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Connect Group operates a diverse portfolio of businesses leading distribution specialists in carefully chosen markets. With a combined revenue of £1.8bn, we employ 4,500 staff and operate in the UK and worldwide.

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Connect Group Fundamentals

5yr contract extension with Guardian News & Media

Connect Group PLC ("the Group") a leading specialist distributor operating in three divisions; News & Media, Books and Education & Care, is today delighted to announce Smiths News, the UK's leading newspaper and magazine wholesaler, has reached an agreement with Guardian News and Media to extend their newspaper wholesaling agreement until February 2021.

The new agreement secures the existing 60% market share of Guardian News and Media's distribution business for an additional five years.

The contract is valued at £63m pa (at FY14 values) equating to 7% of the national newspaper distribution market. Guardian News and Media publishes both The Guardian and The Observer which sell 180,000 and 200,000 papers per day respectively.

Following this extension, Smiths News has now secured c.£1.2bn of revenues per annum (at FY14 values) through to 2019 equating to 84% of total sales.

Preliminary Results Announcement for the year ended 31 August 2014

2014 HIGHLIGHTS:

· Solid financial performance
o Group Underlying Revenue and Underlying PBT marginally ahead of last year
o Free cash flow of £37.2m, up 14.1%
o Net Debt reduced to £93.0m, 1.4x net debt / adjusted EBITDA

· Increased shareholder returns
o Underlying EPS 21.7p, up 2.8%
o Final dividend of 6.6p, making a full year dividend of 9.7p, up 4.3%

· Stronger than forecast Newspaper and Magazine sales
o Impressive World Cup sales
o Positive impact of Supermarket promotions

· Books division performance now stabilised with management actions continuing to take effect

· Education & Care division growing core categories and delivered good peak trading

· Launch of two new organic opportunities supporting ongoing diversification
o Pass My Parcel, a click and collect delivery service with Amazon, live in over 500 independent retailers
o Jack's Beans, a premium vended coffee service, live in 120 independent retailers

LAUNCH OF PASS MY PARCEL DELIVERY SERVICE WITH AMAZON

New click and collect delivery service with Amazon

Connect Group PLC ("the Group") a leading specialist distributor operating in three divisions; News & Media, Books and Education & Care, is today delighted to announce the launch of Pass My Parcel, a new and wholly owned 'click and collect' delivery service. Pass My Parcel is a solution developed by the News and Media division ("the Division") which over time has the potential to be part of the long term diversification strategy for the Division. Pass My Parcel has secured Amazon, the UKs leading on-line retailer to launch the service.

Pass My Parcel is a highly innovative new parcel collection service utilising the current Smiths News' specialist time sensitive distribution capability, physical network, and its daily relationship with thousands of local retailers across the UK, enabling the development and rollout to be achieved in a more cost effective way than other companies. Pass My Parcel will offer a unique twice daily distribution to participating independent retail outlets, 7 days a week, 364 days a year.

When selecting Pass My Parcel as a delivery option, customers ordering on-line by 7.45pm will be able to collect their parcel from 6.30am the next morning, or, if ordered by 11.45am will be able to collect from 4pm the same day. This service of two time sensitive deliveries per day, (once on a Sunday), offers customers a convenient and secure way to pick up their parcels, with a level of service and flexibility unlike any other offer in the market today.

Customers selecting Pass My Parcel delivery to their local independent retailer will be electronically sent a specially generated pin code in order to securely collect their parcel. This new service will allow customers more control over when and where they choose to pick up their items.

Pass My Parcel will utilise Smiths News' information systems, invoicing and communication facilities and provide access to over 500 independent retail outlets being serviced by 12 Smiths News' depots.

Ex-divi 8th Jan 2015 (6.6p)

Liberum Capital repeated its 'buy' call on the stock, with a 200 pence per share target price.

