and Accounts 2025

Summary of proposed changes to the Directors’ Remuneration Policy

Annual bonus

• Deferral has been reduced from 50% of bonus earned to 33% of bonus earned.

• Where Executive Directors’ have met and continue to exceed their shareholding guideline of 200% of salary, bonus deferral will be reduced to 15%

of bonus earned for subsequent bonus payments.

• Up to 20% of maximum will be payable for achievement of threshold performance (previously 0% payable for threshold performance).

LTIP

• Up to 25% of maximum will be payable for achievement of threshold performance (previously 20% payable for threshold performance).

• Clarification that dividend equivalents may be paid in cash or shares.

Malus and clawback

• The malus and clawback provision trigger events for the annual bonus and long-term incentive plans will be broadened to include the failure of

risk management and the circumstance of the Committee treating a director as a good leaver due to retirement but the director then returning to

executive employment.

Shareholding guideline

• Executive Directors will be required to retain 50% of the shares vesting under share incentive arrangements (previously 75%) until the shareholding

guideline has been met.

Executive Directors

The table below sets out the Company’s Remuneration Policy for Executive Directors:

Element

Purpose and link

to strategy Operation Maximum

Performance

conditions

Base salary Provide fixed

remuneration which

is sufficient to recruit

and retain individuals

of the necessary

calibre.

Salaries are set by the Committee taking

into account:

• the skills and experience of the individual;

• the size and scope of the role;

• market data for similar roles in

comparable companies; and

• performance of the individual and the

business.

Typically, salaries are reviewed annually,

with any changes effective from

1 September each year.

There is no prescribed

maximum salary. Salary

increases will normally be

in line with salary increases

generally for colleagues.

Larger increases may

be awarded where the

Committee considers it

appropriate to reflect, for

example:

• significant changes in the

size and/or complexity of

the Group and/or of the

role; or

• individuals being moved

to market positioning

over time.

None.

Benefits Ensure that benefits

are sufficient to recruit

and retain individuals

of the necessary

calibre and provide

business continuity.

Executive Directors are eligible to receive

benefits which may include a company

car (or cash equivalent), private medical

insurance, a periodic health assessment

and permanent health insurance.

Where relevant, other benefits to reflect

specific individual circumstances, such

as housing, relocation, travel or expatriate

allowances may also be provided.

Executive Directors are also provided with

insured Death in Service benefits.

There is no prescribed

maximum monetary value

of benefits.

Benefit provision is set at a

level which the Committee

considers to be appropriate

for the nature and location

of the role.

None.

Pension Contribute towards

funding later life cost

of living.

Executive Directors may participate in

the Group’s defined contribution pension

plan, receive a salary supplement or a

combination of the two.

The maximum employer

contribution or salary

supplement for executive

directors is the contribution

available to the majority of

the workforce, currently 5%

of salary.

None.

Strategic Report Governance Financial Statements

111

Element

Purpose and link

to strategy Operation Maximum

Performance

conditions

Annual bonus To incentivise the

delivery of the annual

business plan.

Bonus levels are determined by the

Committee after the year-end based on

performance against targets set at the start

of the financial year. The Committee retains

discretion to adjust bonus payments,

including to override the formulaic outcome

of the award, in the event that performance

against targets does not properly reflect

the underlying performance of the Group

and/or the relevant businesses, the overall

shareholder experience or employee

reward outcome.

One-third of the bonus is paid in shares

(or immediately vesting share awards)

but with appropriate and relevant trading

restrictions imposed by the Company’s

share Registrars, in order to enforce a

two-year deferral period and with the

associated share certificate retained by the

Company for two years.

Once the minimum shareholding guideline

has been met, the deferral requirement will

reduce to 15% of any bonus paid.

Clawback and dividend equivalent

provisions apply (see notes below).

The maximum bonus

opportunity in respect

of a financial year is 125%

of salary.

Annual measures and

targets will be set by the

Committee at the start of

the financial year.

The majority of the bonus

will be based on financial

performance, with the

remaining performance

condition attributable to

non-financial personal

objectives, including

operational, financial,

commercial and strategic-

related measures.

The threshold payment

level for the financial

performance condition is

up to 20% of the maximum

and up to 50% of the

maximum may be payable

for target performance.

LTIP To incentivise the

delivery of long-term

shareholder value.

Awards are made in the form of nil-cost

options or conditional share awards, the

vesting of which is conditional on the

achievement of performance targets (as

determined by the Committee).

Vested awards must be held for a further

two-year period before sale of the shares

(other than to pay tax).

The Committee retains discretion to adjust

the outturn of an LTIP award, including

to override the formulaic outcome of the

award, in the event that performance

against targets does not properly reflect

the underlying performance of the Group

and/or the relevant businesses, the overall

shareholder experience or employee

reward outcome.

Malus and clawback provisions apply

(see the notes below).

The value of dividends payable over

the vesting period may be paid in cash

or shares.

The maximum award in

respect of a financial year

is 150% of salary.

Performance

conditions are based

on the achievement of

challenging financial, total

shareholder return (TSR)

or non-financial strategic

performance targets

measured over a period of

three years normally.

For the achievement of

the threshold performance

target, a maximum of 25%

of the award will vest.

A majority of the award will

be based on financial and/

or TSR based conditions.

All-employee

share plans

To provide alignment

with colleagues and

to promote share

ownership

The executive directors may participate in

any all-employee share plan operated by

the Company.

Participation may be

capped by the Committee

and, in any case, within

HMRC limits applying to

the respective plan.

None.

Directors’ Remuneration Report continued

112

Smiths News plc Annual Report and Accounts 2025

Element

Purpose and link

to strategy Operation Maximum

Performance

conditions

Shareholding

guidelines

To provide alignment

of interest between

Executive Directors

and shareholders.

The shareholding guideline for Executive

Directors is 200% of base salary. Until this

level is reached, except for payment of

tax arising on the exercise of awards and

other exceptional circumstances, Executive

Directors will be required to retain 50% of

the shares vesting under share incentive

arrangements (excluding the application

of the Sharesave Scheme). In exceptional

circumstances, Executive Directors may

seek permission from the Committee to

temporarily go below their target holding.

Following termination of their employment,

Executive Directors will be required to

retain shares at the lower of 200% of

base salary, or the actual shareholding on

departure, for two years post-cessation.

Shares purchased voluntarily will not count

towards this requirement.

Notes to the policy table:

a) Choice of performance measures – each year the Committee will select the most appropriate performance measures and targets for the annual bonus plan and LTIP. The measures selected will be aligned

with Company strategy and key performance indicators and may also be based on total shareholder return.

b) Participation in incentive schemes is at the discretion of the Committee.

c) Legacy and mandated payments – the Committee reserves the right to make any remuneration payments and payments for loss of office (including exercising any discretions available to it in connection

with such payments) notwithstanding that they are not in line with the policy set out above: (i) where the terms of the payment were agreed before the policy came into effect; or (ii) where the terms of the

payment were agreed at a time when the relevant individual was not a director of the Company and, in the opinion of the Committee, the payment was not in contemplation of the individual becoming a

director of the Company; or (iii) where the Company is mandated to make the payment as a result of an award issued by a competent court, tribunal or authority. For these purposes ‘payments’ includes the

Committee satisfying awards of variable remuneration and, in relation to an award over shares, the terms of the payment are ‘agreed’ at the time the award is granted.

d) Clawback and malus – the Company operates clawback and malus provisions for the annual bonus plan, DBP and LTIP. The Committee reserves the right to take such action as it reasonably considers

appropriate to put the Company and participants in the same overall financial position as they would have been had certain circumstances (described below) not occurred. This includes a reduction or

cancellation of vested or unvested share awards and/or a reimbursement to the Company of part or all of any cash or share payments within two years of payment. Such circumstances include, but are not

limited to: (i) discovery of a material misstatement of the Company’s audited results on the basis of which the payment was or would be determined; or (ii) serious reputational damage of the Company, any

member of the Group or the relevant business as a result of the participant’s misconduct; or (iii) gross misconduct by the participant; or (iv) corporate failure; or (v) any other similar circumstance or event

which in the view of the Committee has a serious adverse effect on the Company, any member of the Group or the relevant business; or (vi) failure of risk management; or (vii) retirement where the retired

Executive Director subsequently returns to employment on or before expiry of the relevant vesting or subsequent holding period.

e) There are some differences in the Directors’ Remuneration Policy compared to the policy for colleagues generally. Whilst the overall structure of the remuneration package cascades throughout the business,

participation in and the opportunity for the incentive plans varies by seniority. Pension opportunity for Executive Directors and the workforce is aligned. All permanent employees are invited to participate in

the all-employee share plan. Overall, the Remuneration Policy for the Executive Directors is more heavily weighted towards variable pay than for other employees, to ensure a clear link between reward and

the performance and value created for shareholders.

Strategic Report Governance Financial Statements

113

Application of the Remuneration Policy

The charts below illustrate the application of the policy for FY2026. Each element (as a percentage of total remuneration) and the total values have been

set out.

£0

£500,000

£1,000,000

£1,500,000

£2,500,000

£2,000,000

£1,293,405

£787,694

£377,074

£2,094,339

£1,248,397

£568,326

100%

Minimum Target Maximum Minimum Target

Jonathan Bunting Richard Clay

Maximum

33%

21%

46%

16%

32%

25%

27%

100%

30%

22%

48%

15%

29%

27%

29%

LTIP with 50% share price appreciation Annual Bonus LT IP Fixed Pay

Notes

a) Fixed pay comprises annual base salary, benefits and pension, at current rates at the date of this report.

b) Benefits are the value received in FY2025.

c) The on-target level of annual bonus is 50% of the maximum opportunity and the on-target level of LTIP is 62.5% of the maximum opportunity.

d) The maximum value is based on an annual bonus opportunity of 100% of salary and an LTIP opportunity of 125% of salary for Jonathan Bunting and 110% of salary for Richard Clay. Also shown is the impact

of an increase in share price of 50% on the value of the LTIP award.

e) The value of dividend equivalents on LTIP vested awards is excluded.

Approach to recruitment remuneration

On appointment of a new Executive Director, the Committee would seek to offer a remuneration package which can secure an individual with the

necessary skills, while seeking to pay no more than it believes is necessary to facilitate the appointment. Any remuneration package would be in line

with the parameters set out in the Directors’ Remuneration Policy, which is salary set at a level to be able to recruit the most appropriate candidate,

a maximum annual bonus opportunity of 125% of base salary and a maximum LTIP award of 150% of base salary.

Where an individual forfeits outstanding incentive awards with a previous employer as a result of accepting the appointment within the Company,

the Committee may offer compensatory awards to facilitate recruitment. These awards would be in such form as the Committee considers

appropriate taking into account all relevant factors, including the form, expected value, performance conditions, anticipated vesting and timing

of the forfeited awards.

If an Executive Director needs to relocate in order to take up the role, the Company may pay to cover the costs of relocation including (but not limited to),

actual relocation costs, temporary accommodation and travel expenses.

Any share awards referred to in this section will be granted as far as possible under the Company’s existing share and incentive plans. If necessary,

awards may be granted outside these plans as currently permitted under the Financial Conduct Authority’s Listing Rules.

Directors’ Remuneration Report continued

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Smiths News plc Annual Report and Accounts 2025

Contracts of service and policy on loss of office

Contracts of employment with Executive Directors may be terminated at any time by the Company or employee upon up to 12 months’ notice.

The contracts of employment do not include any provisions for predetermined compensation for early termination.

Executive Director

Date of

current contract

Notice from

the Company

Notice from

the individual

Unexpired period

of service contract

Jonathan Bunting 1 March 2018, as

supplemented by

a letter of variation

dated 15 June 2020

12 months 12 months Rolling

Paul Baker 10 August 2021 12 months 12 months Rolling

The Committee may terminate an employment contract immediately by making a payment in lieu of notice consisting of base salary only for the

unexpired period of notice. In normal circumstances, such a payment would be made in monthly instalments over the period, subject to a duty to

mitigate, and will be reduced by the amount in respect of income receivable from alternative employment.

In the event that the employment of an Executive Director is terminated, any compensation payable will be determined in accordance with the terms

of the service contract, as well as the rules of any incentive plans and post-cessation shareholding requirements. Incentives will be treated in the

following way:

Annual bonus Unless the Committee determines otherwise, executives will not be eligible for a bonus if they are under notice.

If the Committee determines that the Executive Director is a good leaver1 they may still receive a bonus, reduced

to reflect the portion of the year they were in active employment.

Any payment would remain subject to performance and would normally be paid following the normal year-end

assessment process.

DBP (deferred annual

bonus shares)

Deferred bonus shares will normally continue to be subject to the holding period post cessation of employment. The

deferred shares would be subject to clawback and post-cessation shareholding requirements, and any held shares

would be subject to the executive share ownership requirements, including post-cessation of employment obligations.

LTIP If the Committee determines that an Executive Director is a good leaver, LTIP awards may vest subject to performance

and would normally be scaled back to reflect the portion of the performance period that has elapsed on the date that

employment ceases. The awards will vest on the normal vesting date (other than in exceptional circumstances, such as

death in service when the award may accelerate). The post-vesting holding period will normally continue to apply for

the full two-year period.

If an executive leaves the Group for any other reason, outstanding awards would lapse.

• Good leaver reasons include death, injury, disability, redundancy, retirement by agreement with the Company, the employing entity no longer being part of the Group, or any other reason as determined by

the Committee.

The Committee retains discretion to make additional exit payments where such payments are made in good faith in discharge of an existing legal

obligation (or by way of damages for breach of such an obligation) or by way of settlement or compromise of any claim arising in connection with the

termination of a director’s office or employment. The details and rationale for any such payments would be disclosed in the following year’s Directors’

report on remuneration.

External non-executive director appointments

It is the Company’s policy to allow each Executive Director to accept one non-executive directorship of a publicly quoted company provided that it

does not conflict with the interests of the Company. Executive Directors may retain the fee for such an appointment.

Consideration of pay and employment conditions elsewhere in the Group

The Committee considers the general basic salary increase for colleagues throughout the Group when determining the annual salary increases for

Executive Directors. In addition, any Group performance targets used in the executive bonus plan are cascaded into broader-based annual bonus

arrangements for all eligible colleagues, to ensure alignment across the bonus plans and participating populations.

As part of the Board’s commitment to broader stakeholder engagement, the Committee Chair meets with our National Colleague Engagement Forum,

to explain the Company-wide remuneration policy and outline how executive remuneration operates. The discussions explore the pay structure at

different organisation levels, in particular focusing on the checks and balances in place, to ensure pay for performance over both short and longer-term

timeframes, and the ‘fair pay’ agenda and fair pay principles adopted by the Company following colleague engagement.

Consideration of shareholder views

The views of shareholders are very important to the Committee and feedback received from shareholders following publication of the Annual Report

and at the AGM is welcomed. The Committee undertook a thorough consultation with our largest shareholders to explain changes being proposed to

our Directors’ Remuneration Policy which will be bought to our AGM on 29 January 2026 for shareholder approval.

Strategic Report Governance Financial Statements

115

Non-Executive Directors

The table below sets out the Company’s Remuneration Policy for Non-Executive Directors:

Element Purpose and link to strategy Operation Maximum

Chairman’s and Non-Executive

Directors’ fees

To attract and retain high-calibre

individuals

Fee levels are set to reflect the time

commitment, demands and responsibility

of the role, taking into account fees paid

by similarly sized companies.

Fees are reviewed from time to time

to ensure that they remain in line with

market practice.

Fees are normally paid in equal monthly

instalments.

The Chairman’s fee includes the

chairmanship of the Nominations

Committee.

There is no prescribed

maximum.

Additional fees To provide compensation to

Non-Executive Directors taking

on additional responsibility

Non-Executive Directors (other than the

Chairman) are paid an additional fee for

their chairmanship of a Board Committee or

additional responsibility, such as chairing the

National Colleague Engagement Forum, and

may be paid additional fees for significant

additional workload or roles.

There is no prescribed

maximum.

Benefits To facilitate the execution

of the role

The Company reimburses reasonable travel

and subsistence costs and other legitimate

business expenses, including any tax that

may be incurred.

There is no prescribed

maximum.

The Chairman and Non-Executive Directors do not participate in any pension or incentive plans.

Recruitment policy

The remuneration package for a newly appointed Non-Executive Director would be in line with the policy outlined above.

All Non-Executive Directors, including the Chairman, have a letter of appointment for an initial three-year term, subject to review thereafter.

The table below details the letter of appointments for each Non-Executive Director.

Non-Executive Directors

Date of current letter

of appointment

Notice from

the Company

Notice from

the individual

Date current term

is due to expire

David Blackwood 6 May 2020 3 months 3 months 2027 AGM

Michael Holt 30 September 2018 3 months 3 months 2028 AGM

Deborah Rabey 27 February 2023 3 months 3 months 2027 AGM

Mark Whiteling 14 August 2017 3 months 3 months 2027 AGM

Manju Malhotra 16 January 2025 3 months 3 months 2028 AGM

Directors’ Remuneration Report continued

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Smiths News plc Annual Report and Accounts 2025

Annual report on remuneration

Total remuneration payable in respect of FY2025 (audited)

The total remuneration for each Executive Director for FY2025 and the prior year is set out below.

Jonathan Bunting Paul Baker

Fixed pay

FY2025

‘000

FY2024

‘000

FY2025

‘000

FY2024

‘000

Salary 515 499 335 325

Benefits

(a)

10 11 14 14

Pension benefits 26 25 16 16

Total fixed pay 551 535 365 355

Performance-related pay

Annual bonus payments 429 373 267 255

LTIP award vesting

(b)

455 496 0 323

Dividend equivalent payments

(c)

118 97 0 63

Total variable pay 1,002 966 267 641

Total single figure

1,553

1,501

632

996

Notes

a) Benefits include the taxable value of a company car (Jon Bunting) or car cash allowance (Paul Baker), private medical insurance and the intrinsic value of Sharesave options granted during the year, as

applicable to each director.

b) The vested FY2023–2025 LTIP awards have been valued at 61.0p per share, being the opening market price of the Company’s shares on the date of vesting (3 November 2025). Further details on the

FY2023-2025 award and vesting can be found on page 120.

c) Dividend payments equivalent to the aggregate of all dividends paid during the vesting period applicable to the LTIP vesting noted in note (b) above, paid in shares.

Remuneration and link to performance during the year (audited)

Annual bonus

In FY2025, the Executive Directors had a maximum opportunity under the annual bonus of 100% of salary. Performance measures and actual

performances are set out in the table below:

Targets

Measure Weighting

Threshold

(0%)

Target

(50%)

Max

(100%)

Actual result

(£m)

Group Adjusted Operating Profit 70% £35.625m £37.5m £39.375m £39.078m

Personal objectives 30% See detail below See detail below

Strategic Report Governance Financial Statements

117

For the financial year under review, the Executive Directors were each given a number of personal objectives against which the personal element of the

annual bonus was assessed. These are set out in the table below, together with the basis for their assessment.

Strategic objective

Weighting

of objective Target Achievement

Outcome

(%)

Bonus paid

(%)

Jonathan Bunting

Growth 50% Material progress to be delivered

across three Growth verticals,

including £3.4m of contribution

from such activity.

• Revenue increased 16% to £3.9m,

representing a profit contribution of

£1.9m prior to investment costs.

• Material progress achieved across all 3

verticals including:

– Final Mile – Growth revenue

increased by 38% compared to prior

year. Contract tenders won in respect

of field service engineering spare

parts distribution (London, Newcastle

& West Midlands) and key strategic

engagements established with sales

brokers, resulting in improved lead

development pipeline and conversion.

– Recycle – Recruitment of industry

expert as MD and launch of DMR

proposition – securing 1,100 new

customers.

– New categories – contracts secured

with suppliers of hobby products

and greetings cards – strengthening

customer engagement with

independent retailers. Successful

move of media products to a

single site solution and phase 1

implementation of WMS technology

system.

50% 25%

Strategy 20% Develop and secure Board approval

for the business plan to scale Smiths

News Recycle.

• Risk and investment appetite review

undertaken with Board and clear

strategy developed for 3 Growth

verticals. Execution underway in line

with the plan.

75% 15%

Cost 20% Identify and eliminate £5million of

cost from the business by the end of

the financial year.

• £4.9m of permanent cost out

efficiencies achieved.

75% 15%

Culture 10% Embed three key cultural initiatives

to evolve the Company’s culture in

support of the growth strategy.

• Standardised approach to organisation

design in place and utilised across

senior teams.

• Uplift in colleague engagement

achieved, with very high participation

rate maintained.

• ‘Leading through change’ development

programme rolled out across the

management population.

• OE support provided, specifically

with the roll out of the apprenticeship

programme and broader awareness

training.

75% 7. 5%

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118

Smiths News plc Annual Report and Accounts 2025

Strategic objective

Weighting

of objective Target Achievement

Outcome

(%)

Bonus paid

(%)

Total (out of a

maximum 30%

bonus opportunity)

100% 62.5%

Paul Baker

Efficiency 25% • Oversee the outsourced Service

Support Centre’s (SSC) contract

review and prepare an informed

commercial negotiation stance on

contract renewal and continued

efficiency improvements.

• Challenge and drive Future

Technology investment plan

returns to business case and

ensure that future EPM Finance

implications are built into plans.

• SSC review and internal audit exercise

complete for Finance and Customer

Experience. Tech review part of IA

Plan for FY2026 as agreed with Audit

Committee.

• Finance headcount reduction complete

and KPIs all on track.

• Future Tech costs/benefit tracked.

• Cognos replacement completed and

rolled out.

50% 12.5%

Capital Allocation 25% • Provide analysis of the impact

of the Growth verticals’ review

action plans and timing, to inform

the cash flow and options for the

Board to consider distribution

returns to shareholders versus

internal investment returns.

• Work with advisors to inform

Board discussion around options

and shareholder sentiment to

investment decision and returns.

• Capital Allocation Policy updated in

2024 and continues to be adopted,

with Special Dividend declared in

November 2024 (paid in February

2025), demonstrating CAP in practice.

30% 7.5%

Growth 25% • Support implementation of Recycle

growth segment in line with Board-

approved business case.

• Propose a standard costing

method and implementation plan

for FY2026 budgets to enable clear

growth.

• Recycling investment approved and

implemented. Costs tracked and

investment/benefits clear.

• Profitability analysis by proposition

complete and reviewed monthly in

Growth forum.

• Further progress on changes to costing

process not completed. Awaiting clarity

of RACI.

40% 10%

Sustainability 25% • Develop and deliver a Board

approved net zero carbon

emissions Transition Plan to

meet the Company’s stated 55%

medium term emissions reduction.

• Support the process of reporting

external data to ensure consistency

and repeatability.

• Chair the Sustainability Committee

ensuring relevant changes to

legislation and reporting and

visible and the business strategy is

informed with the ESG impacts.

• Strong delivery across all pillars on key

actions and metrics – transition plan

deferred as reported in Sustainability

Committee Report on page 42.

• Data matrix completed to ensure

Sustainability Committee has reliable

and auditable process around

public data.

• Strong engagement across

Sustainability Committee.

80% 20%

Total (out of a

maximum 30%

bonus opportunity)

100% 50.0%

Further detail on our key personal objectives and performance against those objectives is provided in the Strategic Report on pages 02 to 73.

Strategic Report Governance Financial Statements

119

As a result of the financial performance and each Director’s respective personal performances as noted above, the overall bonus outcomes are as follows:

Financial performance

(70%)

Personal

performance

(30%)

Total bonus

outcome for

FY2025

(% of base salary)

Total bonus

payment

Jonathan Bunting 92.08% 62.5% 83.21% £428,783

Paul Baker 92.08% 50.0% 79.46% £266,745

1. 50% of the bonus payment is deferred into shares for two years.

The Committee is satisfied that the bonus payments to Jonathan Bunting and Paul Baker represent a strong link between reward and performance,

being aligned with the overall shareholder experience and consistent with the bonus payments made to employees generally.

Long-term incentive plan

Jonathan Bunting and Paul Baker were each granted nil-cost LTIP awards on 30 January 2023 which were subject to performance over a three-year

performance period FY2023-2025. The two performance measures were final year (FY2025) adjusted free cash flow and TSR relative to the FTSE Small

Cap (excluding investment trusts). The targets set and the final level of vesting for both measures are set out in the table below.

