Newstrade wholesaler Connect Group has reported an increase in half-year sales and profits despite a continued decline in newspaper and magazine sales.
Connect Group said total sales rose 1.2% to £909.9m in the six months to 28 February. Underlying profits rose 3.3% to £27.7m, while pre-tax profit rose 0.2% to £24m.
In its news distribution business Smiths News, total newspaper and magazine revenues fell 2% to £733.9m, which it said was ahead of its medium term strategic forecast of -3 to -5%. On a like-for-like basis total newspaper and magazine revenues fell 3.3%.
It also said the division remained on track to deliver at least £5m in cost savings in the current year, exceeding its goal to reach £20m in savings over the past three years. It expects to deliver a further £10m of annual cost savings over the next two years.
Connect Group also revealed its new Pass my Parcel service with Amazon launched in October last year was already up and running in more than 700 stores and would increase to about 3,000 stores within the next six to nine months. This is ahead of its previous target of 2,000 stores. It also said it was in the middle of a trial with Amazon to deliver parcels to shoppers homes in Newcastle, Brighton and Southampton.
Connect Group acquired parcel delivery service Tuffnells in December last year. The group said since acquisition it had seen strong sales and profits growth of 16.9% and 11.6% respectively.
“The group has made an encouraging start to the year, making strategic progress across all divisions and successfully completing the major acquisition of Tuffnells,” said CEO Mark Cashmore.
“Tuffnells represents a significant step in our growth strategy and we are delighted with its initial performance. We have also been investing across the rest of the group to position us for sustainable growth and are pleased with the progress we are making,” he added.
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