April 13 (Bloomberg) -- Smiths News Plc, Britain’s biggest newspaper and magazine distributor, rose 2.6 percent in London trading after posting higher first-half profit and increasing its cost-savings target by 50 percent.
Net income in the six months ended Feb. 28 climbed 11 percent to 13.7 million pounds ($22.3 million), the Swindon, England-based company said in a Regulatory News Service statement today. It raised its interim dividend 8.3 percent to 2.6 pence a share.
Smiths raised its three-year efficiency savings target to 30 million pounds from 20 million pounds. The company, which was spun off from WH Smith Plc in 2006, is taking costs out following its purchase of Bertrams, a book wholesaler. It’s looking for further acquisitions and has as much as 70 million pounds available to spend.
“They operate in markets in long-term decline so the increased savings are a big positive surprise,” James Tetley, an analyst at Brewing Dolphin Holdings Plc who rates the shares “add,” said in a telephone interview. “The dividend is now yielding over 9 percent, which is pretty hefty.”
The shares climbed as much as 6.4 percent to 92 pence before closing at 88.75 pence at 4:30 p.m. in London. The rise pared this year’s decline to 25 percent.
“The board confirms the group is firmly on track to deliver profits in line with full-year expectations,’ the company said in today’s statement.
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