FY2023-2025 award Weighting

Threshold

(20% vesting)

Maximum

(100% vesting) Actual performance Vesting

Adjusted Free Cash Flow in final year (FY2025) 30% £36.6m £41.2m £37.0m 27.0% (of 30%)

Total Shareholder Return vs FTSE Small Cap 70% Median Upper quartile Above upper quartile 70.0% (of 70%)

Final total vesting (% of max) 78.1%

The Committee has considered the appropriateness of the rate of vesting at 78.1% and confirms that it is comfortable that the payout level is

appropriate in light of the overall long-term performance and shareholder experience over the three-year performance period, and that no discretion

would be necessary to adjust the outturn. However, in light of Paul Baker’s resignation in March 2025, the FY2023-2025 LTIP award will lapse (for the

avoidance of doubt, the future in-flight LTIP scheme awards will also lapse).

Accordingly, the table below shows the number of shares vesting and the value of these shares for the FY2023-2025 award:

Number of

shares at

grant

Value

at grant

(50.66p)

Total vesting

outcome

Number

of shares

vesting

Value on

vesting

(a)

Value

attributable

to share price

growth on

vesting

Dividend

payment

(b)

Jonathan Bunting 954,196 £483,395 78.1% 745,227 £454,589 £77,057 £117,74 6

Paul Baker 621,620 £314,912 0% 0 £0 £0 £0

a) The FY2023-2025 LTIP awards have been valued at 61.0p per share, being the opening market price of the Company’s shares on the date of vesting (3 November 2025).

b) Dividend payments equivalent to the aggregate of all dividends paid during the vesting period, paid in shares.

Share plans – awards made during the year

LTIP awards granted in FY2025 (audited)

On 25 November 2024, Executive Directors were granted the following FY2025-2027 LTIP awards:

Executive Director

Share price at

date of grant

Number of

nil-cost options

subject to

maximum award

Face value

of award

Percentage of

awards released

for achieving

threshold targets

Performance

period

Jonathan Bunting

60.63p

849,954 £515,327

20%

FY2025-2027

Paul Baker 553,710 £335,714

1. Share price is the mid-market average price in the three days immediately prior to the date of grant.

2. 100% for achieving maximum targets.

The performance conditions applied to the awards were as follows:

Performance period

Relative TSR compared to the companies

comprising the FTSE Small Cap Index

(excluding investment trusts) over the

three-year performance period

(60% of the award)

Final Year Profit from

Growth and Diversified

Activities in FY2027

(30% of the award)

An absolute reduction

in Final Year/FY2027

Scopes 1, 2 and (within

categories 1, 4 and 6 of)

Scope 3 emissions

(10% of the award)

Proportion

exercisable

Three years ending

28 August 2027

Below median rank Below £4.81m More than 227,103 tCO

e Zero

Median £4.81m 227,103 tCO

e 20%

Between median and upper quartile Between £4.81m and

£7.50m

Between 227,103 tCO

and 195,266 tCO

20%-100%

Upper quartile or higher £7.5 0m 195,266 tCO

e 100%

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Smiths News plc Annual Report and Accounts 2025

Deferred Bonus Plan awards granted in FY2025 (audited)

On 25 November 2024, the following awards were granted to the Chief Executive Officer and Chief Financial Officer under the DBP, equating to 50%

of their FY2024 bonus payment, as follows:

Executive Director

Share price at

date of grant

Number of nil cost

options subject

to award

Face value

of award

Jonathan Bunting 60.63p 307,5 68 £186,478

Paul Baker 60.63p 210,423 £ 127,579

1. Share price is the mid-market average price in the three days immediately prior to the date of grant.

Awards are immediately exercisable subject to the shares being held (after payment of taxes) for a period of two years from the date of grant in line with

the Company’s shareholding guidelines policy and subject to clawback within this period. As part of this deferral period, appropriate and relevant trading

restrictions have been imposed with the Company’s Registrars, in order to enforce the two-year deferral period and the associated share certificate

retained by the Company.

Performance graph and table

The graph below shows the Company’s Total Shareholder Return (TSR) performance against the TSR of the FTSE Small Cap Index (excl. Investment

Trusts) over the past ten years. The FTSE Small Cap Index was chosen because it represents a broad equity market index of which the Company has

primarily been a constituent and is the benchmark for the relative Total Shareholder Return performance condition used for the LTIP awards. The table

below the graph sets out the total remuneration for the Chief Executive Officer during each of the last ten financial years.

Value (£)

August

2015

August

2016

August

2017

August

2018

August

2019

August

2023

August

2025

August

2024

August

2022

August

2021

August

2020

Smiths News plc FTSE 250 Small Cap (excl. Investment Trusts)

100

150

200

250

FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025

Chief Executive Officer Total

remuneration (£’000) 882 794 539 537 596 917 1,209 1,616 1,501 1,553

Chief Executive Officer Annual

bonus payment (% of maximum) 38.9% 15.0% 0.0% 0.0% 20.0% 82.2% 68.7% 62.18% 74.73% 83.21%

Chief Executive Officer EPP

payout (% of maximum) 72.0% 72.0% 0.0% N/A N/A N/A N/A N/A N/A N/A

Chief Executive Officer LTIP

vesting (% of maximum) 0.0% 0.0% 0.0% 0.0% 0.0% 27.6 % 72% 91.38% 70.0%

78.1%

1. The EPP is a legacy incentive plan based on economic profit. In FY2018, the Committee exercised its discretion in deciding that the final tranche payment would not be considered in FY2019 or FY2020

as permitted by the scheme rules.

Strategic Report Governance Financial Statements

121

Percentage change in directors’ remuneration

The table below shows the percentage change in the directors’ salary, taxable benefits and annual bonus over the relevant reporting periods noted in

the table compared to the average of all UK-based employees. Where a director was appointed or stepped down from the Board in FY2025, they have

not been included in the table as it is not possible to provide a meaningful year on year comparison. This group has been chosen as the majority of our

workforce is UK-based.

Chairman CEO CFO M Holt D Rabey M Whiteling

employees

% change FY2021

Base salary/fees 0.0 2.0 N/A 0.0 N/A 0.0 (3.1)

Benefits 0.0 (38.1) N/A 0.0 N/A 0.0 0.0

Annual bonus – 346.7 N/A – N/A – 282.1

% change FY2022

Base salary/fees 0.0 2.0 N/A 16.7 N/A 13.6 7.7

Benefits 0.0 7.7 N/A 0.0 N/A 0.0 0.0

Annual bonus – (14.6) N/A – N/A – (3.1)

% change FY2023

Base salary/fees 3.25 3.25 3.25 3.25 N/A 3.25 7.7

Benefits – 5.1 45.5 – – – 0.0

Annual bonus – (6.5) 7.1 – – – 3.8

% change FY2024

Base salary/fees 3.25 3.25 3.25 3.25 3.25 3.25 8.5

Benefits – 11.2 14.0 – – – 0.0

Annual bonus – 23.9 30.0 – – – 30.1

% change FY2025

Base salary/fees 3.0 3.0 3.0 3.0 3.0 3.0 5.8

Benefits – 0.0 0.0 – – – 0.0

Annual bonus – 13.0 4.5 – – – 21.2

1. The value of the Chairman’s fee in FY2020 represents the combined remuneration for Gary Kennedy (to 13 May 2020) and David Blackwood (from 13 May 2020) and from FY2021 exclusively represents the

remuneration of David Blackwood.

2. The CEO’s values in FY2020 represent the combined remuneration for Jos Opdeweegh (to 5 November 2019) and Jonathan Bunting (from 5 November 2019), and from FY2021 exclusively represents the

remuneration of Jonathan Bunting.

3. For part of FY2020, the annual fee for Michael Holt was temporarily increased by £205,000 per annum for the duration of his tenure as Executive Chairman of Tuffnells Parcels Express from 5 November 2019

until its sale on 2 May 2020.

Chief Executive Officer pay ratio to the workforce

The table below shows the ratio of the Chief Executive Officer’s single figure total remuneration to the median (50th percentile), 25th and 75th percentile

paid employee, based on the total remuneration of the Group’s full-time equivalent UK colleagues.

The employee total remuneration includes wages and salary, taxable benefits, annual bonus, share-based remuneration and other incentive plans and

pension benefits. In line with the pay ratio regulations, we have shown the pay ratio going back to FY2018.

Year Methodology Population 25th percentile Median 75th percentile

FY2025

Option B

Employee salary

Employee total remuneration

CEO to employee pay ratio

£23,492

£24,431

63.5:1

£25,839

60:1

£29,244

£30,621

50.7:1

FY2024

CEO to employee pay ratio 68.2:1 60.1:1 54.8:1

FY2023

CEO to employee pay ratio 78.4:1 72.4:1 62.6:1

FY2022

CEO to employee pay ratio 63.3:1 57.8:1 43.9:1

FY2021

CEO to employee pay ratio 51.6:1 40.8:1 38.5:1

FY2020

CEO to employee pay ratio 34.7:1 29.1:1 23.9:1

FY2019

CEO to employee pay ratio 31.8:1 22.7:1 18.8:1

FY2018 CEO to employee pay ratio 32.4:1 26.3:1 17.8: 1

The Company has calculated the pay ratios using the Option B methodology set out in the pay gap regulations. This approach is considered the most

reasonable and practical given the nature of the data collation exercise and the information already held for gender pay gap reporting purposes. The

data for the three representative employees at each quartile is drawn from the April 2025 gender pay gap dataset and has been adjusted to a full-time

equivalent basis, using the full-time hours for each role, to enable direct comparison.

The composition of the colleague population between FY2018 and FY2025 has remained broadly consistent, with over 50% of colleagues in operational

roles within warehouse and field operations. As previously reported, these roles generally attract pay levels at or just above the National Living Wage

once shift allowances are included. Given this large proportion of operational roles, salaries at both the 25th percentile and the median continue to align

closely, reflecting the benchmark pay levels within this group. The next largest population comprises administrative and field sales support staff, team

leaders and supervisor roles, while colleagues at the 75th percentile are typically in professional functional or management roles (grades E–F) with a

wider range of salaries, benefits, and eligibility for performance-related incentives.

The pay ratios are therefore considered to provide a fair representation of pay within the Company and illustrate the consistent application of pay

practices across different levels. They reflect (i) the organisational structure and diversity of roles across grades, (ii) the significant weighting of

warehouse and field operations at the lower and median quartiles, and (iii) the emphasis on fixed pay and overtime rather than performance-related

initiatives for the majority of colleagues. By contrast, the CEO’s total remuneration package has a higher weighting towards performance-related

elements, including share-based awards, than that of employees represented at the three comparable percentiles.

Directors’ Remuneration Report continued

122

Smiths News plc Annual Report and Accounts 2025

The CEO pay ratios for FY2025 marginally decreased at the 25th and 75th percentiles but remained flat at the 50th percentile in comparison with the

prior year (FY2024). The consistently higher CEO pay ratios at each of these percentiles over recent years is a direct reflection of the composition of

the CEO’s total remuneration, which is more heavily weighted towards variable pay rather than fixed elements and, therefore, is particularly impacted

by strong financial performance and the resultant payment of annual bonuses and/or successful LTIP vestings over the last few years. In contrast, the

remuneration of colleagues at the comparative percentiles primarily reflects adjustments to fixed pay, which amplifies the gap in years where variable

pay outcomes fluctuate. Additionally, the significant increases to the National Living Wage in recent years have resulted in some pay compression

within first-line management grades. A targeted approach was therefore taken in FY2025 to address these compression issues through pay

adjustments, which has contributed to the stability of the 50th percentile ratio this year.

As noted above, whilst the pay gap in FY2025 indicates a marginal lowering this year relative to FY2024’s CEO pay ratios, it maintains a broadly

consistent theme since FY2021, noting that for each of FY2020, FY2019 and FY2018, the ratios did not include any LTIP payments and, for each

of FY2018 and FY2019, the ratios did not include any annual bonus payments either, each of which softened the CEO remuneration for those

comparable years.

Relative importance of spend on pay

The table below illustrates the Company’s expenditure on pay in comparison to adjusted EBITDA, corporation tax paid and distributions to shareholders

by way of dividend payments.

FY2025

£m

FY2024

£m % change

Total employees pay 47.9 45.0 6.0%

Adjusted Operating Profit 39.1 39.1 0.0%

Corporation tax paid 8.8 8.5 3.4%

Dividends paid

17. 4

10.8 37.9 %

The figures above are principally set out on pages 138, 152 and 153 in the Notes to the Group Financial Statements. Total employee pay is the total

pay for all colleagues across the Company. Adjusted operating profit has been used as a comparison as this is the key financial metric which the Board

considers when assessing the Company’s financial performance. Corporation tax paid and dividends paid have also been used as a comparison as

these together indicate the sustainable after tax and dividends paid position of the Company for reinvestment.

Payments to former directors and payments for loss of office

There were no payments to former directors or payments for loss of office during the year.

Employee Benefit Trust

The Company’s Employee Benefit Trust is used to facilitate the acquisition of ordinary shares in the Company to satisfy awards granted under the

Company’s executive share schemes and Sharesave Scheme. The Trust is a discretionary trust, the sole beneficiaries being employees (including

executive directors) and former employees of the Company. The Trust waives its right to vote and to dividends on the shares that it holds.

The Trustee is Computershare Trustees (Jersey) Limited, an independent professional trustee company based in Jersey.

The number of shares held in the Employee Benefit Trust at 30 August 2025 was 5,665,315 ordinary shares.

The Board has resolved that all employee share scheme exercises in FY2025 and, until otherwise agreed, all future employee share scheme exercises

in FY2026 should be satisfied through the Employee Benefit Trust, using market purchased shares and intends to instigate a plan for share purchases

to cover likely future commitments.

Dilution of share capital by employee share plans

Awards granted under the Company’s Sharesave Scheme have, in the past, been satisfied by the issue of new shares when the options are exercised.

The Company monitors the number of shares issued under the Sharesave Scheme and, as at 30 August 2025, had issued 2,906,449 new shares within

the past ten-year period, representing 1.17% of the issued share capital. This is well within our dilution limit of 10% in any rolling ten-year period in the

Sharesave Scheme rules and in line with the guidelines set by the Investment Association.

Executive Directors’ incentive plan share interests (audited)

The table below sets out details of outstanding share awards held by Executive Directors as at 30 August 2025 under the LTIP and DBP (covering

deferred annual bonus awards), together with exercises made during the year under both the LTIP and DBP. Awards under these schemes are

structured as nil cost options. In addition, the table sets out awards held by executive directors pursuant to the Sharesave Scheme.

Unvested subject

to performance

measures

Unvested without

performance

measures

Vested but

unexercised

Vesting

during the year

Jonathan Bunting 2,643,723 40,613 0 1, 347,676

Paul Baker 0 0 0 888,010

1. These unvested awards relate to the FY2023-FY2025 LTIP which have vested at 78.1% of maximum on 3 November 2025, and the FY2024-FY2026 and FY2025-FY2027 LTIPs. The FY2023-FY2025 award

is subject 70% to TSR and 30% to free cash flow performance conditions. The FY2024-FY2026 and FY2025-FY2027 awards are subject 60% to TSR, 30% to profit from growth and diversified activities and

10% to ESG conditions. In light of Paul Baker’s resignation in March 2025, these LTIP awards will lapse.

2. These awards relate to awards made under the Company’s SAYE plan in FY2023 (40,613).

3. These awards relate to the immediately vesting annual bonus deferred shares (which were granted to Executive Directors under the DBP on 25 November 2024, equating to 50% of their respective FY2024

bonus) and the FY2022-2024 LTIP vesting (plus associated dividend equivalent payment in shares). The awards relating to the annual bonus deferred shares and LTIP vesting must each be held for at least

two years.

Strategic Report Governance Financial Statements

123

Executive Directors’ shareholdings and shareholding guidelines

The shareholding guideline for Executive Directors is 200% of salary. Until this level is reached, under the current policy, except for payment of tax

arising on the exercise/vesting of awards and in other exceptional circumstances, executives are required to retain 75% of the shares vesting under

share incentive arrangements (excluding the application of the Sharesave Scheme). The table below sets out the beneficial interests of the Executive

Directors who served during the year, and of their connected persons, in the ordinary shares of the Company, together with the level held against the

shareholding guidelines.

Name Salary

Holding on

31 August

2024

Holding on

30 August

2025

Valuation

of current

holding

% of salary

held compared

to 200% of

salary target

shareholding

Shareholding

requirement

met?

Jonathan Bunting £515,327 2,529,022 2 ,057,6 41 £1,193,431 231% Yes

Paul Baker £335,714 285,200 754,377 £437,538 130% No

1. Using the closing share price of 58.0p as of 30 August 2025.

Between 30 August 2025 and 3 November 2025 (the publication date of this report), there has been no other change in the Executive Directors’

shareholdings shown above.

Non-Executive Directors

Non-Executive Directors’ fees

The following fees were paid to Non-Executive Directors for FY2025 and FY2024 (audited):

Year

Base fee

£000

Additional fees

£000

Benefits

£000

Total fees

£000

David Blackwood

FY2025 154 – 0.8 154.8

FY2024 149.2 – 1.0 150.2

Denise Collis

FY2025 19.7 4.5 1.0 25.2

FY2024 50.6 10.6 0.6 61.8

Michael Holt

FY2025 52.2 12.4 0.5 65.1

FY2024 50.6 5.3 0.2 56.1

Mark Whiteling

FY2025 52.2 16.5 0.4 69.1

FY2024 50.6 16.0 0.8 67.4

Deborah Rabey FY2025 52.2 0 0 52.2

FY2024 50.6 0.0 0.5 51.1

Manju Malhotra

FY2025 32.7 0 0 32.7

FY2024 – – – –

1. The benefits disclosed relate to the reimbursement of travel and accommodation expenses incurred in attending Board meetings at the Company’s premises around the UK. The grossed-up value has been

disclosed and the tax arising is settled by the Company.

2. The Company chairman is paid a single fee which includes chairmanship of the Nominations Committee.

3. Denise Collis retired from the Board on 16 January 2025. She received an additional £11,007 per year, pro-rated for the period as chair of the Remuneration Committee.

4. Michael Holt is responsible for Board colleague engagement and is chair of the National Colleague Engagement Forum and took over the role of chair of the Remuneration Committee following Denise Collis’

retirement. He received an additional £5,504 per year and £11,007 per year, pro-rated for the period as chair of the Remuneration Committee, respectively, for these roles.

5. Mark Whiteling is Senior Independent Director and received a fee of £5,504 per year for this role plus a fee of £11,007 per year as chair of the Audit Committee.

6. Manju Malhotra joined the Board on 16 January 2025.

Non-Executive Directors’ shareholdings (audited)

The beneficial interests of the Non-Executive Directors who served during the year are set out below:

30 August

2025

31 August

2024

David Blackwood 307,218 307,2 18

Denise Collis 48,846 48,846

Michael Holt 0 0

Mark Whiteling 80,000 80,000

Deborah Rabey 20,663 0

Manju Malhotra

–

1. Shareholding shown as at the date of retirement from the Board for Denise Collis.

There has been no change in the Non-Executive Directors’ shareholdings shown above between 30 August 2025 and 3 November 2025 (the

publication date of this report).

Directors’ Remuneration Report continued

124

Smiths News plc Annual Report and Accounts 2025

Implementation of the Remuneration Policy in FY2026

Executive Directors

Base salary

The base salaries for the Chief Executive Officer and current Chief Financial Officer increased by 3% to £530,787 and £345,785 respectively, with effect

from 1 September 2025 which is in line with the average percentage increase awarded to our workforce. Our new Chief Financial Officer will receive

a salary of £345,785 on appointment.

Pension

The Company’s pension contribution for Executive Directors is 5% of salary, which is aligned to the rate available to the majority of the workforce.

Bonus

The annual bonus opportunity will remain at 100% of salary. The current Chief Financial Officer will not be entitled to a bonus due to his resignation.

70% will be based on Adjusted Operating Profit as this continues to be a key measure of profitability against which business performance will be

assessed over the year and will be in line with our internal financial reporting. A target range for Adjusted Operating Profit has been established in

alignment with a demanding budget, and is considered challenging when compared to analysts’ consensus expectations for our FY2026 performance.

Additionally, 30% of the target will be linked to personal objectives, measured against the achievement of stretching targets set against our operational

and strategic KPIs. 20% of maximum will be payable for achievement of threshold performance under the new policy.

Subject to approval of the new policy, one-third of the bonus paid will be deferred in shares subject to a holding period of two years. However, if an

Executive Director has met their shareholding guideline, deferral reduces to 15% of the bonus paid for two years.

The Committee will apply discretion as to whether any payment should be made on the personal element of the bonus in the event that the financial

targets are not met. There will also be a requirement for a minimum personal performance rating to be achieved before the financial performance

element may be paid.

The performance targets are considered commercially sensitive, so will not be disclosed in advance. However, there will be full disclosure of the targets

that were set, the performance against them and the bonus payable, in next year’s Annual Report.

LTIP

LTIP awards to the Chief Executive Officer and new Chief Financial Officer will be granted covering the performance period FY2026-2028.

The LTIP grant level for the FY2026-2028 award will be 125% of base salary for the Chief Executive Officer and 110% of base salary for the new Chief

Financial Officer subject to approval of the new policy at the 2026 AGM, as explained earlier in this report. The performance conditions have been

reviewed as part of the policy review and as a result performance will be assessed at 70% on a relative Total Shareholder Return measure over a three-

year performance period and 30% on final-year profit from Growth and Diversified Activities.

The performance targets are set out below:

Measure Weighting

Threshold

(25% vests)

Maximum

(100% vests)

Relative TSR versus the companies comprising the FTSE Small Cap index

(excluding investment trusts) as at the date of grant

70% Median Upper quartile

Profit from Growth and Diversified Activities in the final year (FY2028) of the

three-year performance period 30% £4.29m £6.90m

The TSR measure provides a strong and direct incentive to continue to focus on share price growth and shareholder value. The profit generated from

Growth and diversified activities measure represents the growing importance of the strategic imperative for the Company to successfully diversify and

explore new revenue opportunities within its core markets and other adjacent categories and aligns with the Board’s ambitions to measure the success

of management’s endeavours in this important area. The target range from 87.5% of target (at threshold) through to 140.0% of target (at maximum)

reflects the Company’s stretching growth and diversification ambitions. The significant stretch above target has been set based on an expected mix of

both organic growth and growth by acquisition, in line with the business strategy.

Non-Executive Directors

Non-Executive Directors’ fees in FY2026

The Company Chairman’s fee rate increased by 3% from £154,098.43 to £158,721.43 with effect from 1 September 2025, and the non-executive

directors’ fees similarly increased by 3% with effect from 1 September 2025, such that the following rates now apply:

• the base fee rate increases from £52,283.39 per annum to £53,851.90;

• the additional fee for chairing the Board’s Committees increases from £11,007.02 per annum to £11,337.21 per annum; and

• the additional fees for the role of Senior Independent Director and/or chairing the National Colleague Engagement Forum increase from £5,503.51

per annum to £5,668.67 per annum.

Strategic Report Governance Financial Statements

125

Consideration by the Directors of matters relating to Directors’

Remuneration Committee

David Blackwood is non-executive chairman of the Board and was deemed independent on appointment. All other members of the Committee are

independent non-executive directors.

Denise Collis retired from the Board and stepped down as chair of the Remuneration Committee on 16 January 2025. Michael Holt was appointed to

the role of chair of the Remuneration Committee on the same date. Manju Malhotra joined the Board on 16 January 2025 and was a member of the

Remuneration Committee from this date.

In addition to the formal number of Committee meetings set out below, members regularly engaged throughout the year in considering various other

matters that arose under the remit of the Committee.

Meetings

attended

Possible

meetings

Denise Collis 3 3

Michael Holt 5 5

David Blackwood 5 5

Mark Whiteling 5 5

Deborah Rabey 5 5

Manju Malhotra 2 2

The Committee’s terms of reference, which are available on the Company’s website www.smithsnews.co.uk and from the Company Secretary on

request, set out the responsibilities of the Committee.

