Smiths News has reported a 4 per cent increase in its turnover for the year to 31 August 2012 – from £1.7bn in 2011 to £1.8bn.
Pre-tax profit has increased from £32.1m in 2011 to £36.6m.
Smiths News this is a “robust performance” in challenging market conditions.
The business said its Smiths News arm remains the largest part of the group and said there are “substantial opportunities that continue to exist” within this area of the business.
Like-for-like sales in both magazines and newspapers were down and it added that there had been “significant price reductions and discounting” in the Sunday papers market which has affected overall sales value in the short term.
It is set to undertake an additional £15m of cost savings by 2015 after achieving £25m of cost savings already in this division.
The group added its diversification strategy is “well underway”. It plans to generate 50 per cent of its group profits from outside newspaper and magazine wholesaling by 2016.
It has entered the book, education and care markets through the acquisitions of Bertrams, Dawson Holdings and The Consortium.
The company said Bertrams had a “transformational year” with pre-tax profit up 84 per cent and Smiths News said the acquisition of Dawson Holdings in August 2011 is “central” to this.
The acquisition of The Consortium in April 2012 “represents an important step in a broader diversification strategy” and added that this acquisition has been “immediately earnings enhancing”.
The business added that it “remains alert” to opportunities in the education and care markets for “selective bolt-on acquisitions”.
Group chief executive Mark Cashmore said: “I am delighted to report another 12 months of strong financial performance with underlying profits, cash flow and earnings all up by over 20 per cent per annum coupled with significant strategic progress.
“We have shown tremendous resilience in our core newspaper and magazine distribution business and made substantial progress in our books division, Bertrams.
“Our more recent acquisition of The Consortium represents another step forward in our diversification strategy as we look to broaden our market reach in new areas of specialist distribution. Looking ahead, we have a clear strategy for growth with opportunities in all our divisions.”