Connect : January 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 the 19 week period to 9 January 2016.

It is also pleased to announce ASOS, a leading online fashion retailer, as the second customer for Pass My Parcel, the Group's Click & Collect service.

Overall performance continues in line with management expectations with total Group revenues increasing 6.4% compared to the same period last year, including the benefit of a full period's strong contribution from the Parcel Freight division following the acquisition of Tuffnells in December 2014. Total Group like for like revenues decreased 2.3%.

The Group continues to make good progress with its growth initiatives. Pass My Parcel delivered an excellent operational performance over the peak Christmas period remaining on track with its current expansion plans. The launch of a mobile enabled returns collection service, with a QR (Quick Response) code sent to customers' mobile phones, is the next step in the Group's strategy to grow Pass My Parcel, having originally launched the Click & Collect service in October 2014 with Amazon as its first client. The Group today names ASOS as its second customer with an initial trial in 20 retail outlets to be rolled out across the remaining 3,000 outlets over the coming months.

The performance of each division was as follows:

• Connect News & Media: News total revenues decreased by 2.7% and like for like revenues decreased by 3.7%, with newspaper performance in line with recent run rates and magazine run rates continuing to improve. Media total revenues increased by 2.5% while like for like revenues increased by 1.8%.
• Connect Books: total revenues declined by 0.8%, while like for like revenues increased by 1.2%, through a sustained focus on more profitable contracts as part of the efforts to reduce costs and increase margins. Ongoing significant growth in Wordery and a good performance in Wholesale were offset by continuing tough conditions in UK Libraries and International markets.
• Connect Education & Care: total and like for like revenues both increased by 0.1%. Core revenues increased by 1.7% underpinned by strong growth in Early Years partly offset by performance in Secondary Education, with the division remaining focused on maintaining a strong gross margin.
• Connect Parcel Freight: total and like for like revenues both increased by 12.1% with continued positive market growth and new customer wins. The division's performance remains in line with management expectations, with strong growth under the Group's ownership.

There has been no change in the underlying financial condition of the Group since the preliminary financial results announcement on 14 October 2015.

The Group will announce its interim results for the six months ending 29 February 2016 on 19 April 2016.

Enquiries:

Connect Group PLC
Mark Cashmore, Group Chief Executive Tel: [phone]
Nick Gresham, Chief Financial Officer

Buchanan
Richard Oldworth / Sophie McNulty / Gabriella Clinkard Tel: [phone]

Download PDF