During the year, the Committee was supported in its work by its appointed external advisers, Korn Ferry, who were paid fees of £56,521 (plus VAT). Korn

Ferry has no connection with the Company or the directors. Based on its experience of working with the advisers, the Committee is satisfied that the

advice received from Korn Ferry has been, and continues to be, objective and independent. Korn Ferry provides no other services to the Company that

could potentially lead to a conflict of interest with the independent advice to the Committee.

Korn Ferry is a founder member of the Remuneration Consultants’ Group and, as such, voluntarily operates under the code of conduct in relation

to executive remuneration consulting in the UK. The code of conduct can be found at www.remunerationconsultantsgroup.com.

The Chief Executive Officer, the Chief Financial Officer, the Company Secretary and General Counsel, the People Director and the Head of Reward also

attended Committee meetings in the year but were not present when their own performance or remuneration was discussed.

Shareholder vote

The table below sets out the voting results for the Directors’ Remuneration Policy at the 2023 AGM and the Directors’ Remuneration report at the

2025 AGM:

Resolution Votes for

Percentage

of votes cast

in favour

Votes

against

Percentage

of votes cast

against

Total

votes cast

Votes

withheld

To approve the Remuneration Policy (2023 AGM) 130,074,330 91.34% 12,336,356 8.66% 142,410,686 86,953

To approve the Directors’ Remuneration report

for the year ended 31 August 2024 (2025 AGM) 132,074,855 97.72% 3,082,124 2.28% 135,157,009 316,132

Approval

This report was approved by the Board and signed on its behalf by:

Michael Holt

Remuneration Committee Chair

3 November 2025

Directors’ Remuneration Report continued

126

Smiths News plc Annual Report and Accounts 2025

Directors’ Report

This Annual Report and the Group Financial Statements include the Directors’ Report and the audited financial statements of Smiths News plc

(the ‘Company’) and its subsidiaries (the ‘Group’) for the 52-week period ended 30 August 2025.

This Directors’ Report has been drawn up and presented in accordance with and in reliance upon applicable English company law, and the liabilities

of the Directors in connection with those reports shall be subject to the limitations and restrictions provided by such law.

Subsidiaries and branches

The Company’s operating subsidiaries, branches and associated undertakings are listed in Note 27 to the Group Financial Statements.

Post balance sheet events

The Directors have considered the period between the balance sheet date and the date when the accounts are authorised for issue for evidence

of conditions that existed at the balance sheet date, either adjusting or non-adjusting post balance sheet events, and have concluded that, other than

those events disclosed in Note 13 and Note 20, there are no other events in the current period.

Profit attributable to shareholders and dividends

The statutory profit for the financial year, after taxation, was £28.3m (FY2024: £25.5m).

In light of the Company’s performance, the Board has decided to recommend both a final ordinary dividend of 3.80p and a special dividend of 3.00p,

each of which is expected to be paid on 5 February 2026 to all shareholders who are on the register of members at close of business on 9 January 2026.

Accordingly, the total combined dividend for the 52 week period ended 30 August 2025 is 8.55p per ordinary share (FY2024: 7.15p).

Share capital

The Company’s issued share capital comprises a single class of ordinary shares of 5p each. All issued shares are fully paid, can be held in certificated

or uncertificated form and are listed on the London Stock Exchange. Details of movements in the issued share capital during the year can be found in

Note 22 to the Group Financial Statements.

The rights and obligations attaching to the Company’s ordinary shares, in addition to those conferred on their holders by law, are set out in

the Company’s Articles of Association (Articles), a copy of which can be obtained from Companies House or from the Company’s website

www.smithsnews.co.uk. The Company’s Articles may only be amended by a special resolution of the Company. Subject to applicable statutes,

shares may be issued with such rights and restrictions as the Company may by ordinary resolution decide, or (if there is no such resolution or so far

as it does not make specific provision) as the Board may decide.

Holders of ordinary shares are entitled to attend and speak at general meetings of the Company; to appoint one or more proxies and, if they are

corporations, to appoint corporate representatives; and to exercise voting rights. Holders of ordinary shares may also receive a dividend and on a

liquidation may share in the assets of the Company. In addition, holders of ordinary shares are entitled to receive the Company’s Annual Report and

Accounts. Subject to meeting certain thresholds, holders of ordinary shares may require a general meeting of the Company to be held or propose

resolutions to be considered at Annual General Meetings.

Voting rights and restrictions on transfer of shares

On a show of hands at a general meeting of the Company, every holder of ordinary shares present in person or by proxy and entitled to vote has one

vote and on a poll every member present in person or by proxy and entitled to vote has one vote for every ordinary share held. None of the ordinary

shares carry any special rights with regard to control of the Company. Electronic and paper proxy appointments and voting instructions must be

received by the Company’s Registrars not later than 48 hours before a general meeting. However, when calculating the 48-hour period, no account

is taken of any part of a day that is not a working day.

The Directors may refuse to register a transfer of a certificated share: which is not fully paid, provided that the refusal does not prevent dealings

in the shares in the Company from taking place on an open and proper basis; or on which the Company has a lien. The Directors may also refuse to

register a transfer of a certificated share unless the instrument of transfer: (i) is lodged at the office, or such other place as the Directors may decide

accompanied by the certificate for the share to which it relates and such other evidence (if any) as the directors may reasonably require to show the

right of the transferor to make the transfer; (ii) is in respect of only one class of shares; and (iii) is in favour of not more than four transferees.

Transfers of uncertificated shares must be carried out using CREST and the Directors can refuse to register a transfer of an uncertificated share in

accordance with the regulations governing the operation of CREST.

There are no other restrictions on the transfer of ordinary shares in the Company other than those imposed by prevailing laws and regulations

(such as insider trading laws and market requirements in respect of close periods).

The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer of ordinary shares or on voting rights.

Shares held by the Employee Benefit Trust

The Trustee of the Smiths News Employee Benefit Trust holds ordinary shares of the Company on behalf of the beneficiaries of the Trust, who are the

employees and former employees of the Company. If any offer is made to the holders of ordinary shares to acquire their shares, the Trustee will not be

obliged to accept or reject the offer in respect of any shares which are, at that time, subject to subsisting options, but will have regard to the interests

of the option holders and can obtain their views on the offer, and subject to the foregoing, the Trustee will take the action with respect to the offer it

thinks fair. The Trustee waives its right to vote and to dividends on the shares that it holds. Further details on the Trust can be found in the Directors’

Remuneration Report on page 106.

Purchase of own shares

At the Annual General Meeting held on 16 January 2025, authority was given for the Company to purchase, in the market, up to 24,765,920 ordinary

shares of 5p each. The Company did not use this authority to make any purchases of its own shares during FY2025. This authority is renewable annually

and approval will be sought from shareholders at the Annual General Meeting in January 2026 to renew the authority for a further year.

Directors’ Report – Other statutory disclosures

Strategic Report Governance Financial Statements

127

Issue of new ordinary shares

The Board has resolved that all employee share scheme exercises during FY2025 and, unless otherwise agreed, all future employee share scheme

exercises in FY2026 should be satisfied through the Employee Benefit Trust (further details on the Employee Benefit Trust and market purchases are set

out in Directors’ Remuneration Report on page 106). Accordingly, during the 52-week period ended 30 August 2025, no ordinary shares in the Company

were issued.

Any newly issued ordinary shares rank pari passu with those previously in issue. The Articles provide that the Board may, subject to the prior approval

of the Company’s shareholders, exercise all the powers of the Company to allot relevant securities including new ordinary shares.

Interests in voting rights

As at 30 August 2025, the Company is aware of the following shareholding interests in its issued share capital as may have been notified to it from time

to time pursuant to the Financial Conduct Authority’s Disclosure and Transparency Rule 5:

Holder % of voting rights

Aberforth Partners LLP 17.2 3

FORUM Family Office Value Fund/Small Cap Fund 12.61

M&G Investments 7.5 4

Hargreaves Lansdown (Stockbroker) 7.12

Interactive Investor 5.3

Worsley Investors Limited 4.13

AJ Bell 3.15

In the period 31 August 2025 to 3 November 2025, no notification of updated voting rights positions has been received by the Company.

Except for the above, the Company is not aware of any other shareholders with interests in 3% or more of the voting rights attached to the issued share

capital of the Company.

Change of control

Each of the Company’s trading subsidiaries has agreements with customers and suppliers that may contain change of control clauses giving rights to

those customers and suppliers on a takeover of the Company.

A change of control of the Company following a takeover bid may cause a number of other agreements to which the Company and/or one or more of its

subsidiaries is party, such as banking arrangements, property leases and licence agreements, to alter or be capable of termination at the election of the

counterparty.

The Company does not have agreements with any director or employee that would provide compensation for loss of office or employment resulting

from a takeover except that provisions of the Company’s share schemes may cause options and awards granted to employees under such schemes

to vest on a takeover – the relevant scheme rules stating that as a result of a change of control event (or other corporate action) the proportion of the

award which may vest shall be limited (unless the Board determines otherwise) to a pro rata proportion on the basis of the number of whole months

which have elapsed from the first day of the performance period to the date of the corporate action, as compared to the number of whole months within

the performance period; any remainder of the award thereby lapsing.

Directors

All directors who served during the year are set out on page 76. In addition, it is to be noted that Denise Collis served as an Independent Non-Executive

Director (and Remuneration Committee Chair) until 16 January 2025 when, as expected, she stepped down from the Board following the expiry of her

nine-year term.

The Directors are responsible for the management of the business of the Company and may exercise all the powers of the Company subject to

applicable legislation and regulation and the Company’s Articles.

The Company’s Articles give power to the Board to appoint directors and (where notice is given signed by all the other Directors) remove a Director

from office. They also give a power to the Company to appoint Directors (by ordinary resolution) and remove a Director from office (by special resolution

or by ordinary resolution of which special notice has been given).

The interests of the Directors and their immediate families in the share capital of the Company, along with details of Directors’ share options and awards,

are set out in the Directors’ Remuneration Report on pages 123 and 124.

At no time during the year did any of the Directors have a material interest in any significant contract with the Company or any of its subsidiaries.

The Company maintains Directors’ and Officers’ liability insurance which gives appropriate cover for any legal action brought against its Directors.

The Company has also provided an indemnity for its directors and secretary and for the Directors of its associated companies, to the extent permitted

by law, which is a qualifying third-party indemnity provision for the purposes of section 234 of the Companies Act 2006.

Directors’ conflicts of interest

The Board confirms that a formal system for Directors to declare their interests and for the independent Directors to authorise situational conflicts

continues to be in place. Any authorisations given by the Board are recorded in the Board minutes and in a register of directors’ conflicts which is

reviewed annually by the Board.

Employees

Details of the Company’s policies in relation to employment, training and development, employee engagement, employee share ownership and equal

opportunities are set out in the Sustainability Report on page 42 and in the Corporate Governance Report on page 76.

Suppliers and customers

Details of how the directors have engaged with suppliers and customers to help foster the Company’s business relationships with its suppliers,

customers and others and the outcome of such engagement on the decisions made by the Board are set out the Corporate Governance Report

on page 76.

Directors’ Report – Other statutory disclosures continued

128

Smiths News plc Annual Report and Accounts 2025

Greenhouse gas emissions

Details of the Company’s greenhouse gas emissions and SECR disclosures are set out in the Sustainability Report on page 42.

Consideration of climate change

In preparing the Group Financial Statements, the Directors have considered the impact of climate change, particularly in the context of the risks

identified in the Sustainability report on page 42. There has been no material impact identified on the financial reporting judgements and estimates.

In particular, the directors considered the impact of climate change in respect of the Company’s going concern and viability review (see page 65).

The Directors have determined that none of the short or medium-term climate-related risks identified in its review pose a threat to the business but the

Directors nonetheless remain mindful of the ever-changing risks associated with climate change and intend to continue to assess these risks (and any

emerging risks that arise from ongoing reviews) against the judgements and estimates made in the preparation of the Group Financial Statements.

Political donations

It is the Company’s policy not to make political donations and no political donations or EU political expenditure were made in the year (FY2024: £nil).

Bribery Act 2010

The Company has an established anti-bribery policy in place designed to manage risks relating to bribery and corruption. Guidance and training are

provided to colleagues through an online webinar presentation, along with support from the Company’s Legal team on how to manage these risks.

Suppliers and contractors are made aware of the anti-bribery policy, through our Supplier Code and appropriate contractual arrangements. Anti-bribery

and corruption measures are regularly kept under review to ensure that the steps in place are sufficiently robust to prevent bribery and corruption.

Health and safety

We are committed to providing a safe place for our colleagues to work and for visitors and contractors to our sites. Policies applicable to the safety and

wellbeing of our colleagues are reviewed on an ongoing basis to ensure that the approach to training, risk assessments, safe systems of working and

accident management are appropriate. An ongoing audit programme assesses health and safety risks on a regular basis and ensures that robust control

measures are in place to limit these risks. Further details are set out in the Audit Committee Report on page 92.

Financial instruments

Information on the Company’s financial risk management objectives and policies and on the exposure of the Company to relevant risks in respect of

financial instruments is set out in Note 16 to the Group Financial Statements.

Disclosure of information to auditor

Each Director confirms that, so far as they are aware, there is no relevant audit information (as defined in section 418 of the Companies Act 2006) of

which the Company’s auditor is unaware and that each Director has taken all the steps they ought reasonably to have taken as a director in order to

make themselves aware of any relevant audit information and to establish that the Company’s auditor is aware of that information.

Auditor

Resolutions to reappoint BDO LLP as auditor of the Company and to authorise the Audit Committee to determine their remuneration will be proposed

at the 2026 Annual General Meeting.

Annual General Meeting

The 2026 Annual General Meeting of the Company will be held at Rowan House, Cherry Orchard North, Kembrey Park, Swindon, Wiltshire SN2 8UH on

Thursday 29 January 2026 at 11.30am. The Notice of Annual General Meeting is given, together with explanatory notes to the proposed resolutions to

be considered at the meeting, in the booklet which accompanies this report.

Approved by order of the Board and signed on its behalf by:

Stuart Marriner

Company Secretary and General Counsel

3 November 2025

Strategic Report Governance Financial Statements

129

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law, the directors are required to prepare the

Group Financial Statements in accordance with UK adopted international accounting standards and have elected to prepare the Company Financial

Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of

affairs of the Group and the Company and of the profit or loss for the Group for that period.

In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with UK adopted international accounting standards (relevant to the Group Financial

Statements), subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group or Company will continue in

business;

• prepare a Directors’ Report, a Strategic Report and Directors’ Remuneration report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose,

with reasonable accuracy at any time, the financial position of the Company and enable them to ensure that the financial statements comply with the

Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention

and detection of fraud and other irregularities.

The Directors are responsible for ensuring that this Annual Report and the Group Financial Statements, taken as a whole, are fair, balanced and

understandable, and provide the information necessary for shareholders to assess the Group’s performance, business model and strategy.

Website publication

The Directors are responsible for ensuring this Annual Report and the Group Financial Statements are made available on a website. The Group Financial

Statements are published on the Company’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination

of these financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s website is the

responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors’ responsibilities pursuant to DTR4

The Directors confirm to the best of their knowledge:

• The Group Financial Statements have been prepared in accordance with the applicable set of accounting standards (UK-adopted international

accounting standards) and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group; and

• This Annual Report includes a fair review of the development and performance of the business and the financial position of the Group and the parent

company, together with a description of the principal risks and uncertainties that they face.

This responsibility statement was approved by the Board on 3 November 2025 and signed on its behalf by:

Jonathan Bunting Paul Baker

Chief Executive Officer Chief Financial Officer

3 November 2025 3 November 2025

Directors’ responsibilities

130

Smiths News plc Annual Report and Accounts 2025

Opinion on the financial statements

In our opinion:

• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 30 August 2025 and of the

Group’s profit and cashflows for the period then ended;

• the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;

• the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;

and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Smiths News plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the 52 week period ended

30 August 2025 which comprise the Group Income Statement, the Group Statement of Comprehensive Income, the Group Balance Sheet, the Group

Statement of Changes in Equity, the Group Cash Flow Statement, the Company Balance Sheet, Company Statement of Changes in Equity and notes

to the financial statements, including a summary of material accounting policies.

The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards

and as regards the Parent Company financial statements, is applicable law and United Kingdom Accounting Standards, including Financial Reporting

Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those

standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the additional report to

the audit committee.

Independence

Following the recommendation of the audit committee, we were appointed on 15 March 2019 to audit the financial statements for the year ended

31 August 2019 and subsequent financial periods. The period of total uninterrupted engagement is 7 years, covering the periods ended 31 August 2019

to 30 August 2025. We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our

audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our

other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by that standard were not provided to the Group

or the Parent Company.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the

financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to continue to adopt the

going concern basis of accounting included:

• A review of the forecasts and covenant calculations for the Group for a period of 16 months from the date of approval of the financial statements, being

the period determined by the Directors over which going concern was assessed to align with covenant compliance dates post the required 12 month

going concern assessment period. This included assessing that the forecasts were consistent with the latest Board approved budgets;

• We considered whether the period used by the Directors for the 16 months to 28 February 2027 was appropriate – this included assessing any

significant events or conditions expected beyond the period of management’s assessment & considering the implication thereof;

• We assessed assumptions within the cash flow forecasts: we challenged the assumptions used in the forecasts, this included:

– the rate of revenue decline from printed media;

– the ability to implement operational cost-saving strategies;

– gross margins;

– future growth strategies;

– Dividend payments;

– Other potential cash outflows; and

– Share purchases required for the EBT.

Independent auditor’s report

to the members of Smiths News plc

Strategic Report Governance Financial Statements

131

In challenging management, we held meetings with both the finance team, Director of Strategy & Change and Recycle Managing Director.

The assumptions were corroborated by reviewing historical trend analysis and reviewing against market data where applicable. We undertook the

following work as part of this;

• Tested the numerical accuracy and mechanics of the going concern model used to prepare the forecasts;

• Agreed a sample of the Group cash balances from the forecasts to post year end bank statements and compared the Group cash balance to the

forecasted amount to assess accuracy and reliability of forecasting;

• Considered and evaluated the current financing agreement to understand the terms of the agreement and the covenant compliance requirements;

• Tested the covenant calculation, and forecast covenant compliance, against the Group’s financing agreement to confirm that there remains sufficient

headroom in the forecasts for the going concern period;

• Challenge of Directors’ scenario analysis and sensitivities with specific reference to the Group’s principal and emerging risks. This included an

evaluation of sensitivities over the Group’s cash flows and covenants to changes in the significant inputs and assumptions used;

• Scrutinised the stress tests and reverse stress test which demonstrated the reduction in EBITDA required without mitigation for a liquidity event or

covenant breach to occur and considered the Directors’ assessment that it was remote for such a reduction to occur;

• Assessed the mitigating factors available to management to address any downturns in EBITDA;

• Compared the post year end trading results to the forecasts to evaluate the accuracy and achievability of the forecasts prepared;

• Evaluated the accuracy of Management’s historical forecasting; and

• Evaluated the completeness and accuracy of the disclosures in relation to the conclusion reached by the Directors in their going concern assessment

and the adequacy of the disclosures in the financial statements against the requirements of the accounting standards.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively,

may cast significant doubt on the Group and the Parent Company’s ability to continue as a going concern for a period of at least twelve months from

when the financial statements are authorised for issue.

In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw

attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt the going

concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Overview

Coverage 99% (2024: 99%) of Group revenue

99% (2024: 99%) of Group total assets

Key audit matters

Carrying value of the investments in Smiths News plc (Parent Company)

2024

✓

2025

✓

Materiality Group financial statements as a whole – £1.8m (2024: £1.6m)

based on 5% (2024: 5%) of Adjusted Profit before Tax

An overview of the scope of our audit

Our Group audit was scoped by obtaining an understanding of the Group and its environment, the applicable financial reporting framework and the

Group’s system of internal control. On the basis of this, we identified and assessed the risks of material misstatement of the Group financial statements

including with respect to the consolidation process.

We then applied professional judgement to focus our audit procedures on the areas that posed the greatest risks to the group financial statements.

We continually assessed risks throughout our audit, revising the risks where necessary, with the aim of reducing the group risk of material misstatement

to an acceptable level, in order to provide a basis for our opinion.

From our risk assessment and planning procedures, we determined which of the Group’s components were likely to include risks of material

misstatement relevant to the Group’s financial statements. We then determined the type of procedures to be performed at these components.

Components in scope

For components in scope, we used a combination of risk assessment procedures and further audit procedures to obtain sufficient appropriate evidence.

These further audit procedures included:

• Procedures on the entire financial information of the component, including performing substantive procedures – two components.

• Procedures on one or more classes of transactions, account balances or disclosures for components – two components.

Procedures performed at the component level

We performed procedures to respond to Group risks of material misstatement at the component level. In determining components, we have considered

how components are organised within the Group, and the commonality of control environments, legal and regulatory framework, and level of

aggregation associated with individual entities.

The Group engagement team has performed all procedures directly, and has not involved component auditors.

Procedures performed centrally

We considered there to be a high degree of centralisation of financial reporting, commonality of controls and similarity of the group’s activities and

business lines. We therefore designed and performed some procedures centrally.

The group operates a centralised IT function that supports IT processes for all components. This IT function is subject to specified risk-focused audit

procedures, predominantly the testing of the relevant IT general controls and IT application controls.

Independent auditor’s report continued

to the members of Smiths News plc

132

Smiths News plc Annual Report and Accounts 2025

Climate change

Our work on the assessment of potential impacts on climate-related risks on the Group’s operations and financial statements included:

• Enquiries and challenge of management to understand the actions they have taken to identify climate-related risks and their potential impacts

on the financial statements and adequately disclose climate-related risks within the annual report;

• Our own qualitative risk assessment taking into consideration the sector in which the Group operates and how climate change affects this

particular sector;

• Review of the minutes of Board and Audit Committee meeting and other papers related to climate change.

We challenged the extent to which climate-related considerations, including the expected cash flows from the initiatives and commitments have been

reflected, where appropriate, in Management’s going concern assessment and viability assessment.

We also assessed the consistency of management’s disclosures included as Other Information on page 127 with the financial statements and with

our knowledge obtained from the audit.

Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters that were materially affected by climate-related risks.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current

period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which

had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These

matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide

a separate opinion on these matters.

Key audit matter How the scope of our audit addressed the key audit matter

Carrying value

of investment

in Smiths News

Holding Limited

by Smiths News

plc (Parent

Company)

Refer to the

Accounting

polices (note 3

of the Parent

Company

Financial

Statements).

The carrying value of investment in Smiths News

Holding Limited has previously been subject to

impairment and the carrying value is therefore below

original cost.

Management identified indicators of impairment

including:

• the difference between the Group’s total market

capitalisation and carrying value

• the ongoing decline in printed media revenues; and

• payment of dividends in the year from Smiths News

Holdings Limited to Smiths News plc which reduced

the underlying net assets

Based on the above indicators, an impairment

assessment was performed by management on the

investment carrying value.

Where an impairment review is conducted, the

recoverable amount is determined based on the higher

of ‘value in use’ or ‘fair value less costs of disposal’.

Value in use has been calculated using cash flows

reflecting management’s best estimate of the current

economic outlook. As the investment represents an

equity investment, the value in use has been adjusted to

reflect the overall net debt of the underlying subsidiaries.

Management’s value in use model and hence

assessment is sensitive to changes in the key

assumptions, including discount rates, year on year

growth and long term growth rates set out in Note 3 of

the Parent Company financial statements.

Management is required to ensure that the disclosures

are complete and accurate to enable users of the

financial statements to understand the assumptions and

the sensitivities apparent.

As the model is highly sensitive to the key assumptions,

and given the proportion of time spent in auditing this

judgemental area, we determined it to be a Key Audit

Matter (“KAM”).

With the support of our internal valuation specialists, we have assessed

the methodology applied by management in performing the impairment

test against the requirements of IAS 36 ‘Impairment of assets’ and

considered the various indicators identified by management in respect of

impairment.

In respect of the value in use calculations we challenged the cash flow

estimates and assumptions used by:

• reviewing the forecast against historical trends including long-term

volume declines and historical forecasting accuracy;

• assessing price and volume assumptions against market benchmarks,

while also evaluating historical trends

• confirming existing contracts with publishers;

• assessing the Group’s capacity to mitigate volume declines through

operational savings;

• assessing the Group’s ability to deliver Growth targets for Recycle &

Final Mile;

• holding discussions with operational team members who were separate

to the finance team;

• considering the impact the Group’s principal risks and uncertainties as

well as considering whether further sensitivities could be applied.