PROPOSED ACQUISITION OF TUFFNELLS PARCELS EXPRESS AND UNDERWRITTEN CIRCA £55 MILLION RIGHTS ISSUE

· Connect Group to acquire Tuffnells Parcels Express ("Tuffnells") a leading provider of next day Business to Business ("B2B") of mixed freight / parcel consignments, specialising in items of irregular dimension and weight;
· Leverages Connect Group's core capabilities in time sensitive and efficient delivery in specialist markets;
· A strong standalone business with proven track record underpinned by a large, fragmented and growing market;
· Provides the Group with a national distribution network with potential opportunities to enhance the Group's existing operations in the medium term, such as Pass my Parcel;
· The Acquisition is a significant strategic opportunity and a key step in the Group's medium term diversification ambitions;
· Initial consideration of £113.4m on a multiple of 6.3x LTM Adjusted EBITDA1, funded through recently extended debt facilities and circa £55m Rights Issue. Additional £15.3m deferred consideration subject to performance and retention conditions over a three year period;
· Run rate cost synergies of £2.0m per annum expected by year three and opportunity for additional revenue synergies through shared network and distribution capabilities;
· Strong financial effects of the transaction, being earnings enhancing in Year 1 and substantially enhancing in Year 3, with return on invested capital ahead of the Group's cost of capital in first full year2; and
· Strong cash generation supports continuation of the Group's progressive dividend policy

StockMarketWire.com
Connect Group has announced that shares not taken-up under its two-for-seven rights issue now been placed.

It said that J.P. Morgan Securities and Liberum Capital in their capacity as joint bookrunners, have procured subscribers for 4,197,167 new ordinary shares for which valid acceptances were not received at a price of 157p apiece.

Earlier, Connect Group said it received valid acceptances in respect of 49,940,069 new ordinary shares - approximately 92.2% of the total offered.

And the offer price dropped immediately to 150.5 at which point I was able to buy a few. Rude not to. Couldn't buy as many as I would have liked as I had already had a little spend up in the morning.

StockMarketWire.com
Connect Group has completed the acquisition of The Big Green Parcel Holding Company Limited, whose principal subsidiary trades as Tuffnells Parcels Express, as previously announced on 12 November, for an initial consideration of £113.4 million. The group has partly financed the acquisition through the proceeds of a two-for-seven rights issue at 102.0p per share, being approximately £52.3m, net of expenses, as announced on 17 December.

TRADING UPDATE


Connect Group PLC, a leading specialist distributor operating in four divisions; News & Media, Books, Education & Care and Parcel Freight, is today issuing its Trading Update covering the19 week period to 10 January 2015.


Total Group revenues decreased 1.5% year on year, with overall performance broadly in line with management expectations.

The performance of each division was as follows;

· Connect News & Media;News revenues decreased by 1.8% and like for like revenues decreased by 2.8% with both newspaper and magazine performance continuing in line with recent run rates. Pass my Parcel was launched as planned and continues to be rolled out to new stores. Media revenues increased through new contract wins by 5.2% with like for like revenues up by 0.4%.

· Connect Books; revenues decreased by 1.2% through increased focus on more profitable contracts as part of the recovery plan. Like for like revenues increased by 1.8% due to the continued strong performance of Wordery partly offset by the ongoing market pressures in the UK and internationally. Recent recovery actions continue to reduce costs and increase margins.

· Connect Education & Care;revenues decreased by 2.0% and like for like revenues decreased by 1.2%. Core revenues were up by only 0.6% as a result of a strong early peak trading period in the prior year. Education and Early Years channels continue to outperform the smaller Care channel and non-core revenues were down broadly in line with recent run rates.

· Connect Parcel Freight;on 19 December 2014, the Group completed the acquisition of Tuffnells Parcels Express, establishing the Parcel Freight division. The division has made a positive start with encouraging trading over the festive period and performance to date is in line with management expectations.


There has been no change in the underlying financial condition of the Group since 12 November 2014 following the publication of the Prospectus in relation to the acquisition of Tuffnells.

The Group will announce its interim results for the six months ending 28 February 2015 on 22 April 2015.

Appointment of New Chairman

Connect Group, a leading specialist distributor operating in four divisions; News & Media, Books, Education & Care and Parcel Freight, will be announcing its Interim results for the six months ended 28 February 2015 on Wednesday 22 April 2015.

A meeting for analysts will be held at 9.00am at the offices of Buchanan, 107 Cheapside, London EC2V 6DN on Wednesday 22 April 2015, with an audio webcast of the results presentation available thereafter.

Hopefully the interims will spark a bit of positive action in the share price. It has gone nowhere fast for the last eight months.

Ominous drop before tomorrow's interims!

