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WH Smith meets expectations
Archived article dated Thursday April 23rd 2009
High street sales at WH Smith have fallen by six per cent as the company introduces strategic changes to reduce its reliance on entertainment categories, the group has announced in its interim results for the six months to 28 February.
Like-for-like sales at the chain's store also fell by six per cent, but by 2 per cent when entertainment categories are excluded. The high street division made a profit of £47m, while the travel division of the group saw profits up 18 per cent to £20m.
Total group sales were flat, with like-for-like sales down 5 per cent, giving group profit before tax of £61m, £3m below last year's figure.
“We have delivered a solid performance with Group profits of £61m, reflecting the attractiveness of the Travel business model and the resilience of our High Street division,” says WH Smith group chief executive Kate Swann. “Our decision to increase the dividend by 17% reflects the strength of our on-going cash generation as well as the Board's confidence in the future prospects of the business. Our markets remain challenging, however we have planned accordingly and are confident in the outcome for the full year.”
The group is continuing with its strategy to rebalance its mix of business core categories, reducing its presence in entertainment, which is disproportionately weighted towards the first half.
Travel stores benefitted from a better use of space, improved category management and buying improvements, resulting in more sales in higher margin categories such as confectionery and books. The Travel business now operates from 464 units, including motorway service area franchise units and coffee shops.
The High Street business now operates from 562 stores.
Tagged as: WH Smith | interims | entertainment | category management
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