In addition to the procedures performed on cash flows we undertook the

following:

• assessed the discount rates applied in the model to each of the identified

components, by reviewing the methodology used to calculate the

discount rates through independently determining a range of acceptable

rates, considering market data and comparable companies;

• tested the arithmetic accuracy of the impairment model.

• considered the risk of management bias and override given the impact

an impairment would have on retained earnings, and hence distributable

reserves.

• assessed and challenged the adequacy of management’s sensitivity

disclosures in relation to key assumptions to consider the extent of

change in those assumptions that would be required to lead to a

significant change in the carrying value, in particular forecast cash flows

and discount rate; and

• considered and scrutinised management’s assessment as to why the

carrying value of the investment exceeded market capitalisation.

Key observations:

As a result of performing the procedures above we did not identify any

material issues.

Strategic Report Governance Financial Statements

133

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to

be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis

of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance

materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as

we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the

financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:

Group financial statements Parent company financial statements

2025

£m

2024

£m

2025

£m

2024

£m

Materiality

1.8

1.6

1.7

1.0

Basis for determining materiality 5% of profit before

adjusting items

and tax

5% of profit before

adjusting items

and tax

1.5% of Total

Assets, but capped

at 95% of Group

consolidated

materiality

1% of Total Assets,

but capped at

60% of Group

consolidated

materiality

Rationale for the benchmark applied We consider this to be the most appropriate

performance measure as it removes the

impact of certain one-off or exceptional

items impacting the underlying profit of

the Group and is also a key measure

for stakeholders.

Calculated as a percentage of Group

materiality for Group reporting purposes

given the assessment of aggregation risk.

Performance materiality

1.3

1.2

1.3

0.7

Basis for determining performance materiality 75% of materiality 75% of materiality

Rationale for the percentage applied for

performance materiality

Based on our experience and knowledge

of the Group, the Group structure, planned

testing approach, and history of errors.

The Performance Materiality percentage

has increased from the prior period, given

the reduced level of misstatements and

control environment.

Based on our experience and knowledge

of the Company, planned testing approach,

and history of errors.

The Performance Materiality percentage

has increased from the prior period, given

the reduced level of misstatements and

control environment.

Component performance materiality

We identified 4 components being Smith News Trading Limited, Smiths News Holdings Limited, Smiths News plc (Parent Company) and Martin Lavell

Limited. We set component performance materiality at £1.26m based on a percentage of 95% of Group performance materiality in respect of all four

components as detailed above, which was deemed appropriate based on the relevant levels of aggregation risk.

Reporting threshold

We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £70k (2024: £30k). We also agreed to

report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report and accounts

other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and,

except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read

the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material

misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the

work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Independent auditor’s report continued

to the members of Smiths News plc

134

Smiths News plc Annual Report and Accounts 2025

Corporate governance statement

The UK Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate

Governance Statement relating to the parent company’s compliance with the provisions of the UK Corporate Governance Code specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is

materially consistent with the financial statements or our knowledge obtained during the audit.

Going concern and longer-term viability • The Directors’ statement with regards to the appropriateness of adopting the going concern basis

of accounting and any material uncertainties identified set out on page 143;

• The Directors’ explanation as to their assessment of the Group’s prospects, the period this

assessment covers and why the period is appropriate set out on page 65; and

• The Directors’ statement on whether they have a reasonable expectation that the group will be able

to continue in operation and meet its liabilities set out on page 130.

Other Code provisions • Directors’ statement on fair, balanced and understandable set out on page 101;

• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks

set out on page 67;

• The section of the annual report that describes the review of effectiveness of risk management and

internal control systems set out on page 67; and

• The section describing the work of the audit committee set out on page 93.

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and

ISAs (UK) to report on certain opinions and matters as described below.

Strategic report and Directors’ report • In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic report and the Directors’ report for the financial year for

which the financial statements are prepared is consistent with the financial statements; and

• the Strategic report and the Directors’ report have been prepared in accordance with applicable

legal requirements.

• In the light of the knowledge and understanding of the Group and Parent Company and its

environment obtained in the course of the audit, we have not identified material misstatements in

the strategic report or the Directors’ report.

Directors’ remuneration • In our opinion, the part of the Directors’ remuneration report to be audited has been properly

prepared in accordance with the Companies Act 2006.

Matters on which we are required to report by

exception

• We have nothing to report in respect of the following matters in relation to which the Companies

Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the Parent Company, or returns adequate

for our audit have not been received from branches not visited by us; or

• the Parent Company financial statements and the part of the Directors’ remuneration report to be

audited are not in agreement with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of Directors

As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the financial statements and

for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of

financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to continue as a going

concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend

to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.

Strategic Report Governance Financial Statements

135

Independent auditor’s report continued

to the members of Smiths News plc

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due

to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that

an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error

and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on

the basis of these financial statements.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,

outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting

irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

• Our understanding of the Group and the industry in which it operates;

• Discussion with management, those charged with governance, in-house legal counsel and the Audit Committee; and

• Obtaining an understanding of the Group’s policies and procedures regarding compliance with laws and regulations;

We considered the significant laws and regulations to be applicable financial reporting frameworks (UK adopted international accounting standards in

respect of the Group and UK GAAP in respect of the Parent Company) and relevant tax compliance regulations.

The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures

in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be UK Companies Act,

Listing Rules, employment law, health and safety and pensions legislation.

Our procedures in respect of the above included:

• Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations;

• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and regulations;

• Review of correspondence with The Pensions Regulator;

• Review of financial statement disclosures and agreeing to supporting documentation;

• Review of whistleblowing reports for any known or suspected instances of non-compliance with laws and regulations;

• Review of legal expenditure accounts to understand the nature of expenditure incurred; and

• Discussions with management, those charged with governance, in-house legal counsel and the Audit Committee to identify any instances or potential

instances of non-compliance with laws and regulations.

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

• Enquiry with management and those charged with governance, in-house legal counsel and the Audit Committee regarding any known or suspected

instances of fraud;

• Obtaining an understanding of the Group’s policies and procedures relating to:

– Detecting and responding to the risks of fraud; and

– Internal controls established to mitigate risks related to fraud.

• Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;

• Review of whistleblowing reports for any known or suspected instances of fraud;

• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;

• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

and

• Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.

Based on our risk assessment, we considered the area’s most susceptible to fraud to be revenue recognition and management override of controls.

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Smiths News plc Annual Report and Accounts 2025

Our procedures in respect of the above included:

• Testing of journal entries throughout the year, including revenue entries, which met defined risk criteria, by agreeing to supporting documentation

and corroborating that the journals had been posted by appropriate users under appropriate authorisation; and

• Assessing the key estimates and judgements made by management in preparing the financial statements for indications of bias or management

override when presenting the results and financial position of the Group. This included those relating to the Parent Company impairment review,

presentation of adjusting items, property dilapidations provision and contingent liabilities.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to

have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout

the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting

a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by,

for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed

non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become

aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.

This description forms part of our auditor’s report.

Use of our report

This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit

work has been undertaken so that we might state to the Parent Company’s members those matters we are required to state to them in an auditor’s

report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent

Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Oliver Chinneck (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, UK

3 November 2025

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Strategic Report Governance Financial Statements

137

Group Income Statement

for the 52-week period ended 30 August 2025

		52-week period ended			53-week period ended
		30 August 2025			31 August 2024
		Adjusting			Adjusting
£m	Note	Adjusted*	items	Total	Adjusted*	items	Total
Revenue	2	1,06 4.0	–	1,064.0	1, 10 3 .7	–	1, 10 3 .7
Cost of sales	2	(988.9)	–	(98 8.9)	(1 , 0 3 0. 5)	–	(1, 0 3 0. 5)
Gross profit		75 .1	–	75 . 1	73.2	–	73. 2
Administrative expenses		(3 5 . 8)	(1 . 6)	(3 7. 4)	(3 3 . 8)	–	(3 3 . 8)
Net impairment (loss)/reversal on trade receivables	13	(0 . 1)	3 .7	3.6	(0 . 1)	0.6	0.5
Losses from equity accounted joint ventures	11	(0 . 1)	–	(0 . 1)	(0 . 2)	–	(0. 2)
Impairment reversal of joint venture investment	11	–	–	–	–	0.3	0.3
Operating profit		39.1	2.1	41 . 2	39.1	0. 9	4 0.0
Finance costs	5	(3 . 6)	–	(3 . 6)	(6 . 3)	–	(6 . 3)
Finance income	5	0.3	–	0. 3	0.4	–	0.4
Profit before tax		35.8	2 .1	3 7. 9	33. 2	0.9	3 4.1
Income tax expense	6	(8 . 8)	(0 . 8)	(9 . 6)	(8 . 5)	(0 . 1)	(8 .6)
Profit for the period attributable to equity shareholders		2 7. 0	1 .3	28 .3	24 .7	0. 8	25. 5
Earnings per share				Pence			Pence
Basic	8			11 .7			10 . 6
Diluted	8			11 . 3			10 . 2

* This measure is described in Note 1(4) of the accounting policies and the Glossary on page 175. Adjusting items are set out in Note 3 to the Group Financial Statements.

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Smiths News plc Annual Report and Accounts 2025

		52-week	53-week
		period	period
		ended	ended
		30 August	31 August
£m		2025	2024
Items that may be reclassified to the income statement:
Currency translation differences		–	(0 . 1)
Items that will not be reclassified to the income statement:
Tax credit on pension surplus	21	1.5	–
Other comprehensive result for the period		1.5	(0 . 1)
Profit for the period		28.3	25.5
Total comprehensive income for the period		29.8	25.4

Group Statement of Comprehensive Income

for the 52-week period ended 30 August 2025

Strategic Report Governance Financial Statements

139

Group Balance Sheet

as at 31 August 2025

		At	At
		30 August	31 August
£m	Note	2025	2024*
Non-current assets
Intangible assets	9	2 .5	2.4
Property, plant and equipment	10	10 .7	9 .7
Right-of-use assets	17	29. 4	29.5
Interest in equity accounted joint ventures	11	4 .6	4.6
Deferred tax assets	18	0.8	1. 3
Other non-current assets		0.9	–
		48.9	4 7. 5
Current assets
Inventories*	12	12 .6	18 .0
Trade and other receivables*	13	103 . 4	10 6 . 2
Cash and cash equivalents	15	8.2	7. 0
Corporation tax receivable		0.9	0.9
		125 .1	132 . 1
Total assets		174 . 0	17 9 . 6
Current liabilities
Trade and other payables	14	(1 2 7. 2)	(12 8 . 5)
Lease liabilities	17	(5 .6)	(5 . 5)
Provisions	19	(0 . 5)	(1 . 3)
		(1 3 3 . 3)	(13 5 . 3)
Non-current liabilities
Bank loans and other borrowings	15	(1 . 7)	(1 7. 6)
Lease liabilities	17	(2 4 . 9)	(2 5 . 4)
Provisions	19	(4 . 6)	(4 . 6)
		(3 1 . 2)	(4 7. 6)
Total liabilities		(16 4 . 5)	(1 8 2 . 9)
Total net assets/(liabilities)		9.5	(3.3)
Equity
Called up share capital	22(a)	12 . 4	12. 4
Share premium account	22(c)	60.5	6 0.5
Demerger reserve	23(a)	(2 8 0 . 1)	(2 8 0 . 1)
Own shares reserve	23(b)	(2 . 9)	(3 . 7)
Translation reserve	23(c)	0. 2	0. 2
Retained earnings		219. 4	207 .4
Total shareholders’ funds/(deficit)		9.5	(3.3)

* Comparatives have been restated as detailed in Note 1(26).

The accounts were approved by the Board of Directors and authorised for issue on 3 November 2025 and were signed on its behalf by:

Jonathan Bunting Paul Baker

Chief Executive Officer Chief Financial Officer

Registered number – 05195191

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Smiths News plc Annual Report and Accounts 2025

Group Statement of Changes in Equity

for the 52-week period ended 31 August 2025

		Called	Share		Own
		up share	premium	Demerger	shares	Translation	Retained
£m	Note	capital	account	reserve	reserve	reserve	earnings	Total
Balance at 27 August 2023		12 .4	60.5	(2 8 0 . 1)	(4 . 4)	0. 4	19 4 . 9	(16 . 3)
Profit for the period		–	–	–	–	–	25.5	25.5
Currency translation differences		–	–	–	–	(0 . 2)	0.1	(0 . 1)
Total comprehensive income for the period		–	–	–	–	(0 . 2)	2 5.6	25.4
Dividends paid	7	–	–	–	–	–	(10 . 8)	(10 . 8)
Employee share scheme purchases		–	–	–	(3.3)	–	–	(3.3)
Employee share scheme awards		–	–	–	4.0	–	(3 . 2)	0.8
Recognition of share-based payments		–	–	–	–	–	0.9	0.9
net of tax
Current tax recognised in equity		–	–	–	–	–	0.1	0.1
Deferred tax recognised in equity		–	–	–	–	–	(0 . 1)	(0 . 1)
Balance at 31 August 2024 and 1 September 2024		12 .4	60.5	(2 8 0 . 1)	(3 . 7)	0. 2	2 0 7. 4	(3 . 3)
Profit for the period		–	–	–	–	–	28.3	28.3
Tax credit on pension surplus		–	–	–	–	–	1.5	1.5
Total comprehensive income		–	–	–	–	–	29.8	29.8
for the period
Dividends paid	7	–	–	–	–	–	(1 7. 4)	(1 7. 4)
Employee share scheme purchases		–	–	–	(1 . 6)	–	–	(1 . 6)
Employee share scheme awards		–	–	–	2 .4	–	(2 . 1)	0. 3
Recognition of share-based payments		–	–	–	–	–	1.3	1.3
net of tax
Current tax recognised in equity		–	–	–	–	–	0. 5	0. 5
Deferred tax recognised in equity		–	–	–	–	–	(0 . 1)	(0 . 1)
Balance at 30 August 2025		12 .4	60.5	(2 8 0 . 1)	(2 . 9)	0.2	2 19. 4	9.5

Strategic Report Governance Financial Statements

141

Group Cash Flow Statement

for the 52-week period ended 30 August 2025

		52-week
		period	53-week
		ended	period ended
		30 August	31 August
£m	Note	2025	2024
Net cash inflow from operating activities	21	49.4	22.4
Investing activities
Dividends received from joint ventures	11	0. 2	0.2
Purchase of intangible assets	9	(0 . 6)	(1 . 0)
Purchase of property, plant and equipment	10	(3 . 9)	(3.4)
Interest received		0.2	0.4
Net cash used in investing activities		(4 . 1)	(3 . 8)
Financing activities
Interest paid		(3 . 2)	(4 . 9)
Dividend paid	7	(1 7. 4)	(10 . 8)
Repayments of lease principal		(6.5)	(5 .9)
Repayment of term loan		–	(41 . 5)
Net (decrease)/increase in revolving credit facility	15	(1 5 . 9)	1 7. 5
Purchase of own shares by Employee Benefit Trust		(1 . 6)	(3.3)
Proceeds from exercise of share purchase options		0.5	–
Net cash used in financing activities		(4 4 . 1)	(4 8 . 9)
Net decrease in cash and cash equivalents		1.2	(3 0 . 3)
Opening net cash and cash equivalents		7. 0	37. 3
Closing net cash and cash equivalents	15	8.2	7. 0

142

Smiths News plc Annual Report and Accounts 2025

1. Accounting policies

(1) Basis of consolidation

Smiths News plc (‘the Company’) is a company incorporated in England, UK under the Companies Act 2006. The Group accounts for the 52-week

period ended 30 August 2025 comprise the Company and its subsidiaries (together referred to as the ‘Group’) and the Group’s interests in joint

ventures. Subsidiary undertakings are included in the Group Accounts from the date on which control is obtained. They are deconsolidated from the

date on which control ceases. All significant subsidiary accounts are made up to 30 August 2025 and are included in the Group Accounts.

Unless otherwise noted references to 2024 and 2025 relate to a 53-week period ended 31 August 2024 and the 52-week period ended 30 August 2025

as opposed to calendar year.

The Accounts were authorised for issue by the directors on 3 November 2024.

(2) Accounting basis of preparation

The Accounts are prepared on the historical cost basis and are presented in Pound Sterling and rounded to £0.1m, except where otherwise indicated.

The Group Accounts have been prepared in accordance with UK-adopted International Accounting Standards (IFRS) in conformity with the

requirements of the Companies Act 2006.

Intra-group balances and unrealised gains and losses or income and expenses arising from intra-group transactions are eliminated in preparing the

Group Accounts. Unrealised gains and losses arising from transactions with joint ventures are eliminated to the extent of the Group’s interest in

these entities.

(3) Going concern

The Group accounts have been prepared on a going concern basis.

When assessing the going concern of the Group, the directors have reviewed the period-to-date financial actuals, as well as detailed financial forecasts

for the period up to 27 February 2027, the Company’s interim reporting date for FY2027, the going concern period.

The Group currently has a net asset position of £9.5m as at 30 August 2025. All bank covenant tests were met at the balance sheet date. The key Bank

Net (Cash)/Debt: Bank EBITDA ratio of (0.1)x was below the covenant test threshold of 2.5x.

The intra-month working capital cash flow cycle at Smiths News generates a routine and predictable cash swing and therefore a predictable fluctuation

in Bank Net Debt during the course of the month compared to the closing Bank Net Debt position. The Group’s average daily Bank Net Cash during

the period was £3.3m (2024: £11.7m Bank Net Debt). The Company utilises a Revolving Credit Facility (RCF) to manage the cash swing. At the balance

sheet date, £36.4m of the RCF was available and the Company had £5.4m of cash on hand giving headroom of £41.8m. Additionally the Group held

£2.8m in the EBT held for the purpose of purchasing own shares.

3i) Bank facility

The Group’s banking facility comprises an RCF of £40.0m and an uncommitted accordion facility of £10.0m. The RCF is available less committed letters

of credit amounting to £1.5m (see Note 15). The agreement is with HSBC and Santander.

The facility’s current margin is 2.45% per annum over SONIA and has a final maturity date of 2 May 2028, following the extension exercised on the

facility’s first anniversary, and with the option of a one-year extension with lender consent on the second anniversary.

3ii) Reverse stress testing

The Directors have prepared their base case forecast which represents their best estimate of cash flows over the going concern period, and in

accordance with FRC guidance have prepared a reverse stress test that identifies either insufficient liquidity or breach of the Bank Net Debt: Bank

EBITDA ratio that at peak debt would create a scenario which could lead to the facility being exhausted or becoming repayable on demand, respectively.

A point of insufficient liquidity would occur in February 2027 if EBITDA was 56% below the Board approved three-year plan. The directors consider the

likelihood of this level of downturn to be remote based on:

• current trading which is in line with expectations;

• period-on-period declines in revenues would have to be significantly greater than historical trends;

• 93% of contracts secured with publishers to 2029; and

• the Company continues to trade with adequate profit to service its debt covenants.

3iii) Mitigating actions

In the event the break environment scenario went from being remote to possible then management would seek to take mitigating actions to maintain

liquidity and compliance with the bank facility covenants. The options within the control of management would be to:

• Optimise liquidity by working capital management of the peak-to-trough intra-month movement. Utilising existing vendor management finance

arrangements;

• Utilise arrangements with retailers and optimise contractual payment cycles to suppliers which would improve liquidity headroom;

• Not pay planned dividend payments;

• Delay non-essential capex projects;

• Cancel discretionary annual bonus payments;

• Increase the principal facility amount by exercising the £10m accordion option in the RCF Facility; and

• Identify other overhead and depot savings.

More extreme mitigating actions would also be available if the scenario arose.

The Company has vendor finance arrangements in place where it has the ability to request early payment of invoices at a small discount, the payments

are non-recourse and the invoices are considered settled from both sides once payment is received. The Company has not made use of this facility

in the current or prior periods, nor since the balance sheet date.

Notes to the Accounts

Strategic Report Governance Financial Statements

143

Notes to the Accounts continued

1. Accounting policies

continued

3iv) Assessment

Having considered the above and the funding requirements of the Group and Company, the directors are confident that headroom under the bank

facility remains adequate, future covenant tests can be met and there is a reasonable expectation that the business can meet its liabilities as they fall

due for a period of greater than 12 months (being an assessment period of 16 months) from the date of approval of the Group Financial Statements.

For this reason, the directors continue to adopt the going concern basis in preparing the financial statements and no material uncertainty has

been identified.

(4) Alternate performance measures

In reporting financial information, the Group presents alternative performance measures (APMs), which are not defined or specified under the

requirements of IFRS.

The Group believes that these APMs (listed in the Glossary on page 175), are not considered to be a substitute for, or superior to, IFRS measures

but provide stakeholders with additional helpful information on the performance of the business. These APMs are consistent with how the business

performance is planned and reported to the Board and Executive Leadership Team.

The APMs do not have standardised meaning prescribed by IFRS and therefore may not be directly comparable to similar measures presented by

other companies.

(5) Estimates and judgements

The preparation of these accounts requires management to make judgements, estimates and assumptions that affect the application of accounting

policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

Key accounting judgements

The significant judgements made in the accounts are:

Revenue recognition

The Group recognises the wholesale sales price for its sales of newspapers and magazines. The Group is considered to be the principal based on the

following indicators of control over its inventory: discretion to establish prices; it holds some of the risk of obsolescence once in control of the inventory

on returns; and has the responsibility of fulfilling the performance obligation on delivery of inventory to its customers. If the Group were considered to be

the agent, revenue and cost of sales would reduce by £898.2m (2024: £937.3m).

Adjusting items

Adjusting items of income or expense are excluded in arriving at adjusted operating profit to present a further measure of the Group’s performance.

Each adjusting item is considered to be significant in nature and/or quantum, non-recurring in nature and/or considered to be unrelated to the Group’s

ordinary activities or consistent with items treated as adjusting in prior periods. Excluding these items from profit metrics provides readers with helpful

additional information on the performance of the business across periods because it is consistent with how the business performance is planned by,

and reported to, the Board and the Executive Leadership Team.

The classification of adjusting items requires significant management judgement in considering the nature and intentions of a transaction. Adjusted

measures are defined with other APMs in the Glossary on page 175.

Based on the nature of the transactions, adjusting items after tax was a credit of £1.3m (2024: credit of £0.8m) and a breakdown is included within

Note 3.

Contingent liabilities

During the period the Group has responded to information requests from the Pensions Regulator in respect of its investigation relating to the Tuffnells

defined benefit pension scheme and the Company’s former period of ownership of Tuffnells. Management has, supported by external legal advice,

applied judgement in concluding the matter to be disclosed as a contingent liability, with further details included in Note 20.

Key sources of estimation uncertainty

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which

the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and

future periods.

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a

significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next period are as follows.

Property provision

The Group holds a provision which estimates the future liabilities to restore leased premises to an agreed standard at the date the lease is terminated.

The provision is calculated using assumptions which include the length of time properties will be occupied, the discount rate applied, inflation and the

future costs of restoration and the condition of the property at the end of occupation.

A change in any of these assumptions could materially impact the provision balance. Refer to Note 19 for further details on the sensitivity of the

assumptions used to calculate the property provision. The property provision’s carrying value at the balance sheet date was £4.6m (2024: £5.2m).

144

Smiths News plc Annual Report and Accounts 2025

1. Accounting policies continued

(6) Revenue

Revenue from wholesale distribution

Revenue from wholesale distribution is recognised when products and services have been delivered to and receipted by customers and there is no

unfulfilled obligation that could affect the customer’s acceptance of the products or services.

Revenue is earned from the wholesale of products, from charges for services, being the sortation, delivery, merchandising and return of products, and

from the sale of recyclable returns waste. Products sold and handled are principally newspapers, magazines and collectables, but also include other

items such as books and greeting cards. Certain products are sold to retailers on a sale or return basis and estimation is made of the expected returns

as outlined further below.

Other revenue

Other revenue includes income from services to collect recyclate waste from customers, the short-term use of storage and space in depots and

management fees for support provided to third parties.

