WH Smith profits up 9% despite sales fall
Book and stationery retailer WH Smith has reported a 9% increase in full year pre-tax profit.
The group, which has over 1,300 stores, said profits in the year to 31 August rose to £112 million from £103 million in the previous year.
However, group total sales fell by 2% with like-for-like sales dropping by 3%.
WH Smith’s travel division, which includes stores at airports and railways stations, increased its trading profit by 11% to £73 million with further improvement in gross margin. Total sales were up 4% compared to the previous year and were flat on a like-for-like basis, reflecting an improvement in passenger trends.
The division opened 30 new units in the UK in the year, taking the total to 596 units. It also won a further 30 units in its international channel, making a total of 165 units of which 138 are open.
Meanwhile, the group’s high street stores saw trading profit rise by 4% to £58 million. Although total sales fell by 6% and like-for-like sales were down 5%, the group said the division achieved a strong gross margin performance. It also delivered costs savings of £14 million in the year, which was in line with plan. The division has identified an additional £11 million of new cost savings, taking the target to £21 million over the next three years.
The high street business now operates from 604 stores after 11 stores were closed in the year.
WH Smith group chief executive Stephen Clarke said: “The group has delivered a strong performance with EPS up 18% year on year. The distinct strategies for each of our businesses continue to deliver good profit growth.
“We had another record year in Travel, with profits up 11% to £73 million, driven by an increase in total sales of 4% and continued improvement in like-for-like sales, which were up 1% in the second half.
“In our high street business profits increased by 4% to £58 million, demonstrating the continued success of our profit focused strategy.
“The group is highly cash generative and as a result we have announced today a further share buyback of up to £50 million and a 14% increase in the full year dividend.
“Looking ahead, our focus will remain on profitable growth, cash generation and investing in new opportunities that position us well for the future.”
