A lucrative contract with News International, costsaving measures and a focus on diversification will help Smiths News cope with the impact of difficult times in the publishing sector, the newspaper and magazine wholesaler said yesterday.

The company, formed by a demerger from WH Smith two years ago, reported a 10 per cent fall in pre-tax profits to £32.6m in the year to August. Earnings per share fell 8 per cent to 14.8p. However, strong cash flows allowed the company to lift the total dividend 5 per cent to 6.7p, after declaring a final pay-out of 4.5p (4.3p).