Returns reserve

Sale of wholesale products are typically made on a sale or return basis, the Group estimates a value of expected returns from retailers. Likewise, as the

publishers are required to provide the Group with credit for any purchase returns, so a purchase returns reserve is also required. The key estimates used

in calculating the period end reserve are rates of returns (based on historical tends), average shelf life of the product types and average margin of each

product type. These estimates are similarly applied to calculate the credit for purchase returns.

Revenue for goods supplied with a right of return is stated net of the value of any returns. Newspapers and magazines are often sold with retrospective

volume discounts based on aggregate net sales. Revenue from these sales is recognised based on the price specified in the contract, net of the

estimated volume discounts. Accumulated experience is used to estimate and provide for the discount and returns, using the expected value method,

and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. A returns reserve accrual and discount

accrual (included in trade and other payables) is recognised for expected volume discounts and refunds payable to customers in relation to sales made

until the end of the reporting period. A right to the returned goods (included in other debtors) is recognised for the products expected to be returned.

No element of financing is deemed present because the sales are made with short credit terms, which is consistent with market practice.

A receivable is recognised when the goods are delivered, since this is the point in time that the consideration is unconditional because only the passage

of time is required before the payment is due.

(7) Cost of sales and gross profit

The Group considers cost of sales to equate to cost of inventories recognised as an expense and distribution costs as these are considered to represent

for the Group direct costs of making a sale.

Gross profit is equal revenue less cost of sales.

(8) Taxation

Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent it relates to

items recognised in other comprehensive income or directly in equity. Current tax is the expected tax payable based on the taxable profit for the period,

using tax rates enacted, or substantively enacted, at the balance sheet date and any adjustment to tax payable in respect of previous periods.

Deferred tax is provided on the balance sheet using the liability method with temporary differences between the carrying amounts of assets and

liabilities for financial reporting purposes and the amounts used for taxation purposes recorded as a deferred tax asset of liability.

The amount of deferred tax provided is calculated using tax rates enacted or substantively enacted at the balance sheet date that are expected to apply

when the related deferred tax asset is realised or the deferred tax liability is settled. Deferred tax assets are recognised to the extent that it is probable

that future taxable profits will be available against which these temporary differences can be realised.

(9) Segmental reporting

The Board is responsible for allocating resources and assessing the performance of the business and is therefore identified as the chief operating

decision maker.

The Group has determined that it has one reportable segment identified as Smiths News, a UK market-leading distributor of newspapers, magazines

and ancillary products and services to retailers across the UK. The performance of Smiths News is reviewed, on a monthly basis, by the Board, making

decisions based on the Group as whole.

Included in revenues arising from Smiths News are revenues of £100.3m (2024: £100.5m) which arose from sales to the Group’s largest customer.

Three other customers contributed 13.1% (2024: 13.9%) of the Group’s revenue in the period.

No segmental analysis is required on geographical lines as substantially all of the Group’s activities are in the United Kingdom. As a result, no segmental

disclosure is provided.

(10) Dividends

Interim and final dividends are recognised in the financial statements in the period in which they are declared.

Strategic Report Governance Financial Statements

145

Notes to the Accounts continued

1. Accounting policies

continued

(11) Capitalisation of internally generated development costs

Expenditure on developed software is capitalised when the Group is able to demonstrate all of the following:

• the technical feasibility of the resulting asset;

• the ability (and intention) to complete the development and use it;

• how the asset will generate probable future economic benefits;

• adequate technical, financial and other resources to complete the development and to use the software are available; and

• the ability to measure reliably the expenditure attributable to the asset during its development.

Software costs are also capitalised if they can be hosted on another server, are portable and the Group has sole rights to the software. Subsequent to

initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the

same basis as intangible assets that are acquired separately. Software costs provided on a licence agreement (software-as-a-service) are expensed as

incurred.

(12) Interests in joint ventures

The Group Financial Statements include the Group’s share of the total recognised gains and losses in its joint ventures on an equity accounted basis.

Investments in equity accounted joint ventures are carried in the balance sheet at cost adjusted by post-acquisition changes in the Group’s share of the

net assets of the joint ventures, less any impairment losses. The carrying values of investments in joint ventures include acquired goodwill. Losses in

joint ventures that are in excess of the Group’s interest are recognised only to the extent that the Group has incurred legal or constructive obligations or

made payments on behalf of the joint venture.

(13) Business combinations – goodwill and intangibles

The Group uses the acquisition method of accounting to account for business combinations. The cost of an acquisition is measured at the fair value of

the assets given, equity instruments issued, liabilities incurred or assumed at the date of exchange. Acquisition-related costs are recognised in profit or

loss as incurred. Any deferred or contingent purchase consideration is recognised at fair value over the period of entitlement.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured, initially, at their fair values at the

acquisition date, irrespective of the extent of any non-controlling interest.

Goodwill arising on all acquisitions is initially recognised as an asset at cost and is subsequently measured at cost and accumulated impairment losses.

The carrying value of goodwill is reviewed annually for impairment or whenever events or changes in circumstances indicate that the carrying value may

not be recoverable. Intangible assets arising under a business combination (acquired intangibles) are capitalised at fair value as determined at the date

of exchange and are stated at fair value less accumulated amortisation and impairment losses. Amortisation of acquired intangibles is charged to the

income statement on a straight-line basis over the estimated useful lives as follows:

Customer relationships – 2.5 to 7.5 years

Trade name – 5 to 10 years

Software and development costs – 3 to 7 years

Computer software and internally generated development costs which are not integral to the related hardware are capitalised separately as an

intangible asset and stated at cost less accumulated amortisation and impairment losses.

All intangible assets are reviewed for impairment when there are indications that the carrying value may be higher than its recoverable value. The

recoverable value used is the value in use. The value in use is determined by estimating the future cash inflows and outflows to be derived from

continuous use of the asset and applying the appropriate discount rate to those future cash flows. Where the carrying value is higher than the calculated

value in use, an impairment loss will be recognised.

(14) Property, plant and equipment

Property, plant and equipment assets are stated at cost less accumulated depreciation and any recognised impairment losses. No depreciation has

been charged on freehold land. Other assets are depreciated, to a residual value, on a straight-line basis over their estimated useful lives, as follows:

Freehold and long-term leasehold properties – over 20 years

Short-term leasehold properties – shorter of the lease period and the estimated remaining economic life

Fixtures and fittings – 3 to 15 years

Equipment and vehicles – 2 to 12 years

All property, plant and equipment is reviewed for impairment when there are indications that the carrying value may not be recoverable.

146

Smiths News plc Annual Report and Accounts 2025

1. Accounting policies continued

(15) Leasing

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following

lease payments:

• fixed payments (including in-substance fixed payments) less any lease incentives receivable;

• variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the commencement date;

• amounts expected to be payable by the Group under residual value guarantees;

• the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and

• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case

for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds

necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

To determine the incremental borrowing rate, the Group:

• where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing

conditions since third-party financing was received;

• makes adjustments specific to the lease where applicable, for example with regards to the term and security.

The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until

they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the

right-of-use asset.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a

constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability;

• any lease payments made at or before the commencement date less any lease incentives received; and

• any initial direct costs.

Right-of-use assets are depreciated over the lease term on a straight-line basis unless the lease transfers ownership of the underlying asset to the

lessee, to which depreciation is over the useful life of the underlying asset. If the Group is reasonably certain to exercise a purchase option, the right-of-

use asset is depreciated over the underlying asset’s useful life.

Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a straight-line basis as an

expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items

of office furniture.

Extension and termination options

Extension and termination options are included in a number of property and equipment leases across the Group. These are used to maximise

operational flexibility in terms of managing the assets used in the Group’s operations. The majority of extension and termination options held are

exercisable only by the Group and not by the respective lessor.

Modifications

When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a lessee extension or termination

option being exercised), it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted

using a revised discount rate. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on

a rate or index is revised, except the discount rate remains unchanged. In both cases an equivalent adjustment is made to the carrying value of the right-

of-use asset, with the revised carrying amount being amortised over the remaining (revised) lease term. If the carrying amount of the right-of-use asset

is adjusted to zero, any further reduction is recognised in profit or loss.

(16) I nventories

Inventories comprise goods held for resale and are stated at the lower of cost or net realisable value. Inventories are recorded at purchase cost.

(17) Financial instruments

Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions

of the instrument. The Group derecognises financial assets and liabilities only when the contractual rights and obligations are transferred, discharged

or expire.

Financial assets comprise trade and other receivables and cash and cash equivalents. Financial liabilities comprise trade payables, financing liabilities

and bank borrowings.

Strategic Report Governance Financial Statements

147

Notes to the Accounts continued

1. Accounting policies

continued

(18) Financial assets

The Group classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through profit or loss (FVTPL) or through other comprehensive income (FVOCI); and

• those to be measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

Trade receivables

Trade receivables are initially measured at fair value, which for trade receivables is equal to the consideration expected to be received from the

satisfaction of performance obligations, plus any directly attributable transaction costs. Subsequent to initial recognition these assets are measured

at amortised cost less any provision for impairment losses including expected credit losses. The Group applies the simplified approach to measuring

expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables

have been grouped based on shared credit risk characteristics such as the ageing of the debt and the credit risk of the customers. An historical

credit loss rate is then calculated for each group and then adjusted to reflect expectations about future credit losses. The Group does not have any

contract assets.

Classification as trade receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for

settlement within 30 days and are therefore all classified as current. The Group holds trade receivables with the objective of collecting the contractual

cash flows, and so it measures them subsequently at amortised cost using the effective interest method. Details about the Group’s impairment policies

and the calculation of the loss allowance are provided in Note 13.

Due to the short-term nature of current receivables, their carrying amount is considered to be the same as their fair value.

Other receivables

Other receivables are recognised on trade date, being the date on which the Group has the right to the asset. Other receivables are derecognised when

the rights to receive cash flows from the other receivables have expired or have been transferred and the Group has transferred substantially all the risks

and rewards of ownership.

At initial recognition, the Group measures other receivables at their fair value plus, in the case of a financial asset not held at FVTPL, transaction costs

that are directly attributable to the acquisition of the financial asset. Transaction costs of FVTPL financial assets are expensed in profit or loss.

Subsequent measurement of other receivables depends on the Group’s business model for managing the asset and the cash flow characteristics of the

asset. The Group classifies its other receivables at amortised cost.

Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured

at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss

arising on derecognition is recognised within other gains/(losses). Impairment losses are presented separately.

The Group classifies its financial assets at amortised cost when it is held within a business model whose objective is to collect the contractual cash

flows, and the contractual terms give rise to cash flows that are solely payments of principal and interest.

The Group applies the general approach to impairment under IFRS 9 based on significant increases in credit risk rather than the simplified approach for

trade receivables using lifetime ECL.

(19) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the period which are unpaid. The amounts are

unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due

within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the

effective interest method.

(20) Treasury

Cash and cash equivalents

Cash and cash equivalents in the balance sheet and cash flow statement comprise cash at bank and in hand, short-term deposits and funds with

an original maturity of three months or less, held with the intention to meet short-term cash commitments, and it is subject to an insignificant risk

of changes in value. BACS and next-day payments are recognised at the settlement date, rather than when they are initiated, to reflect the nature of

these transactions.

Cash and cash equivalents includes amounts held by the EBT for the purpose of purchasing own shares.

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument

is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued are recorded at

the proceeds received, net of direct issue costs.

Bank borrowings

Interest-bearing bank loans and overdrafts are initially measured at fair value (being proceeds received, net of direct issue costs), and are subsequently

measured at amortised cost, using the effective interest rate method. Finance charges, including premiums payable on settlement or redemptions

and direct issue costs, are accounted for on an accruals basis and taken to the income statement using the straight-line method and are added to the

carrying value of the instrument to the extent that they are not settled in the period in which they arise.

148

Smiths News plc Annual Report and Accounts 2025

1. Accounting policies continued

(20) Treasury

continued

Modification/derecognition of financial liabilities

Financial liabilities are derecognised when there is extinguishment of the original financial liability and recognition of a new financial liability. Equally,

significant modification of the terms of the existing financial liability is accounted for as an extinguishment of the original financial liability and

recognition of a new financial liability.

Foreign currencies

Financial statements of foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition of a foreign entity, are treated

as assets and liabilities of the foreign entity and are translated at foreign exchange rates ruling at the balance sheet date. The revenues and expenses

of foreign operations are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates

of the transactions.

Foreign currency transactions

Transactions in foreign currencies are recorded using the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign

currencies at the balance sheet date are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation

are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are

translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated

at fair value are translated at foreign exchange rates ruling at the dates the fair value was determined.

(21) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event and it is probable that an outflow

of economic benefits will be required to settle the obligation. Provisions are measured at the present value of the directors’ best estimate of the

expenditure required to settle the present obligation at the balance sheet date and if this amount is capable of being reliably estimated. If such an

obligation is not capable of being reliably estimated, no provision is recognised and the item is disclosed as a contingent liability where material.

Where the effect is material, the provision is determined by discounting the expected future cash flows.

(22) Retirement benefit costs

Defined contribution schemes

The Group operates two defined contribution schemes for the benefit of its employees. Payments to the Group’s schemes are recognised as an expense

in the income statement as incurred.

(23) Employee Benefit Trust

The Smiths News Employee Benefit Trust (EBT) purchases and holds shares in the Company from the market to satisfy the demand from the Group’s

share schemes. The EBT is a separately administered trust that is funded by contributions from Group companies. The assets of the trust comprise

shares held in Smiths News plc and cash balances.

The Group consolidates the assets and liabilities of the EBT into the Group Financial Statements as a subsidiary on the basis of control. Where the

EBT holds any shares in the Company, these are deducted from equity as ‘own shares reserve’ until those shares are either cancelled or transferred

out of the EBT.

The shares held by the EBT are valued at the historical cost of the shares acquired. This value is deducted in arriving at shareholders’ funds and

presented as the own share reserve.

(24) Share schemes

Share-based payments

The Group operates several share-based payment schemes, being the Sharesave Scheme, the Executive Share Option Scheme, the LTIP and the

Deferred Bonus Plan. Details of these are provided in the Directors’ Remuneration report and in Note 24.

Equity-settled share-based schemes are measured at fair value at the date of grant. The fair value is expensed with a corresponding increase in equity

on a straight-line basis over the period during which employees become unconditionally entitled to the options. The fair values are calculated using an

appropriate option pricing model and are adjusted where a scheme includes market-based performance criteria. The income statement charge is then

adjusted to reflect expected and actual levels of vesting based on non-market performance-related criteria.

Administrative expenses and distribution and marketing expenses include the cost of the share-based payment schemes.

(25) Changes in accounting policies

During the period the Group has adopted the following accounting standards and interpretations:

• Lease Liability in a Sale and Leaseback (Amendments to IFRS 16 Leases);

• Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 Presentation of Financial Statements);

• Non-current Liabilities with Covenants (Amendments to IAS 1 Presentation of Financial Statements); and

• Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures).

The standards and amendments adopted had no impact on the financial statements to prior periods and are not expected to significantly affect the

current or future periods.

Strategic Report Governance Financial Statements

149

Notes to the Accounts continued

1. Accounting policies

continued

(25) Changes in accounting policies

continued

New standards and interpretations not yet applied

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future

accounting periods that the Group has decided not to adopt early.

IFRS 18 – Presentation and Disclosure of Financial Statements was issued in April 2024 and replaces IAS 1 – Presentation of Financial Statements.

The standard sets out new requirements for presentation in the income statement, including specified totals and subtotals, additional guidance on

aggregation and disaggregation, and additional required disclosures in respect of management performance measures (which replace alternative

performance measures).

The impact of this standard on the Group is currently being assessed. The standard is effective from 1 January 2027 with early adoption permitted.

The Group does not expect any other standards issued by the IASB, but not yet effective, to have a material impact on the Group.

(26) Restatement of comparative information

The prior period balance sheet has been restated to reclassify £4.1m of returned newspapers from inventories to trade and other receivables to correctly

reflect the nature of the balance. This has no impact on the net assets, cash flow statement, or income statement. The same reclassification of £4.1m

was also required in the 2023 period end balance sheet.

2. Operating profit

Revenue and cost of sales are analysed as follows:

		2025			2024
		Adjusting			Adjusting
£m	Adjusted	items	Total	Adjusted	items	Total
Wholesale distribution revenue	1,061.0	–	1,061.0	1,101.1	–	1,101.1
Other revenue	3.0	–	3.0	2.6	–	2.6
Total revenue	1,064.0	–	1,064.0	1,103.7	–	1,103.7
Cost of inventories recognised as an expense	(898.2)	–	(898.2)	(9 37.3)	–	(937.3)
Distribution costs	(90.7)	–	(90.7)	(93.2)	–	(93.2)
Cost of sales	(988.9)	–	(988.9)	(1,030.5)	–	(1,030.5)
Gross profit	75.1	–	75.1	73.2	–	73.2

Operating profit is stated after charging/(crediting):

£m	Note	2025	2024
Depreciation on property, plant and equipment	10	2.5	2.2
Amortisation of intangible assets	9	0.5	0.4
Depreciation on right-of-use assets	17	6.5	5.9
Short-term and low-value lease charges on equipment and vehicles		0.6	0.5
Lease rental income – land and buildings		(0.2)	(0.4)
Staff costs (excluding share-based payments)	4	46.6	44.1

Included in administrative expenses are amounts payable by the Company and its subsidiary undertakings in respect of audit and non-audit services

which are as follows:

£m	2025	2024
Fees payable to the Company’s auditor for the audit of the Group and Company’s annual accounts – BDO LLP	0.2	0.2
Fees payable to the Company’s auditor for the audit of the Company’s subsidiaries – BDO LLP	0.5	0.5
Total non-audit fees (interim review)	0.1	0.1
Total fees	0.8	0.8

Details of the Company’s policy on the use of auditors for non-audit services and how the auditor’s independence and objectivity were safeguarded are

set out in the Audit Committee Report on page 92.

150

Smiths News plc Annual Report and Accounts 2025

3. Adjusting items

£m		2025	2024
Tuffnells costs	(a)	(0.8)	0.2
Technology transformation costs	(b)	(0.7)	(0.1)
Network and reorganisation costs	(c)	(0.1)	(0.1)
Administrative expenses		(1.6)	–
Impairment reversal on trade receivables	(d)	3.7	0.6
Impairment reversal of investment in joint ventures	(e)	–	0.3
Total before tax		2.1	0.9
Taxation		(0.8)	(0.1)
Total after taxation		1.3	0.8

The Group recognised a net total adjusting items credit before tax of £2.1m (2024: £0.9m) and net credit of £1.3m (2024: £0.8m) after tax respectively.

Adjusting items are defined in the accounting policies in Note 1 and in the Glossary on page 175. In the directors’ opinion, removing these items from

the adjusted profit provides a relevant analysis of the trading results of the Group because it is consistent with how the business performance is planned

by, and reported to, the Board and Executive Team. However, these additional measures are not intended to be a substitute for, or superior to, IFRS

measures. They comprise:

Administrative expenses: £1.6m costs (2024: net £nil)

(a) Tuffnells costs: £0.8m (2024: £0.2m credit)

As part of the sale of Tuffnells Parcels Express Limited (Tuffnells) in May 2020, a contractual agreement was put in place in respect of the future

treatment and responsibility of certain insurance claims brought or notified to insurers. This agreement extinguished the Group’s exposure to new

accident and insurance claims brought after the sale of Tuffnells but which related to the Group’s period of ownership of Tuffnells up to May 2020.

During the period, a review of provisions was held in respect of all remaining claims held following utilisations in the period and as a result, the provision

was increased by £0.1m (2024: reduced by £0.2m), reflecting management’s best estimate of remaining claims brought at the period end.

In the period professional fees of £0.7m were incurred in respect of the Group responding to information requests from the Pensions Regulator in

respect of its investigation relating to the Tuffnells defined benefit pension scheme and the Company’s former period of ownership of Tuffnells.

Further details are included in Note 20.

These provisions have been reported as adjusting items on the basis that it relates to a former discontinued operation and is therefore outside the

normal course of activity. The cash impact during the period was an outflow of £1.0m (2024: £0.1m) being £0.8m of professional fees and £0.2m

(2024: £0.1m) of insurance settlements.

(b) Technology transformation costs: £0.7m (2024: £0.1m)

In the prior period a transformation programme to enhance its technology infrastructure and enable alignment to the Group’s updated vision and

strategy commenced.

Implementation costs of £0.7m (2024: £0.1m) have been recognised as adjusting items on the basis that the three-year programme is driving a

significant change to the Company and largely comprise software-as-a-service arrangements. The cash impact was an outflow of £0.7m (2024: £0.1m).

During the period, an additional £0.1m (2024: £0.1m) of costs were provided for with regards to simplifying the DMD group structure. It is expected that

this work will be concluded in the next 12 months.

The cash impact of network and reorganisation was a £0.1m outflow (2024: £0.2m outflow).

(d) Impairment provision on trade receivables: £3.7m credit (2024: £0.6m)

In respect of the administration of McColl’s Retail Group during FY2022, at FY2024 a provision of £3.8m was held, in respect of management’s best

estimate of recovery of 30% of the total claim filed representing a total of £1.7m, as per the issued notification from the administrators.

During the period, £5.4m was recovered from the administrators in final settlement of the claim, which was £3.7m higher than expected, and therefore

released and reported as an adjusting item on the same basis as previous impairment losses and reversals recognised during the prior periods. Further

details are included in Note 13.

(e) Impairment reversal of investment in joint ventures: £nil (2024: £0.3m reversal)

During the prior period, the Company reviewed the business plan for the Rascal joint venture. As a result of this review, the remaining cumulative

impairment of £0.3m was reversed, which has been presented within adjusting items to align to the previous impairment charge, which was significant

in both quantum and nature to the results of the Group.

Taxation on adjusting items increased by £0.7m to £0.8m (2024: £0.1m), driven by the release of McColl's provision noted above.

Strategic Report Governance Financial Statements

151

Notes to the Accounts continued

4. Staff costs and employees

The aggregate remuneration of employees (including Executive Directors) was:

£m	2025	2024
Wages and salaries	41.2	39.4
Social security	4.2	3.6
Pension costs	1.2	1.1
Share-based payments expense	1.3	0.9
Total	47.9	45.0

The total average number of employees (including Executive Directors) was:

	2025	2024*
Operations	1,291	1,345
Support functions	121	120
Total	1,412	1,465

* During the period, the average number of employees reported has been updated to better align to the requirements of the Companies Act. Comparatives have been restated as a result.

Defined contribution pension schemes

The Group operates two defined contribution pension schemes. For the 52 weeks ended 30 August 2025, contributions from the respective employing

company totalled £1.2m (2024: £1.1m) which is included in the income statement.

A defined contribution plan is a pension plan under which the Group pays contributions to an independently administered fund – such contributions

are based on a fixed percentage of employees’ pay. The Group has no legal or constructive obligations to pay further contributions to the fund once

the contributions have been paid. Members’ benefits are determined by the amount of contributions paid by the Company and the member, together

with investment returns earned on the contributions arising from the performance of each individual’s chosen investments and the type of pension the

member chooses to buy at retirement. As a result, actuarial risk (that benefits will be lower than expected) and investment risk (that assets invested in

will not perform in line with expectations) fall on the employee.

5. Finance costs and finance income

£m	Note	2025	2024
Interest on bank overdrafts and loans		(0.8)	(2.7)
Amortisation of loan arrangement fees*		(0.2)	(1.4)
Interest payable on leases		(2.4)	(2.0)
Total interest cost on financial liabilities at amortised cost		(3.4)	(6.1)
Unwind of discount on provisions	19	(0.2)	(0.2)
Finance costs		(3.6)	(6.3)
Finance income		0.3	0.4
Net finance costs		(3.3)	(5.9)

* During the prior period £0.8m of unamortised arrangement fees were immediately recognised on derecognition of the previous loan facility.

Finance income comprises interest received on bank deposits.