Interim Results for the 6 months ended 28 Feb 15

Highlights:

· Underlying revenue up 1.2% and underlying operating profit up 3.3%
· Results include the successful acquisition of Tuffnells from 19 December 2014
· Strong free cash flow generating £16.0m, up 34.2%
· Underlying rebased EPS of 8.6p, down 5.5% as a result of the phasing of post-acquisition profits from the Tuffnells acquisition and rights issue shares
· Rebased DPS of 2.9p up 3.6%, reflecting confidence in the Tuffnells acquisition and ongoing Group prospects

· News & Media:
o Continued resilience of newspaper and magazine markets
o Developing the Pass my Parcel offer with Amazon and accelerating investment
· Books:
o Stabilised performance and assessing longer term opportunities
o Wordery continuing impressive growth
· Education & Care:
o Growth in core categories with strength in Primary and Early Years
o Investments being made to enhance customer proposition
· Parcel Freight:
o Continued strong sales and profit growth in post-acquisition period
o Integration and synergies on target

This has been looking very soggy of late. No reason that I can fathom. Nothing adverse has been announced. Another 'buying opportunity' by any chance? Certainly in the bargain basement category at these levels.

It is frustrating - I've also taken out a S/B on Tuesday @139.54.

Hopefully the Interims on 7th July will give some upside.

Trading Update

Total Group revenues for the 44 week period increased 3.1% on the same period last year, with overall performance marginally ahead of management expectations.

The performance of each division has been as follows:

· Connect News & Media:
o News revenues decreased by 3.4% compared with the same period last year with the benefit of new regional business offset by the absence of last year's World Cup sticker sales.
o Like for like revenues decreased by 3.5% for the 44 week period, comfortably within our medium term forecasts with newspaper cover price inflation strengthening and magazine performance continuing to improve.
o Pass my Parcel recruitment continues as planned with over 2,400 parcel shops recruited to date, up from c.700 at the time of interim results in April and keeping us on track to achieve our ambition of c.3,000 by the financial year end. We are continuing dialogue with potential new clients and the launch of further services.
o Media revenues increased by 1.9% as a result of new contract wins with like for like revenues decreasing 2.3%.

· Connect Books:
o Revenues decreased by 1.1% as we continue to focus on profitable sales. Like for like revenues increased by 2.3% for the 44 week period, showing improving momentum since the interim results.
o Performance has been driven by the ongoing recovery in Trade sales as management actions from the stabilisation plan take effect, alongside Wordery's continued impressive growth.

· Connect Education & Care:
o Revenues increased by 1.9% with like for like revenues increasing by 1.8% for the 44 week period, showing a stronger run rate since the interim results.
o Core revenues were up by 2.9% and growth continues to be driven by strength in Primary Education and Early Years.
o Momentum is building for the key peak trading period which has started in line with expectations supported by recent and ongoing investments in our new Warehouse Management System.

· Connect Parcel Freight:
o The division has continued its strong start within the Group and is ahead of management expectations, with total revenues increasing by 20.6% driven by market growth and new customers.
o Planned operational synergies identified at the time of the acquisition remain on track.
o As announced on 28 May 2015, Chris Ward was appointed Managing Director of the division, with effect from 29 June 2015.

There has been no change in the underlying financial condition of the Group since the interim results announcement on 22 April 2015.

The Group will announce its preliminary results for the twelve months ending 31 August 2015 on 14 October 2015.

Interesting buys

09:52:14 145.00 276,000 O 141.50 145.75 Buy 593,347 24,946
09:52:07 145.00 276,429 O 141.25 145.75 Buy 317,347 24,946
09:46:22 145.75 455 AT 142.25 145.75 Buy 40,918 24,946
08:40:41 144.50 1,174 AT 142.25 144.50 Buy 40,463 24,946
08:40:41 144.50 600 AT 142.25 144.50 Buy 39,289 24,946
08:40:41 144.50 726 AT 142.25 144.50 Buy 38,689 24,946
08:34:52 144.50 1,994 AT 142.25 144.75 Buy 37,963 24,946
08:34:46 144.50 1,994 AT 142.25 144.75 Buy 35,969 24,946
08:34:22 144.50 1,994 AT 141.25 144.75 Buy 33,975 24,946
08:34:15 144.75 1,494 AT 141.25 145.25 Buy 31,981 24,946
08:34:15 144.75 1 AT 141.25 144.75 Buy 30,487 24,946
08:34:15 144.75 947 AT 141.25 144.75 Buy 30,486 24,946
08:27:02 145.10 5,000 O 143.25 145.75 Buy 29,539 24,946
08:26:57 145.00 1,362 O 143.25 145.75 Buy 24,539 24,946



Compared with "normal volumes".

An upgrade to buy from N+1 Singer - TP unchanged @150p.