WH Smith boosted by better than expected sales in January and February
WH Smith has said its high street business performed better than expected in January and February despite reduced footfall due to lockdown.
In a finance and trading update, the book and stationery retailer revealed that revenue at the business came in at 74% and 84% of 2019 levels in January and February respectively, which was ahead of expectations.
The business also saw significant growth in online sales while the company’s Funky Pigeon online greeting cards business was boosted by record sales in the run-up to this year’s Valentine’s Day.
However, WH Smith’s travel business fared less well with total revenue in January and February reaching a respective 35% and 33% of 2019 levels.
Due to the better than expected performance in the high street business, the retailer is now expecting its monthly cash burn from January to March 2021 to be around £12 million to £17 million compared to the previously guided £15 million to £20 million per month.
WH Smith has also confirmed that it has extended its bank financing arrangements with its existing banks. This has included extending the maturity of its two existing £200 million term loans to October 2023 and agreeing a new minimum liquidity covenant for both the August 2021 and February 2022 covenant tests. The previously agreed covenant waiver for February 2021 remains unchanged.
The changes have enabled the retailer to cancel its existing £120 million liquidity loan which was undrawn and due to expire in November 2021. Its £200 million revolving credit facility remains unchanged with the current arrangement due for renewal in December 2023.