6. Income tax expense

		2025			2024
		Adjusting			Adjusting
£m	Adjusted	items	Total	Adjusted	items	Total
Current tax	8.7	0.8	9.5	8.2	0.1	8.3
Adjustment in respect of prior period	(0.3)	–	(0.3)	–	–	–
Total current tax charge	8.4	0.8	9.2	8.2	0.1	8.3
Deferred tax – current period	0.4	–	0.4	0.3	–	0.3
Total tax charge	8.8	0.8	9.6	8.5	0.1	8.6
Effective tax rate	24.6%		25.3%	25.6%		25.2%

The effective adjusted income tax rate in the period was 24.6% (2024: 25.6%). After the impact of tax recognised on adjusting items of £0.8m

(2024: £0.1m), the effective statutory income tax rate was 25.3% (2024: 25.2%).

Corporation tax is calculated at the main rate of UK corporation tax of 25% (2024: 25%). The Group has assessed its deferred tax positions using a rate

of 25%. Taxation for other jurisdictions was applied using prevailing rates.

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Smiths News plc Annual Report and Accounts 2025

6. Income tax expense continued

The tax charge for the period can be reconciled to the profit in the income statement as follows:

£m	2025	2024
Profit before tax	37.9	34.1
Tax on profit at the standard rate of UK corporation tax	9.5	8.5
Income not subject to tax	–	(0.1)
Expenses not deductible for tax purposes	0.4	0.3
Adjustment in respect of prior periods	(0.3)	0.1
Share options	–	(0.2)
Tax charge	9.6	8.6

Amounts recognised directly in equity

A current tax credit of £0.5m (2024: £0.1m) and deferred tax charge of £0.1m (2024: charge of £0.1m) was recognised directly in equity during the period.

Impact of future tax changes

The UK Government enacted legislation on 11 July 2023 to implement the Base Erosion and Profit Shifting (BEPS) Pillar Two model rules, including

a Qualified Domestic Minimum Top-Up Tax. This legislation ensures that multinational enterprises (MNEs) pay a minimum tax rate of 15% on UK and

overseas profits arising after 31 December 2023.

The period ended 30 August 2025 is the first to which these rules apply for the Group, which falls within scope of the legislation due to its UK and

international presence and revenue exceeding €750 million. However, as the Group’s business is substantially UK-based, and with its international

revenues and profits at a de minimis level, there has been no impact on the Group’s financial statements for the period.

7. Dividends

Amounts paid and proposed as distributions to equity shareholders in each period is set out below:

	2025	2024	2025	2024
Dividends proposed in the period	Per share	Per share	£m	£m
Interim dividend	1.75p	1.75p	4.2	4.2
Final dividend	3.80p	3.40p	9.2	8.2
Special dividend	3.00p	2.00p	7.3	4.8
	8.55p	7.15p	20.7	17.2
Dividends paid in the period
Final dividend – prior period	3.40p	2.75p	8.3	6.7
Special dividend – prior period	2.00p	–	4.9	–
Interim dividend – current period	1.75p	1.75p	4.2	4.2
	7.15p	4.50p	17. 4	10.8

After the balance sheet date, a final ordinary dividend of 3. 80p per share is proposed for the 52 weeks ended 30 August 2025 (53 weeks ended

31 August 2024: 3.4 0p), alongside a special dividend of 3.00p per share (2024: 2.00p), each of which is expected to be paid on 5 February 2026 to all

shareholders who are on the register of members at close of business on 9 January 2026. The ex-dividend date will be 8 January 2026.

Strategic Report Governance Financial Statements

153

Strategic Report Governance Financial Statements

153

Notes to the Accounts continued

8. Earnings per share

		2025			2024
		Weighted			Weighted
		average			average
		number of			number of
	Earnings	shares	Pence	Earnings	shares	Pence
	£m	Million	per share	£m	Million	per share
Weighted average number of shares in issue		247.7			247.7
Shares held by the Employee Benefit Trust (weighted)		(5.3)			(7.4)
Basic earnings per share (EPS)
Adjusted earnings attributable to ordinary shareholders	27.0	242.4	11.1	24.7	240.3	10.3
Adjusting items	1.3			0.8
Earnings attributable to ordinary shareholders	28.3	242.4	11.7	25.5	240.3	10.6
Diluted earnings per share (EPS)
Effect of dilutive share options		7. 8			10.8
Diluted adjusted EPS	27.0	250.2	10.8	24.7	251.1	9.8
Diluted EPS	28.3	250.2	11.3	25.5	251.1	10.2

Dilutive shares increase the basic number of shares at 30 August 2025 by 7.8m to 250.2m (31 August 2024: by 10.8m to 251.1m). The calculation of

diluted EPS reflects the potential dilutive effect of employee incentive schemes.

9. Intangible assets

		Acquired intangibles
				Internally
				generated
		Customer		development	Computer
£m	Goodwill	relationships	Trade name	costs	software costs	Total
Cost:
At 1 September 2024	5.7	2.1	0.2	2.6	2.6	13.2
Additions	–	–	–	0.2	0.4	0.6
Disposals	–	–	–	–	(0.4)	(0.4)
At 30 August 2025	5.7	2.1	0.2	2.8	2.6	13.4
Accumulated amortisation and impairment:
At 1 September 2024	(5.7)	(2.1)	(0.2)	(0.6)	(2.2)	(10.8)
Amortisation charge	–	–	–	(0.3)	(0.2)	(0.5)
Disposals	–	–	–	–	0.4	0.4
At 30 August 2025	(5.7)	(2.1)	(0.2)	(0.9)	(2.0)	(10.9)
Net book value at 30 August 2025	–	–	–	1.9	0.6	2.5
Cost:
At 27 August 2023	5.7	2.4	0.2	1.8	2.8	12.9
Additions	–	–	–	0.8	0.1	0.9
Disposals	–	(0.3)	–	–	(0.3)	(0.6)
At 31 August 2024	5.7	2.1	0.2	2.6	2.6	13.2
Accumulated amortisation and impairment:
At 27 August 2023	(5.7)	(2.4)	(0.2)	(0.4)	(2.3)	(11.0)
Amortisation charge	–	–	–	(0.2)	(0.2)	(0.4)
Disposals	–	0.3	–	–	0.3	0.6
At 31 August 2024	(5.7)	(2.1)	(0.2)	(0.6)	(2.2)	(10.8)
Net book value at 31 August 2024	–	–	–	2.0	0.4	2.4

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10. Property, plant and equipment

		Land and buildings
	Long-term	Short-term
	leasehold	leasehold	Fixtures	Equipment and
£m	improvements	improvements	and fittings	vehicles	Total
Cost:
At 1 September 2024	–	9.7	3.2	15.8	28.7
Additions	–	2.6	0.7	0.2	3.5
Disposals	–	(1.1)	(0.2)	(2.0)	(3.3)
At 30 August 2025	–	11.2	3.7	14.0	28.9
Accumulated depreciation:
At 1 September 2024	–	(6.4)	(1.6)	(11.0)	(19.0)
Depreciation charge	–	(0.9)	(0.3)	(1.3)	(2.5)
Disposals	–	1.2	0.1	2.0	3.3
At 30 August 2025	–	(6.1)	(1.8)	(10.3)	(18.2)
Net book value at 30 August 2025	–	5.1	1.9	3.7	10.7
Cost:
At 27 August 2023	0.2	9.2	3.5	17. 0	29.9
Additions	–	1.4	0.1	1.6	3.1
Disposals	(0.2)	(0.9)	(0.4)	(2.8)	(4.3)
At 31 August 2024	–	9.7	3.2	15.8	28.7
Accumulated depreciation:
At 27 August 2023	(0.2)	(6.8)	(1.7)	(12.4)	(21.1)
Depreciation charge	–	(0.5)	(0.3)	(1.4)	(2.2)
Disposals	0.2	0.9	0.4	2.8	4.3
At 31 August 2024	–	(6.4)	(1.6)	(11.0)	(19.0)
Net book value at 31 August 2024	–	3.3	1.6	4.8	9.7

11. Interests in equity accounted joint ventures

£m	2025	2024
At beginning of the period	4.6	4.4
Share of profit*	0.2	0.1
Impairment reversal	–	0.3
Dividends received	(0.2)	(0.2)
At end of the period	4.6	4.6

* During the period working capital loans of £0.3m (2024: £0.3m) were made to joint ventures that were fully impaired and presented with losses from joint ventures.

The joint ventures listed below have share capital consisting solely of ordinary shares, which are held directly by the Group.

Strategic Report Governance Financial Statements

155

Notes to the Accounts continued

11. Interests in equity accounted joint ventures

continued

Nature of investments in joint ventures

Company name/(number)	Share class	Group %		Registered address	Measurement method
Rascal Solutions Limited	Ordinary A Shares	50%		C/O Mercer & Hole, The Pinnacle,	Equity method
05191277			170	Midsummer Boulevard,
				Milton Keynes, MK9 1BP
Bluebox Systems Group	Ordinary A Shares	31.8%		Estantia House, Pitreavie Drive,	Equity method
Limited SC544863				Pitreavie Business Park, Dunfermline,
				Fife KY11 8US
Fresh On The Go Limited	Ordinary Shares	29.9%		61 Bridge Street, Kington, HR5 3DJ	Equity method
08775703

The Group owns 50% of the ordinary shares of Rascal Solutions Limited, a company incorporated in England, which in turn owns 100% of the ordinary

shares of Open-Projects Limited. The latest statutory accounts of Rascal Solutions Limited were drawn up to 31 August 2024. Rascal Solutions Limited

provides retail support services and is a strategic partnership for the Group to provide additional services to its existing customers.

Bluebox Systems Group Limited is the holding company of Bluebox Aviation Systems Ltd, the principal activity of which is the sale of innovative in-flight

entertainment systems. This business is a strategic partnership with DMD which also provides inflight media to the aviation industry.

Fresh On The Go Limited provides retail outlets with coffee vending and other related products. After the balance sheet date, the Group disposed of its

holding in Fresh On The Go Limited for consideration of £25,000.

During the period, the Group disposed of its holding in Lucid Digital Magazines Limited t/a LoveMedia for the nominal value of the shares, representing

consideration of £100.

There are no other commitments relating to its joint ventures. All joint ventures are private companies and there is no quoted market price available for

their shares.

Dividends of £0.2m (2024: £0.2m) were received in the period from joint ventures.

Rascal Solutions Limited investment

During the period Rascal Solutions Limited (Rascal) recorded a profit of £0.3m (2024: £0.3m). The Group holds £4.6m (2024: £4.6m) on the balance

sheet comprising a £2.2m (2024: £2.2m) share of net assets and £2.4m (2024: £2.4m) of goodwill. Goodwill represents the difference between the fair

value of the share of the net assets acquired and the amount paid, and forms part of the investment in the joint venture.

During the prior period, the Company reviewed the business plan for the Rascal Joint Venture, considering the cumulative previous impairment

recognised of £0.3m, and as a result of this review, the remaining impairment was reversed. There have been no new indicators of impairment identified

during the current period and therefore an impairment review has not been performed.

12. Inventories

£m	2025	2024
Goods held for resale*	12.5	17. 9
Raw materials and consumables	0.1	0.1
Total	12.6	18.0

* Comparatives have been restated as detailed in Note 1(26).

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13. Trade and other receivables

£m	2025	2024
Trade receivables	69.4	76.4
Provision for individually assessed expected credit losses (1)	–	(3.8)
Provision for collectively assessed expected credit losses	(0.1)	(0.1)
	69.3	72.5
Other debtors*	31.3	30.5
Prepayments	1.7	1.8
Accrued income	1.1	1.4
Trade and other receivables	103.4	106.2

* Comparatives have been restated as detailed in Note 1(26).

(1) Net impairment loss on trade receivables – McColl's Retail Group

During the period ended 27 August 2022, the Company received notice that McColl’s Retail Group had gone into administration. A statement of claim

was filed with the administrators for an amount of £5.5m.

At the prior period end, a provision of £3.8m was held, in respect of management’s best estimate of recovery of 30% of the total claim filed representing

a total of £1.7m, as per the issued notification from the administrators. During the period, £5.4m was recovered from the administrators in final

settlement of the claim, which was £3.7m higher than expected, and therefore released to the income statement. The remaining £0.1m was written off

to the provision.

In the prior period the expected credit loss provision of £3.8m was allocated to ‘over 90 days overdue’ matching the ageing profile of the £5.5m total

receivable due.

Trade receivables

The average credit period taken on sale is 32 days (2024: 32 days). Trade receivables are generally non-interest bearing. The following table provides

information about the Group’s exposure to credit risk and expected credit losses held against customer balances:

			2025			2024
	Gross	Individually	Collectively	Net	Gross
	carrying	assessed	assessed	carrying	carrying	Individually	Collectively	Net carrying
£m	amount	ECL	ECL	amount	amount	assessed ECL	assessed ECL	amount
Current (not overdue)	69.3	–	(0.1)	69.2	70.4	–	(0.1)	70.3
30-60 days overdue	–	–	–	–	0.1	–	–	0.1
61-90 days overdue	–	–	–	–	0.1	–	–	0.1
Over 90 days overdue	0.1	–	–	0.1	5.8	(3.8)	–	2.1
Total	69.4	–	(0.1)	69.3	76.4	(3.8)	(0.1)	72.5

The following table provides information about the Group’s loss rates applied against customer balances:

%	2025	2024
Current (not overdue)	<0.1	<0.1
1-30 days overdue	1.7	<0.1
30-60 days overdue	17.0	<0.1
61-90 days overdue	20.4	<0.1
Over 90 days overdue	31.0	70.0

Of the trade receivables balance at the end of the period:

• two (2024: two) customers had individual balances that represented more than 10% of the total trade receivables balance. The total of these was

£18.7m (2024: £20.9m); and

• a further five (2024: three) customers had individual balances that represented more than 5% of the total trade receivables balance. The total of these

was £23.8m (2024: £16.9m).

Strategic Report Governance Financial Statements

157

Strategic Report Governance Financial Statements

157

Notes to the Accounts continued

13. Trade and other receivables

continued

The movement in provision for expected credit losses for the period is detailed below:

£m	Note	2025	2024
At beginning of the period		3.9	4.5
Expected credit losses recognised		0.1	0.1
Reversal of individually assessed credit losses	3	(3.7)	(0.6)
Amounts written off as uncollectible		(0.2)	(0.1)
At end of the period		0.1	3.9

The directors consider that the carrying amount of trade and other receivables approximates their fair value which is considered to be a level 2

methodology of valuation. The inputs used to measure fair value are categorised into different levels of the fair value hierarchy (levels 1 to 3). The fair

value measurement is categorised in its entirety in the level of the lowest level input that is significant to the entire measurement.

Default occurs when the debt becomes overdue by 90 days.

The Group performed sensitivity analysis on the expected credit loss and should the default rate change from expected:

• An increase in default rate by 2% would increase the expected credit loss by £1.4m.

• A decrease in default rate by 2% would result in no credit losses.

• An increase in default rate by 5% would increase the expected credit loss by £3.4m.

• A decrease in default rate by 5% would result in no credit losses.

Other debtors and prepayments

The largest items included within this balance are returns reserve asset of £17.0m (2024: £16.9m) (refer to Note 1, section 6) and £7.1m (2024: £8.0m) of

publisher debtors.

14. Trade and other payables

£m	2025	2024
Trade payables	(87.2)	(88.4)
Other creditors	(31.7)	(32.6)
Accruals	(8.2)	(7.4)
Deferred income	(0.1)	(0.1)
	(127.2)	(128.5)

Included within other creditors is a balance of £19.8m (2024: £19.8m) relating to the returns reserve accrual. (Refer to Note 1, section 6.)

Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade

purchases is 30 days (2024: 33 days). No interest is charged on trade payables. The directors consider that the carrying amount of trade and other

payables approximates to their fair value using a level 2 valuation.

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15. Cash and borrowings

Cash and borrowings by currency (sterling equivalent) were as follows:

		Euro and	Total
£m	Sterling	other	2025	2024
Cash at bank and in hand	5.2	0.2	5.4	7.0
Cash held by the EBT to purchase own shares	2.8	–	2.8	–
Total cash and cash equivalents	8.0	0.2	8.2	7.0
Revolving credit facility	(2.1)	–	(2.1)	(18.0)
Unamortised arrangement fees – presented in non-current liabilities	0.4	–	0.4	0.4
Total borrowings	(1.7)	–	(1.7)	(17.6)
Net cash/(borrowings)	6.3	0.2	6.5	(10.6)
Total borrowings
Amounts due after 12 months	(1.7)	–	(1.7)	(17.6)
Total	(1.7)	–	(1.7)	(17.6)

The carrying amount of cash and cash equivalents approximates to their fair value.

The Group has a financing facility in place comprising a £40.0m Revolving Credit Facility (RCF) with a £10.0m accordion option. The agreement is

with HSBC and Santander. This initial arrangement had a final maturity date of 2 May 2027 with the option of two one-year extensions on the first

and second anniversaries. During the period, the first one-year extension was exercised which extended the maturity date to 2 May 2028.

At 30 August 2025, £2.1m (2024: £18.0m) of the RCF was drawn. The total available amount is £40.0m for the life of the facility. As part of the terms

of the financing, the Company and its principal trading subsidiaries provide security over their assets to the lenders. The current rate on the facility is

2.45% per annum over SONIA.

At 30 August 2025, the Company had £37.9m (2024: £22.0m) of undrawn committed borrowing facilities in respect of which all conditions precedent

had been met. This is partially reduced by letters of credit of £1.5m (2024: £1.5m); further details are included in Note 20.

During the period, the net decrease of £15.9m in total borrowings comprised £101.8m of cash inflows from drawing down the RCF and £117.7m of

cash outflows from repayment of the RCF.

Reconciliation of liabilities arising from financing activities

The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising

from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s consolidated statement of cash flows

as cash flows from financing activities.

		1 September	Financing			Other	30 August
£m	Note	2024	cash flows	New leases	Disposals	changes	2025
Revolving credit facility	16	17.6	(16.7)	–	–	1.2	2.1
Leases		30.9	(8.9)	6.6	0.5	1.4	30.5
Total		48.5	(25.6)	6.6	0.5	2.6	32.6

		27 August	Financing			Other	31 August
£m	Note	2023	cash flows	New leases	Disposals	changes	2024
Revolving credit facility	16	–	18.0	–	–	(0.4)	17.6
Term loan	16	40.2	(41.5)	–	–	1.3	–
Leases		23.2	(7.9)	11.2	–	4.4	30.9
Total		63.4	(31.4)	11.2	–	5.3	48.5

Other changes include rent increases, interest accruals and the amortisation of loan fees.

Strategic Report Governance Financial Statements

159

Notes to the Accounts continued

15. Cash and borrowings

continued

Analysis of net debt

£m	Note	2025	2024
Cash and cash equivalents*	16	8.2	7.0
Non-current borrowings	16	(1.7)	(17.6)
Net borrowings		6.5	(10.6)
Lease liabilities	17	(30.5)	(30.9)
Net debt		(24.0)	(41.5)

* Included within cash and cash equivalents is £2.8m (2024: £nil) of cash held by the EBT for the purpose of purchasing own shares.

16. Financial instruments

Treasury policy

The Group operates a centralised treasury function to manage the Group’s funding requirements and financial risks in line with the Board-approved

treasury policies and procedures and their delegated authorities. The role of Treasury is to ensure that cash financing is available for running the

businesses of the Group on a day-to-day basis, whilst minimising net interest cost. No transactions of a speculative nature are undertaken. Dealings

are restricted to those banks with suitable credit ratings and counterparty risk and credit exposure is monitored frequently.

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to

stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of debt, which includes the

borrowings, cash and cash equivalents as disclosed in Note 15 and equity attributable to equity holders of the parent, comprising issued capital,

reserves and retained earnings as disclosed in the Group statement of changes in equity.

The only externally imposed capital requirements for the Group are Bank Net Debt to Bank EBITDA and interest cover under the terms of the banking

facilities. The Group has fully complied during both the current and prior periods. To maintain or adjust its capital structure, the Group may adjust the

dividend payment to shareholders and/or issue new shares. In the prior period there was a cap on dividends of £10.0m under the banking facility;

subject to all the covenants. As part of the refinancing in May 2024, this restriction was removed.

The Board regularly reviews the capital structure. As part of this review, the Board considers the cost of capital, and the risks associated with each

class of capital. We expect free cash from operations to be sufficient to manage net debt while also maintaining an attractive total shareholder return.

The Group is targeting a Bank Net Debt: Bank EBITDA ratio below 1.0x, achieved through managing free cash from operations. The Group’s facilities

include a clause to account for lease charges under accounting standards applicable in 2019; Bank Net Debt: Bank EBITDA is stated on this basis.

Liquidity risk

The Group manages liquidity risk by maintaining adequate reserves and banking facilities and by monitoring forecast and actual cash flows.

The facilities that the Group has at its disposal to further reduce liquidity risk are described below.

As at 30 August 2025, the Group had £40.0m (2024: £40.0m) of committed bank facilities in place, comprising a £40.0m revolving credit facility (RCF),

which expires on 2 May 2028.

The facility described above is subject to the following covenants:

• Leverage cover – the Bank Net (Cash)/Debt: Bank EBITDA ratio which must remain below 2.5x. At 30 August 2025 the ratio was (0.1x) (2024: 0.3x);

• Interest cover – the consolidated net interest: Bank EBITDA ratio which must remain above 4x. As at 30 August 2025 the ratio was 79x (2024: 17.9x);

and

• Guarantor cover – the annual turnover, gross assets and pre-tax profits of the guarantors under the banking facilities contribute, at any time, 90% or

more of the annual consolidated turnover, gross assets and pre-tax profits of the Group for each period. The guarantors, which are all 100% owned or

wholly owned subsidiaries of Smiths News plc, comprise Smiths News plc, Smiths News Holdings Limited, and Smiths News Trading Limited.

At 30 August 2025, the Group had available £36.4m (2024: £20.5m) of undrawn committed borrowing facilities comprising the £37.9m (2024: £22.0m)

RCF above less letters of credit of £1.5m (2024: £1.5m). In addition, the facility includes a £10m accordion facility option. There were no breaches of loan

agreements during either the current or prior periods.

As the Group is cash generative its liquidity risk is considered low. The Group’s cash generation allows it to meet all loan commitments as they fall due

as well as sustain a negative working capital position.

The Group invests significant resources in the forecasting and management of its cash flows. This is critical given a routine cash cycle at Smiths News

that results in significant predictable swings within each month; the Group’s average gross borrowing for the period was £6.6m (2024: £26.7m). The

Group has available funding via the undrawn RCF and a £10m accordion facility option.

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16. Financial instruments continued

The following is an analysis of the undiscounted contractual cash flows payable under non-derivative financial liabilities. The undiscounted cash flows

will differ from both the carrying value and fair value. Floating rate interest is estimated using the prevailing rate at the balance sheet date.

		Due	Due
		between	between	Greater
	Due within	1 and	2 and	than
£m	1 year	2 years	3 years	3 years	Total
2025
Bank and other borrowings	(2.1)	–	–	–	(2.1)
Trade and other payables	(127. 2)	–	–	–	(127. 2)
Leases	(7.8)	(7. 1)	(6.0)	(18.2)	(39.1)
Total	(137.1)	(7.1)	(6.0)	(18.2)	(168.4)
2024
Bank and other borrowings	(18.0)	–	–	–	(18.0)
Trade and other payables	(128.5)	–	–	–	(128.5)
Leases	(7.6)	(6.8)	(6.0)	(19.8)	(40.2)
Total	(154.1)	(6.8)	(6.0)	(19.8)	(186.7)

Counterparty risk

Dealings are restricted to those banks with suitable credit ratings and counterparty risk and credit exposure is monitored.

Foreign currency risk

• The majority of the Group’s transactions are carried out in the functional currencies of its operations, and so transactional exposure is limited.

• The majority of the Group’s net assets are held in Sterling, with £0.4m (2024: £0.6m) of net assets held in overseas currencies. Translation exposure

arises on the retranslation of overseas subsidiaries’ profits and net assets into Sterling for financial reporting purposes and is not seen as significant.

• Note 15 denotes borrowings by currency, with no material currency exposures to disclose.

Interest rate risk

The Group monitors its exposure to interest rate in light of the Group’s debt exposure, consideration of the macroeconomic environment and sensitivity

to potential interest rate rises. The Group avoids the use of derivatives or other financial instruments in circumstances when the outcome would

effectively be largely dependent upon speculation on future rate movements. The Group does not consider interest rate risk to be sensitive.

Credit risk

The Group considers its exposure to credit risk to be as follows:

£m	2025	2024
Bank deposits and money market funds	8.2	7.0
Trade and other receivables*	100.6	103.0
	108.8	110.0

* Comparatives have been restated as detailed in Note 1(26).

Further detail on the Group’s policy relating to trade receivables and other receivables can be found in Note 13.

Strategic Report Governance Financial Statements

161

Notes to the Accounts continued

17. Leases

The balance sheet shows the following right-of-use assets in relation to leases:

	Equipment and	Land and
£m	vehicles	buildings	Total
Cost:
At 1 September 2024	1.5	49.2	50.7
Additions	1.2	5.6	6.8
Disposals	(0.4)	(4.2)	(4.6)
At 30 August 2025	2.3	50.6	52.9
Accumulated depreciation:
At 1 September 2024	(0.9)	(20.3)	(21.2)
Depreciation charge	(0.3)	(6.2)	(6.5)
Disposals	0.4	3.8	4.2
At 30 August 2025	(0.8)	(22.7)	(23.5)
Net book value at 30 August 2025	1.5	27.9	29.4
Cost:
At 27 August 2023	2.0	38.4	40.4
Additions	0.3	13.3	13.6
Disposals	(0.8)	(2.5)	(3.3)
At 31 August 2024	1.5	49.2	50.7
Accumulated depreciation:
At 27 August 2023	(1.4)	(17. 2)	(18.6)
Depreciation charge	(0.3)	(5.6)	(5.9)
Disposals	0.8	2.5	3.3
At 31 August 2024	(0.9)	(20.3)	(21.2)
Net book value at 31 August 2024	0.6	28.9	29.5

Amounts recognised in respect of leases

£m	2025	2024
Interest expense (included in finance cost)	2.4	2.0
Expense relating to low-value leases (included in cost of sales and administrative expenses)	0.6	0.5
Property rental income	(0.2)	(0.4)
Total cash outflow from leases	8.9	7.9

Maturity analysis of lease liabilities

£m	2025	2024
Current	(5.6)	(5.5)
Non-current	(24.9)	(25.4)
Total	(30.5)	(30.9)

Amounts recognised as lessor:

At the balance sheet date, the Group had contracted with tenants for the following future minimum lease payments:

£m	2025	2024
Within one year	0.2	0.3
In the second to fifth years inclusive	0.2	0.6
	0.4	0.9

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18. Deferred tax

Deferred tax assets and liabilities are attributable to the following:

		Share-	Other
		based	temporary
£m	Fixed assets	payments	differences	Total
At 1 September 2024	–	0.9	0.4	1.3
Charge to income	(0.3)	(0.1)	–	(0.4)
Charge to equity	–	(0.1)	–	(0.1)
At 30 August 2025	(0.3)	0.7	0.4	0.8
Deferred tax assets	–	0.7	0.4	1.1
Deferred tax liabilities	(0.3)	–	–	(0.3)
At 27 August 2023	0.4	1.0	0.3	1.7
(Charge)/credit to income	(0.4)	–	0.1	(0.3)
Charge to equity	–	(0.1)	–	(0.1)
At 31 August 2024	–	0.9	0.4	1.3
Deferred tax assets	–	0.9	0.4	1.3

The deferred tax assets have been deemed recoverable as the Group forecasts that it will continue to make profits against which the assets can be

utilised for tax purposes.

The Group has capital losses carried forward of £20.2m (2024: £20.2m). Deferred tax assets of £5.1m (2024: £5.1m) have not been recognised in respect

of the capital losses carried forward due to the uncertainty of their utilisation. These capital losses do not have an expiry period.

Deferred tax assets and liabilities at the period end have been calculated based on the rate of 25% substantively enacted at the balance sheet date on

the basis that the temporary differences are expected to unwind when that rate applies.

19. Provisions

		Insurance
	Reorganisation	and legal	Property
£m	provisions	provisions	provisions	Total
At 1 September 2024	(0.2)	(0.5)	(5.2)	(5.9)
Transfer	0.1	(0.1)	–	–
Charged to income statement	(0.1)	(0.1)	–	(0.2)
Credited to income statement	–	–	0.2	0.2
Utilised in period	0.1	0.3	0.6	1.0
Unwinding of discount utilisation	–	–	(0.2)	(0.2)
At 30 August 2025	(0.1)	(0.4)	(4.6)	(5.1)

£m	2025
Included within current liabilities	(0.5)
Included within non-current liabilities	(4.6)
Total	(5.1)

Reorganisation provisions of £0.1m (2024: £0.2m) relate to the restructure of the DMD business, the Smiths News network and the Group’s support

functions.

Insurance and legal provisions represent the expected future costs of employer’s liability, public liability, motor accident claims and legal claims; included

within the total balance is £0.4m (2024: £0.5m) relating to claims from the Tuffnells business prior to disposal.

The property provision represents the estimated future cost of dilapidation costs across the Group. These provisions have been discounted to present

value and this discount will be unwound over the life of the leases. The provisions cover the period to 2035 with all of the liability falling within ten years

and greater than one year.

The Group has performed sensitivity analysis on the property provision using the possible scenarios below:

If the discount rate changes by +/- 0.5%, the property provision would change by +/- £0.2m (2024: +/- £0.1m).

If the repair cost per square foot changes by +/-£1.00p, the property provision would change by +/- £0.5m (2024: +/- £0.3m).

Strategic Report Governance Financial Statements

163

Notes to the Accounts continued

20. Contingent assets, liabilities and capital commitments

Bank and other guarantees

As at 30 August 2025, the Group had approved letters of credit of £1.5m (2024: £1.5m) to the insurers of the Group for the motor insurance and

employer liability insurance policies. The letters of credit cover the employer deductible element of the insurance policy for insurance claims.

Administration of Tuffnells Parcels Express Limited (Tuffnells)

As reported in Note 3, during the year the Company incurred £0.7m of legal costs in considering and responding to two extensive enquiry requests

(October 2024 and June 2025) from the Pension Regulator (tPR) in relation to tPR’s ongoing investigation into the Tuffnells defined benefit pension

scheme and the Company’s period of ownership of Tuffnells, which had concluded with its sale in May 2020.

The Company has continued to engage with tPR after period end and understands that the Company remains part of tPR’s investigations as one

of a number of potential targets relevant to its regulatory powers under the Pensions Act 2004.

tPR are yet to issue a Warning Notice as at the date of these financial statements, and it is not known when, or if it will be issued (up to tPR’s stated

statutory deadline of 20 February 2026). The Board has nevertheless considered the nature and circumstances of tPR’s investigation to date and

concluded, at the date of authorisation of the financial statements, that no provision is required, particularly given that no Warning Notice has been

issued, it remains uncertain at this time as to how tPR may proceed with the information before it or whether any future obligation (including the nature

thereof) will arise at all, and the Company therefore does not currently have a present obligation that could lead to an outflow of resources. Accordingly,

the Board has concluded that the matter represents a possible obligation only and has disclosed a contingent liability.

tPR has communicated that the Tuffnells defined benefit scheme had an estimated s75 liability of £3.355m (however the final certified liability is yet to

be confirmed) and that any Warning Notice, if issued, will be made under its wide-ranging Financial Support Direction powers available to it (which are

based on a “no-fault” liability-regime).

With support of legal advice, the Board maintains the view that the Company has acted reasonably throughout its time as parent of Tuffnells and notes

that it was an overall net contributor of funding to Tuffnells during its period of ownership. The Company continues to make itself available to provide

further assistance to tPR as required.

Indemnity coverage

On winding up of the News Section of the WH Smith Pension Trust defined benefit pension scheme in December 2021, the Company has agreed

run-off indemnity coverage for any member claims that were uninsured liabilities capped at £6.5m over the following 60 years. The Group is not aware

of any claims brought during either the current or prior reporting period.

Reversionary lease

Other potential liabilities that could crystallise are in respect of the previous assignment of a lease where the liability could revert to the Group if the

lessee defaulted. Pursuant to the terms of the Demerger Agreement from WH Smith PLC in 2006, any such contingent liability in respect of assignment

prior to demerger, which becomes an actual liability, will be apportioned between Smiths News plc and WH Smith PLC in the ratio 35:65 (provided that

the actual liability of Smiths News plc in any 12-month period does not exceed £5m). The Company’s share of the rental commitment at 30 August 2025

was £0.9m (2024: £0.4m), which increased during the period following a review of market rent. This lease is expected to end in 2033.

Capital commitments

Contracts placed for future capital expenditure approved by the Directors but not provided for amount to £0.1m (2024: £2.2m).

164

Smiths News plc Annual Report and Accounts 2025

21. Net cash inflow from operating activities

£m	Note	2025	2024
Operating profit	3	41.2	40.0
Impairment reversal of investment in joint venture	11	–	(0.3)
Share of loss of joint ventures	11	0.1	0.2
Depreciation of property, plant and equipment	10	2.5	2.2
Depreciation of right-of-use assets	17	6.5	5.9
Amortisation of intangible assets	9	0.5	0.4
Share-based payments		1.3	0.9
Decrease/(increase) in inventories		5.4	(4.4)
Decrease/(increase) in receivables		1.4	(1.0)
Decrease in payables		(1.4)	(12.2)
Decrease in provisions		(0.8)	(0.8)
Income tax paid		(8.8)	(8.5)
Refund of tax on pension surplus*		1.5	–
Net cash inflow from operating activities		49.4	22.4
Net cash flow from operating activities is stated after the following adjusting items:	3
Recovery of McColl's trade receivables		5.4	–
Refund of tax on pension surplus*		1.5	–
Tuffnells costs		(1.0)	(0.1)
Technology transformation costs		(0.7)	(0.1)
Network and reorganisation costs		(0.1)	(0.2)
Total adjusting items cash flow		5.1	(0.4)

* During the period, the Company received a £1.5m refund of an overpayment of tax made in respect of the wind up of the News Section of the WH Smith Pension Trust defined benefit pension scheme during

FY2022. This amount has been presented in other comprehensive income consistent with the original £5.1m charge recognised during FY2022.

22. Share capital

(a) Share capital

£m	2025	2024
Issued, authorised and fully paid:
247.7m (2024: 247.7m) ordinary shares of 5p each	12.4	12.4

(b) Movement in share capital

	Ordinary shares
Number (m)	of 5p each
At 31 August 2024 and at 30 August 2025	247.7

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the general

meetings of the Company. The Company has one class of ordinary shares, which carry no right to fixed income.

No shares were issued during the current or prior periods.

£m	2025	2024
At 31 August 2024 and at 30 August 2025	60.5	60.5

Strategic Report Governance Financial Statements

165

Notes to the Accounts continued

23. Reserves

(a) Demerger reserve

£m	2025	2024
At 31 August 2024 and at 30 August 2025	(280.1)	(280.1)

The demerger reserve was created on demerger of the Group from WH Smith PLC in 2006. The balance represented the difference between the share

capital and reserves of the Group restated on a pro-forma basis as at 31 August 2004 and the previously reported share capital.

(b) Own shares reserve

£m	2025	2024
At beginning of the period	(3.7)	(4.4)
Acquired in the period	(1.6)	(3.3)
Disposed of on exercise of options	2.4	4.0
At end of the period	(2.9)	(3.7)

The reserve represents the cost of shares in Smiths News plc purchased in the market and held by the Smiths News Employee Benefit Trust (EBT) to

satisfy awards and options granted under the Group’s Executive Share Schemes (see Note 24). The number of ordinary shares held by the EBT as at 30

August 2025 was 5,665,315 (2024: 8,031,253). In accordance with IAS 32, these shares are deducted from shareholders’ funds. Under the terms of the

EBT, the Trustee has waived all dividends on the shares it holds.

£m	2025	2024
At beginning of the period	0.2	0.4
Currency translation differences	–	(0.2)
At end of the period	0.2	0.2

24. Share-based payments

The Group recognised a total charge of £1.3m (2024: £0.9m) related to equity-settled share-based payment transactions during the period. The average

share price throughout the period was 58.2p (2024: 51.5p).

The Group operates the following share incentive schemes:

Sharesave Scheme	Under the terms of the Group Sharesave Scheme, the Board grants options to purchase ordinary shares in the
	Company to eligible employees who enter into an HM Revenue & Customs approved Save-As-You-Earn (SAYE)
	savings contract for a term of three years. Options are granted at up to a 20% discount to the market price of the
	shares on the day preceding the date of offer and are normally exercisable for a period of six months after completion
	of the SAYE contract.
LTIP	Under the terms of the Group LTIP, executive directors and key senior executives are awarded each year entitlements
	to ordinary shares in the Company (which may be in the form of nil cost options or conditional awards) or, in order
	to retain flexibility and at the Company’s discretion, a cash sum linked to the value of a notional award of shares up
	to a value of 200% of base salary. The vesting of awards is subject to the satisfaction of three-year performance
	conditions, which is determined by the Remuneration Committee at the time of grant. Subject to the satisfaction of the
	performance conditions, awards are normally exercisable until the tenth anniversary of the date of grant.
Deferred Bonus Plan (DBP)	Under the terms of the Group Deferred Bonus Plan, each year Executive Directors and key senior executives are
	granted share awards (in the form of nil cost options) dependent on the achievement of the Annual Bonus Plan
	performance targets. Awards are immediately exercisable, but a two-year hold-back period applies, during which the
	share certificate for such shares is held by the Company. Separately, key senior executives may also be granted share
	awards (in the form of nil cost options) under the DBP plan in respect of a (discounted) restricted share award which
	are dependent on continued employment with the Company.

166

Smiths News plc Annual Report and Accounts 2025

24. Share-based payments continued

Details of the options/awards are as follows:

		Sharesave	ESOS		LTIP		DBP
		Weighted		Weighted		Weighted		Weighted
		average		average		average		average
	No. of	exercise	No. of	exercise	No. of	exercise	No. of	exercise
	shares	price (p)	shares	price (p)	shares	price (p)	shares	price (p)
At 26 Aug 2023	7, 960, 613	30.38	800,450	125.3	9,368,088	–	1,221,981	–
Granted	1,603,582	60.80	–	–	2,994,040	–	1,389,805	–
Exercised	(4,415,748)	–	–	–	(3,167,125)	–	(1,424,789)	–
Expired/Forfeited	(302,050)	42.83	(340,412)	189.5	(201,737)	–	(18)	–
At 31 Aug 2024	4,846,397	50.75	460,038	153.9	8,993,266	–	1,186,979	–
Granted	1,270,955	61.60	–	–	2,474,769	–	1,279,212	–
Exercised	(1,347,405)	–	–	–	(2,261,850)	–	(1,323,209)	–
Expired/Forfeited	(327,398)	56.75	(460,038)	153.9	(2,988,807)	–	(28,967)	–
At 30 Aug 2025	4,442,549	55.50	–	–	6,2 17,378	–	1,114,015	–
Exercisable at 30 Aug 2025	–	–	–	–	–	–	–	–
Exercisable at 31 Aug 2024	–	–	460,038	153.9	–	–	–	–

The weighted average remaining contractual life in years of options/awards is as follows:

	Sharesave	ESOS	LTIP	DBP
Outstanding at 30 August 2025	1.7	–	1.2	1.6
Outstanding at 31 August 2024	1.0	0.3	1.2	1.6

Details of the options/awards granted or commencing during the period were as follows:

	Sharesave	ESOS	LTIP	DBP
During 2025:
Effective date of grant or commencement date	Jul 2025	–	Dec 2024	Dec 2024
Average fair value at date of grant or scheme commencement – pence	11.9	–	43.5	60.6
During 2024:
Effective date of grant or commencement date	Jul 2024	–	Dec 2023	Dec 2023
Average fair value at date of grant or scheme commencement – pence	16.4	–	32.6	47.6

The options outstanding at 30 August 2025 had exercise prices ranging from nil to 49.3p (2024: nil to 48.9p). The weighted average share price on the

date of exercise was 60.3p (2024: 45.4p).

Sharesave options granted during each period have been valued using the Black-Scholes model. LTIP performance measures include a 60% (2024:

60%) total shareholder return (TSR) metric which is valued by reference to the share price at date of grant less an adjustment for the TSR portion of the

award. The DBP schemes are valued by reference to the share price at the date of grant.

Strategic Report Governance Financial Statements

167

Notes to the Accounts continued

24. Share-based payments

continued

The inputs to the Black-Scholes model are as follows:

	Sharesave	LTIP	DBP
2025 options/awards:
Share price at grant date – pence	61.6	61	61
TSR adjustment – pence	–	(29)	–
Exercise price – pence	49.3	–	–
Expected volatility – per cent	33.6	–	–
Expected life – years	3	–	–
Risk free rate – per cent	3.8	–	–
Expected dividend yield – per cent	9.13	–	–
Weighted average fair value – pence	11	43	60
2024 options/awards:
Share price at grant date – pence	60.8	48	48
TSR adjustment – pence	–	(25)	–
Exercise price – pence	48.9	–	–
Expected volatility – per cent	69.5	–	–
Expected life – years	3	–	–
Risk free rate – per cent	3.9	–	–
Expected dividend yield – per cent	7.4 8	–	–
Weighted average fair value – pence	16	33	48

25. Post balance sheet events

The Directors have considered the period between the balance sheet date and the date when the accounts are authorised for issue for evidence of

conditions that existed at the balance sheet date, either adjusting or non-adjusting post balance sheet events, and have concluded that there are no

other events in the current period.

26. Related-party transactions

Transactions between businesses within the Group which are related parties have been eliminated on consolidation and are not disclosed in this note.

Trading transactions

		Sales to related parties
£m	2025	2024
Joint ventures	0.4	0.4

Sales to related parties are for management fees and payment is due on the last day of the month following the date of invoice. There were no amounts

owed by related parties in either period.

	There were no non-trading transactions with related parties during either period.
Directors’ remuneration

£m	2025	2024
Salaries	0.9	0.8
Bonus	0.7	0.6
Non-executive director fees	0.4	0.4
	2.0	1.8

Information concerning Directors’ remuneration, interest in shares and share options is included in the Directors’ Remuneration report.

There are two (2024: two) Directors to whom retirement benefits are accruing in respect of qualifying services under money purchase schemes.

Directors made gains on share options of £nil (2024: £nil).

Key management personnel (including directors)

The remuneration of the Directors and the Executive Leadership Team, who are the key management personnel of the Group, is set out below in

aggregate for each of the categories specified in IAS 24 ‘Related Party Disclosures’.

£m	2025	2024
Short-term employee benefits	3.2	3.0
Share-based payments	0.9	0.8
	4.1	3.8

168

Smiths News plc Annual Report and Accounts 2025

27. Subsidiary and associated undertakings

The table below summarises the interests of the Group as at 30 August 2025:

Company name/(number)	Share class	Group %	Company name/(number)			Share class	Group %
United Kingdom
Rowan House, Cherry Orchard North, Kembrey Park, Swindon SN2 8UH
Connect Limited	Ordinary Shares	100%	Dawson Holdings Ltd(*)			Ordinary Shares	100%
02008952			00034273
Connect Logistics Limited	Ordinary Shares	100%	Martin Lavell Limited(*)			Ordinary Shares	100%
09172965			02654521
Connect News & Media Limited	Ordinary Shares	100%	Pass My Parcel Limited			Ordinary Shares	100%
08572634			09172022
Connect Parcel Freight Limited	Ordinary Shares	100%	Smiths News Holdings Limited			Ordinary Shares	100%
09295023			04236079
Connect Parcels Limited	Ordinary Shares	100%	Smiths News Instore Limited			Ordinary Shares	100%
09172850			03364589
Connect Services Limited	Ordinary Shares	100%	Smiths News Investments Limited(*)			Ordinary Shares	100%
08522170			06831284
Connect Specialist Distribution	Ordinary Shares	100%	Smiths News Distribution Limited			Ordinary Shares	100%
Group Limited			08506961
08458801
Connect2U Limited	Ordinary Shares	100%	Smiths News Trading Limited			Ordinary Shares	100%
03920619			00237811
Dawson Media Services Limited	Ordinary Shares	100%	Dawson Limited			Ordinary Shares	100%
06882722			03433262
Dawson Guarantee Company Limited	Ordinary Shares	100%	Dawson Media Direct Limited(*)			Ordinary Shares	100%
06882393			06882366
Germany
Dawson Media Direct GmbH	Ordinary Shares	100%	Johannstr. 39	40476	Dusseldorf, Germany
HRB 96649
Thailand
Dawson Media Direct Company Limited	Ordinary Shares	48.9%	87 M Thai Tower, All Seasons Place, 23rd Floor, Wittayu Road,
105558138385			Lumpini Sub-District, Pathumwan District, Bangkok, Thailand

* Audit exemption statement

For the 52 weeks ended 30 August 2025, the companies as indicated in the table by ‘(*)’ above were entitled to exemption from audit under section

479A of the Companies Act 2006 relating to subsidiary companies. As such, Smiths News plc has provided a guarantee against all debts and liabilities

in these subsidiaries as at 30 August 2025. The members of these companies have not required them to obtain an audit of their financial statements for

the 52 weeks ended 30 August 2025.

Structured entities

Further to the above, the Group consolidates the Smiths News Employee Benefit Trust (EBT), a trust for the purpose of purchasing and holding shares

in Smiths News plc to satisfy share schemes. The trust is registered with and administered by Computershare Trustees (Jersey) Limited (‘’the Trustee’’),

13 Castle Street, St Helier, JE1 1ES, Jersey.

Strategic Report Governance Financial Statements

169

Company Balance Sheet

As at 30 August 2025

£m Note 2025 2024

Fixed assets

Investments in subsidiary undertakings 3 225.7 402.5

Current assets

Cash at bank and in hand 0.1 –

Debtors 4 – 30.6

Total assets 225.8 433.1

Current liabilities

Creditors: Amounts due within one year 5 (30.0) (229.8)

Net current liabilities (29.9) (199.2)

Net assets 195.8 203.3

Capital and reserves

Called up share capital 6(a) 12.4 12.4

Share premium account 6(c) 60.5 60.5

Retained earnings 7 122.9 130.4

Total shareholders’ funds

195.8

203.3

The result for the period was a profit of £8.6m (2024: £18.9m).

These accounts were approved by the Directors on 3 November 2025.

Signed on behalf of the Board of Directors

Jonathan Bunting Paul Baker

Chief Executive Officer Chief Financial Officer

Registered number – 05195191

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Smiths News plc Annual Report and Accounts 2025

Company Statement of Changes in Equity

For the 52 weeks ended 30 August 2025

£m Note

capital

premium

Retained

earnings Total

Balance at 27 August 2023 12.4 60.5 122.3 195.2

Profit for the period and total comprehensive income – – 18.9 18.9

Dividend paid – – (10.8) (10.8)

Balance at 31 August 2024 and 1 September 2024 12.4 60.5 130.4 203.3

Share-based payments – – 1.3 1.3

Profit for the period and total comprehensive income – – 8.6 8.6

Dividend paid – – (17.4) (17.4)

Balance at 30 August 2025

12.4 60.5 122.9 195.8

Strategic Report Governance Financial Statements

171

Notes to the Company balance sheet

1. Accounting policies

(a) Accounting convention

The separate financial statements of the Company are presented as required by the Companies Act 2006. The Company meets the definition of a

qualifying entity under FRS 100 (Financial Reporting Standard 100) issued by the Financial Reporting Council. Accordingly, the financial statements

have been prepared in accordance with FRS 101 (Financial Reporting Standard 101) ‘Reduced Disclosure Framework’ as issued by the Financial

Reporting Council.

The Company has taken advantage of section 408 of the Companies Act 2006 not to present a profit and loss account and related notes.

The Company has taken advantage of the following disclosure exemptions under FRS 101:

• the requirements of paragraphs 10(d), 10(f), 39(c) and 134-136 of IAS 1 Presentation of Financial Statements;

• the requirements of IAS 7 Statement of Cashflows;

• the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors; and

• the requirements of IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group,

provided that any subsidiary which is a party to the transaction is wholly owned by such a member.

In addition, and in accordance with FRS 101, further disclosure exemptions have been applied because equivalent disclosures are included in the Group

Financial Statements, including:

• the requirements of paragraphs 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets;

• paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share-based payment’ (details of the number and weighted average exercise prices of options, and how the

fair value of goods and services received was determined); and

• IFRS 7, ‘Financial Instruments: Disclosures’.

The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are the same as those set out in

Note 1 to the Group Financial Statements except as noted below.

Critical accounting estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies

and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and

various other factors that are considered to be reasonable under the circumstances, the results of which form the basis of making judgements about the

carrying value of assets and liabilities which are not readily apparent from other sources. Actual results may differ from these estimates. The estimates

and underlying assumptions are reviewed on an ongoing basis and any revisions to them are recognised in the period in which they are revised.

Estimated impairment of investments

Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable or where a

previous impairment has been recognised. When a review for impairment is conducted, the recoverable amount (determined as the higher of value in

use or fair value less cost to sell) is determined using value in use calculations as the fair value is not readily determinable.

The value in use method requires the Company to determine appropriate assumptions in relation to the cash flow projections over the three-year

plan period (which is a key source of estimation uncertainty), the growth rate to be applied beyond this three-year period and as part of the terminal

value calculation the post-tax discount rate used to discount the assumed cash flows to present value. The assumption that cash flows continue into

perpetuity is a source of significant estimation uncertainty.

(b) Investments in subsidiary undertakings

Investments in subsidiary undertakings are held at historical cost less provision for impairment.

Trade payables are measured at amortised cost.

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

Financial assets and financial liabilities are recognised on the Company’s balance sheet when the Company becomes a party to the contractual

provisions of the instrument.

(d) Taxation

Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted at

the balance sheet date.

(e) Employee Benefit Trust

The Smiths News Employee Benefit Trust holds shares of the Company for the purpose of settling share-based payment plans for the Group’s

employees and is deemed a subsidiary of the Company on the basis of control. Smiths News Trading Limited, a subsidiary of the Company, provides

funding to the trust for this purpose and the amounts are recognised as a capital contribution by the Company within investments. Any reduction from

the purchase of shares is treated as a repayment of capital contribution.

2. Result for the period

The Company has not presented its own profit and loss account as permitted by section 408 of the Companies Act 2006. The result for the period

attributable to shareholders, which is stated on an historical cost basis, was a profit of £8.6m (2024: profit of £18.9m). There were no other recognised

gains or losses. Dividends paid in the period totalled £17.4m (2024: £10.8m) (refer to Note 7 of the Group financial statements).

172

Smiths News plc Annual Report and Accounts 2025

3. Investments in subsidiary undertakings

At 30 August 2025, the carrying value of the Company’s investment in subsidiary was £225.7m (2024: £402.5m) with a cumulative impairment provision

of £460.2m (2024: £282.2m*).

£m 2025 2024*

Net book value:

At beginning of the period 402.5 383.6

Additions* 1.3 –

Impairment (charge)/reversal (178.1) 18.9

At end of the period

225.7

402.5

* Note: The comparative information for 2024 has been restated for to correct the cumulative impairment from £260.4m to £282.2m which was previously misstated in error. This disclosure error has no impact

on net assets or profit for the prior period. Additions relate to £1.3m invested by way of capital contribution in respect of equity settled share-based payments relating to employees of its subsidiaries.

During the period, a dividend of £186.7m was received from Smiths News Holdings Limited (the Company’s immediate subsidiary) which had the

impact of increasing retained earnings in the Company but lowering the net value in the subsidiary. This reduction in net value, alongside the net book

value of investment versus the derived market capitalisation of the Group triggered an impairment review.

The impairment review was based on the Group’s value in use adjusted for net debt, and included a sensitivity analysis on the key inputs including the

discount rate and on scenarios which might affect the Group’s future cash flows.

As a result of the impairment review, the Directors concluded that it was appropriate to increase the previously recognised cumulative impairment of

£282.2m by £178.1m representing the modelled estimate of the Group’s value in use being lower than the carrying amount of the Company’s investment

in subsidiary largely driven by the £186.7m dividend which transferred value from the Company’s subsidiary during the period.

The Company reviewed the component cash flows within the Group during the period in the light of management changes made, most notably the

recruitment of a Managing Director of Recycle within the growth verticals. These components have therefore been updated to comprise Smiths News,

Growth verticals (Growth), and its joint venture investment in Rascal Solutions Limited (Rascal). Dawson Media Direct group (DMD) was consolidated

into Smiths News.

The Company prepares cash flow forecasts derived from the most recent three-year plan budget. Cash flows beyond this three-year period are

extrapolated using a terminal growth rate based on management’s future expectations.

The key assumptions in the value in use calculations were as follows:

2025 2024

Assumptions applied

Smiths

News Growth Rascal

Smiths

News Growth Rascal

Post-tax discount rate 9.8% 19.8% 11.8% 11.2% 11.2% 13.2%

Terminal value (decline)/growth rate

(3%) 2% 2%

0% 0% 2%

The post-tax discount rates are derived from a risk-adjusted weighted cost of capital using an average market participant capital structure, the inputs of

which include a UK risk free rate, risk premium, small company risk premium and a risk adjustment (beta).

The market which Smiths News operates is in long-term structural decline and it is assumed that revenue is expected to fall each year over the longer

term. This, in conjunction with updating the component cash flows, resulting in moving to a terminal value decline of 3% (2024: 0%).

As disclosed in the accounting policies (see Note 1), the cash flows used within the impairment model are based on assumptions which are sources

of estimation uncertainty and small movements in these assumptions could lead to a change in the impairment loss. Management has performed

sensitivity analysis on the key assumptions in the impairment model using reasonably possible changes in these key assumptions and in reference to

the Company’s principal risks.

Impairment

£m

Impact to

carrying

value

£m

Expected case (178.1) –

+1% Discount rate (192.0) (14.0)

-1% Discount rate (161.8) 16.3

+1% TGR (167.8) 10.2

-1% TGR (186.8) (8.7)

Scenario 1 (206.4) (28.4)

Scenario 2 (188.1) (10.0)

Scenario 1 – Assumes gross profit from newspapers and magazines is reduced by 3%

Scenario 2 – Assumes profit from growth initiatives is reduced by 50%

Strategic Report Governance Financial Statements

173

4. Debtors

£m 2025 2024

Amounts owed by subsidiary undertakings

–

30.6

Amounts owed by subsidiary undertakings are repayable on demand, unsecured, non-interest bearing and settled in cash.

5. Net current liabilities

£m 2025 2024

Amounts owed to subsidiary undertakings

(30.0)

(229.8)

Amounts owed to subsidiary undertakings are repayable on demand, unsecured, non-interest bearing and typically settled in cash. During the period

a restructure of intercompany positions was performed. This included the receipt of an intercompany dividend of £186.7m from Smiths News Holdings

Limited, a subsidiary of the Company.

6. Share capital

(a) Share capital

£m 2025 2024

Issued and fully paid ordinary shares of 5p each

At 31 August 2024 and at 30 August 2025

12.4

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the meetings of

the Company. The Company has one class of ordinary shares, which carry no right to fixed income.

(b) Movement in share capital

Number (m)

Ordinary shares

of 5p each

At 31 August 2024 and at 30 August 2025

247.7

£m

At 31 August 2024 and at 30 August 2025 60.5

7. Directors’ emoluments and employees

The Company engaged five (2024: five) Non-Executive Directors. Smiths News Trading Limited, an indirect subsidiary, pays all remuneration without

recharge for all Directors and the amounts are disclosed within the Directors’ Remuneration Report.

Notes to the Company balance sheet continued

174

Smiths News plc Annual Report and Accounts 2025

Introduction

In the reporting of financial information, the Directors have adopted various alternative performance measures (APMs).

These measures are not defined by International Financial Reporting Standards (IFRS) and therefore may not be directly comparable with other

companies’ APMs, including those in the Group’s industry.

APMs should be considered in addition to, and are not intended to be a substitute for, or superior to, IFRS measurements.

Purpose

The Directors believe that these APMs assist in providing additional useful measures of the Group’s performance. They provide readers with additional

information on the performance of the business across periods which is consistent with how the business performance is planned by, and reported to,

the Board and the Executive Leadership Team.

Consequently, APMs are used by the Directors and management for performance analysis, planning, reporting and incentive-setting purposes.

APM

Closest equivalent

IFRS measure

Adjustments to

reconcile to IFRS

measure

Note/page reference

for reconciliation Definition and purpose

Income statement

Adjusting

items

No direct equivalent N/A Note 3 Adjusting items of income or expense are excluded in arriving

at adjusted operating profit to present a further measure of

the Group’s performance. Each Adjusting item is considered

to be significant in nature and/or quantum, non-recurring in

nature and/or unrelated to the Group’s ordinary activities or

consistent with items treated as adjusting in prior periods.

Excluding these items from profit metrics provides readers

with helpful additional information on the performance of the

business across periods because it is consistent with how

the business performance is planned by, and reported to, the

Board and the Executive Team.

Adjusted

operating

profit

Operating profit* Adjusting items Income statement Adjusted operating profit is defined as operating profit

excluding the impact of adjusting items is the headline

measure of the Group’s performance and a key management

incentive metric.

Adjusted

profit before

tax

Profit before tax (PBT) Adjusting items Income statement/

Note 3

Adjusted profit before tax is defined as profit before tax

excluding the impact of adjusting items.

Adjusted

profit after

tax

Profit after tax (PAT) Adjusting items Income statement/

Note 3

Adjusted profit after tax is defined as profit after tax

from continuing operations, excluding the impact of

adjusting items.

Adjusted

EBITDA

Operating profit* Depreciation and

amortisation

Adjusting items

Page 176 This measure is based on business unit operating profit

from continuing operations. It excludes depreciation,

amortisation and adjusting items.

Bank EBITDA Operating profit* Depreciation and

amortisation

Adjusting items

Operating lease

charges

Page 176 This measure is based on business unit operating profit

from continuing operations. It excludes depreciation,

amortisation, adjusting items and adds back operating lease

charges under accounting standards applicable in 2019 and

share-based payments expense. This measure is used to

calculate compliance with banking covenants.

Adjusted

earnings per

Earnings per share Adjusting items Note 8 Adjusted earnings per share is defined as Adjusted PBT,

less taxation attributable to Adjusted PBT and including any

adjustment for minority interest to result in adjusted PAT

attributable to shareholders; divided by the basic weighted

average number of shares in issue.

Cash flow statement

Free cash

flow

Net movement in cash

and cash equivalents

Dividends, acquisitions

and disposals,

repayment of bank

loans, EBT share

purchases

Page 63 Free cash flow is defined as the movement in cash and cash

equivalents excluding the following: payment of dividends,

the impact of acquisitions and disposals, the repayment of

bank loan principal amounts, outflows for purchases of own

shares (EBT share purchases) and cash held by the EBT.

This measure reflects the cash available to the Group, which

can be used for investments, dividends and the reduction

of debt.

Glossary – Alternative performance measures

Strategic Report Governance Financial Statements

175

Glossary – Alternative performance measures continued

APM

Closest equivalent

IFRS measure

Adjustments to

reconcile to IFRS

measure

Note/page reference

for reconciliation Definition and purpose

Free

cash flow

(excluding

adjusting

items)

Net movement in cash

and cash equivalents

Dividends, acquisitions

and disposals,

repayment of bank

loans, EBT share

purchases, pension

deficit repair payments

adjusting items

Page 63 Free cash flow (excluding adjusting items) is free cash flow

adding back the cash impact of adjusting items.

Balance

sheet

Bank Net

Cash/Debt

Borrowings less cash Cash flow statement Bank net debt is calculated as total debt less cash and

cash equivalents. Total debt includes loans and borrowings

excluding unamortised arrangement fees, overdrafts and

obligations under finance leases under accounting standards

applicable in 2019.

Net debt Borrowings less cash Cash flow statement Net debt is calculated as total debt less cash and cash

equivalents. Total debt includes loans and borrowings,

overdrafts and obligations under leases.

* Operating profit is presented on the Group income statement. It is not defined per IFRS, however, is a generally accepted profit measure.

Reconciliation of free cash flow to net movement in cash and cash equivalents

£m 2025 2024

Net increase/(decrease) in cash and cash equivalents 1.2 (30.3)

Net decrease in borrowings 15.9 23.5

Movement in borrowings and cash 17. 1 (6.8)

Dividend paid 17.4 10.8

Outflow for purchase of own shares by EBT 1.6 3.3

Total free cash flow

36.1

7.3

Reconciliation of bank net cash/debt to reporting net debt

£m 2025 2024

Bank net cash/(debt) 3.3 (11.0)

Unamortised arrangement fees (Note 15) 0.4 0.4

IFRS 16 lease liabilities (Note 17) (30.5) (30.9)

Net debt (Note 15)

(26.8)

(41.5)

Reconciliation of adjusted operating profit to Bank EBITDA

£m Note 2025 2024

Operating profit 41.2 40.0

Adjusting items 3 (2.1) (0.9)

Adjusted operating profit 39.1 39.1

Depreciation 2 2.5 2.2

Amortisation 2 0.5 0.4

Right-of-use asset depreciation 2 6.5 5.9

Adjusted EBITDA 48.6 47.6

Operating lease charges 2 (8.3) (8.3)

Exclude: Share based payments expense 4 1.3 0.9

Bank EBITDA

41.6

40.2

176

Smiths News plc Annual Report and Accounts 2025

Company Secretary and registered office

Stuart Marriner, Smiths News plc, Rowan House, Cherry Orchard North, Kembrey Park, Swindon, Wiltshire SN2 8UH.

Telephone 0845 128 8888.

Smiths News plc is registered in England and Wales (company number 05195191).

Shareholder enquiries may be submitted to cosec@smithsnews.co.uk

General shareholder enquiries – Registrars

Enquiries relating to shareholders, such as the transfer of shares, change of name or address, lost share certificates or dividend cheques, should be

referred to the Company’s Registrars EQ (formerly Equiniti) at Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA (telephone

+44 (0)371 384 2771

. For deaf and speech impaired customers, we welcome calls via Relay UK. Please see www.relayuk.bt.com for more information.

In addition, EQ provides a range of shareholder information online at www.shareview.co.uk (to register for this service you will need your shareholder

reference number which can be found on the Proxy Form).

1 Lines are open from 8.30am to 5.30pm, Monday to Friday, excluding public holidays in England and Wales.

Company website

Smiths News plc’s Annual Reports and results announcements are available online at www.smithsnews.co.uk. The investor zone section of our website

provides a wide range of information about the Company including Annual Reports, regulatory news releases, share price data, financial calendar and

a Shareholder Centre containing Annual General Meeting information and other useful shareholder information.

Annual Report and Group Financial Statements

This Annual Report and the Group Financial Statements are published on our website and have only been sent to those shareholders who have asked

for a copy. Shareholders who have not requested a paper copy of the Annual Report and Financial Statements have been notified of the availability on

our website.

Annual General Meeting

The 2026 Annual General Meeting will be held at Rowan House, Cherry Orchard North, Kembrey park, Swindon, Wiltshire SN2 8UH on Thursday

29 January 2026 at 11.30am.

The Notice of Annual General Meeting sets out the business to be transacted. Shareholders who wish to attend the meeting should detach the

Attendance Card from the Proxy Form that they are sent and present it at the registration desk on arrival at the Annual General Meeting.

The voting results of the 2026 Annual General Meeting will be accessible at www. smithsnews.co.uk shortly after the meeting.

A paper copy of the Annual Report and Financial Statements can be obtained by writing to the Company Secretary at the address listed above or you

can email your request to investor.relations@smithsnews.co.uk.

Proxy Form

Shareholders unable to attend the Annual General Meeting should complete a Proxy Form. To be effective, it must be completed and lodged with the

Company’s Registrars, EQ, by not later than 11.30am on Tuesday 27 January 2026.

Electronic proxy voting

You may, if you wish, register the appointment of a proxy for the Annual General Meeting electronically, by logging onto the website www.sharevote.

co.uk. Full details of the procedure are given on the website. You will need to have your Proxy Form to hand when you log on as it contains information

which will be required. CREST members may appoint a proxy electronically via the Company’s Registrars, EQ (ID RA19). If you are an institutional

investor you may alternatively be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed by the Company

and approved by the Registrars. For further information regarding Proxymity, please go to www.proxymity.io. Electronic proxy voting instructions must

be received by not later than 11.30am on Tuesday 27 January 2026.

Financial calendar (provisional dates)

Financial year end 30 August 2025

Results announced 4 November 2025

Annual Report published 16 December 2025

FY2024 Final Dividend Record Date 9 January 2026

Annual General Meeting 29 January 2026

FY2025 Final Dividend Payment Date 5 February 2026

Half-year end 28 February 2026

Interim results announced 6 May 2026

Financial year end 29 August 2026

Results announced 4 November 2026

For the dates of events in the second half of the financial calendar, please check the Smiths News plc website at www.smithsnews.co.uk nearer

the relevant time for further details, and to ensure that no changes have been made.

Share dealing service

The Company has arranged for Shareview Dealing, a telephone and internet share dealing service offered by EQ, to be made available to UK

shareholders wishing to buy or sell the Company’s shares. For telephone dealing, you may call 03456 037 037 between 8.30am and 4.30pm,

Monday to Friday, and for internet dealing log on to www.shareview.co.uk/dealing. You will need your shareholder reference number shown

on your share certificate.

Shareholder information

Strategic Report Governance Financial Statements

177

Shareholder information continued

ShareGIFT

If you only have a small number of shares which are uneconomic to sell, you may wish to consider donating them to charity under ShareGIFT, a charity

share donation scheme administered by the Orr Mackintosh Foundation. A ShareGIFT transfer form may be obtained from EQ. Further information

about the scheme can be found on the ShareGIFT website at www.sharegift.org.

Warning to shareholders (‘boiler room’ scams)

In recent years, like many other companies, we have become aware of a small number of investors who have received unsolicited calls or

correspondence, in some cases purporting to have been issued by us, concerning investment matters. These typically make claims of highly

profitable opportunities in UK or US investments which, in fact, turn out to be worthless or simply do not exist. These approaches are usually made by

unauthorised companies and individuals and are commonly known as ‘boiler room’ scams. Investors are advised to be wary of any unsolicited advice or

offers to buy shares. If it sounds too good to be true, it often is.

Please see the Financial Conduct Authority website (Protect yourself from scams | FCA) for more detailed information about this or similar activity.

Details of any share dealing facilities that the Company endorses will be included in Company mailings.

UK Capital Gains Tax (CGT)

Rights Issue 17 December 2014

Shareholders who acquired shares

For the purposes of calculating any chargeable gains or losses, any ordinary shares you acquired as a result of the Rights Issue (at a price of 102p each)

are treated as being acquired at the same time as your original holding of ordinary shares and the subscription cost added to the base cost of your

original holding.

Shareholders who sold or renounced their rights or who allowed their rights to lapse

If you sold any or all of your rights to subscribe for the ordinary shares provisionally allotted to you, or if you allowed your rights to lapse and received a

cash payment in respect of them, if the proceeds were ‘small’ as compared with the market value (on the date of sale or lapse) of your existing holding

of ordinary shares in respect of which the rights arose, you will not generally be treated as making a disposal for CGT purposes. Instead, the proceeds

received should be deducted from the base cost of your existing holding of ordinary shares. HMRC current practice is to regard a sum as ‘small’ for

these purposes where either: (i) the proceeds do not exceed 5% of the market value (at the date of sale or lapse) of the ordinary shares in respect of

which the rights arose; or (ii) the sum received is £3,000 or less, regardless of whether the 5% test is satisfied.

If the proceeds you received were not ‘small’ the sale is treated as a disposal and, in order to calculate any chargeable gains or losses, you need to

apportion the original base cost of your existing holding of ordinary shares between the sale proceeds and your existing holding of ordinary shares in

the ratio of the sale proceeds divided by the sale proceeds plus the market value of your existing holding of ordinary shares (on the date of sale or lapse).

Further guidance can be found on the HMRC website www.gov.uk/capital-gains-tax-share-reorganisation-takeover-or-merger.

Demerger 31 August 2006

Following the demerger of new WH Smith PLC on 31 August 2006, in order to calculate any chargeable gains or losses arising on the disposal of shares

after 31 August 2006, the original tax base cost of your old WH Smith PLC ordinary shares of 2

p (adjusted if you held your shares at 24 September

2004 and 22 May 1998 to take into account the capital reorganisations of 27 September 2004 and 26 May 1998 respectively (see below)) will have to be

apportioned between the shareholdings of ordinary shares of 5p in the Company and ordinary shares of 22

p (or 20p if the disposal took place before

22 February 2008) in new WH Smith PLC in the ratio of 0.30415 and 0.69585 respectively.

Capital reorganisation 27 September 2004

If your shares result from a holding of old WH Smith PLC shares acquired on or before 24 September 2004, in order to calculate any chargeable

gains or losses arising on the disposal of shares after 24 September 2004, the original tax base cost of your old WH Smith PLC ordinary shares of

p (adjusted if you held your shares as at 22 May 1998 to take into account the capital reorganisation of 26 May 1998 (see below)) will have to be

apportioned between the shareholdings of ordinary shares of 2

p and ‘C’ shares resulting from the capital reorganisation.

The cost of your shareholding of ordinary shares of 2

p is calculated by multiplying the original base cost of your ordinary shares of 55

p (adjusted

where necessary to take into account the capital reorganisation of 26 May 1998 referred to above) by 0.73979.

Capital reorganisation 26 May 1998

If your shares result from a holding of old WH Smith PLC shares acquired on or before 22 May 1998, in order to calculate any chargeable gains or

losses arising on the disposal of shares after 22 May 1998, the original tax base cost of your old WH Smith PLC ordinary shares of 50p will have to be

apportioned between the shareholdings of ordinary shares of 55

p and redeemable ‘B’ shares resulting from the capital reorganisation.

The cost of your shareholding of ordinary shares of 55

p is calculated by multiplying the original cost of your ordinary shares of 50p by 0.90714.

178

Smiths News plc Annual Report and Accounts 2025

March 1982 values

If your shares result from a holding of old WH Smith PLC shares acquired on or before 31 March 1982, the tax base cost to be used in order to calculate

any chargeable gains or losses arising on the disposal of shares is the 31 March 1982 base values per share as follows:

Arising from an original

shareholding of old

WH Smith PLC

‘A’ ordinary

‘B’ ordinary

Ordinary shares of 5p 26.93p 22.25p

WH Smith PLC ordinary shares of 22

p 61.62p 50.92p

If you have a complicated tax position, or are otherwise in doubt about your tax circumstances, or if you are subject to tax in a jurisdiction other than the

United Kingdom, you should consult your professional adviser.

Cautionary statement

This Annual Report contains certain forward-looking statements with respect to Smiths News plc’s financial condition, its results of operations and

businesses, strategy, plans, objectives and performance. Words such as ‘anticipates’, ‘expects’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’, ‘targets’,

‘may’, ‘will’, ‘continue’, ‘project’ and similar expressions, as well as statements in the future tense and statements other than statements of historical

fact, identify forward-looking statements. These forward-looking statements are not guarantees of Smiths News plc’s future performance and relate to

events and depend on circumstances that may occur in the future and are therefore subject to risks, uncertainties and assumptions. There are a number

of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements,

including, among others, the enactment of legislation or regulation that may impose costs or restrict activities; the re-negotiation of contracts or

licences; fluctuations in demand and pricing in the industry; fluctuations in exchange controls; changes in government policy and taxations; industrial

disputes; and war and terrorism. These forward-looking statements speak only as at the date of this document and are qualified in their entirety by

the inherent risks and uncertainties surrounding future expectations. Unless otherwise required by applicable law, regulation or accounting standard,

Smiths News plc undertakes no responsibility to publicly update any of its forward-looking statements whether as a result of new information, future

developments or otherwise.

The information contained within this Annual Report may be deemed to constitute inside information as stipulated under the Market Abuse Regulations

(EU) No. 596/2014 (as it forms part of the law of England and Wales by virtue of section 3 of the European Union (Withdrawal) Act 2018). Upon the

publication of this Annual Report, this inside information is now considered to be in the public domain.

Strategic Report Governance Financial Statements

179

180

Smiths News plc Annual Report and Accounts 2025

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Rowan House

Kembrey Park

Swindon

Wiltshire

SN2 8UH

United Kingdom

0345 128 8888