Profits up at WH Smith despite fall in sales
Book and stationery retailer WH Smith saw pre-tax profits rise by 3% to Â£66 million in its first half despite a drop in sales.
In the six months to 29 February 2012, the group’s Travel division grew its operating profit by 8% to £27 million while its High Street business delivered an operating profit of £47 million, the same figure as in the previous year.
Group total group sales were £665 million, down from £686 million in 2011 with like-for-like sales falling by 5%. High Street sales were down 5% in total and down 6% on a like-for-like basis, in line with the strategic plan.
Travel sales grew by 2% driven by new business while like-for-like sales dropped 3%, reflecting continuing soft passenger numbers.
Chief executive Kate Swann said: "We have delivered a good performance with profits increasing in the first half of the year. In Travel we have grown operating profit by 8% and have made further good progress in our international channel with 80 units either open or agreed. Our High Street business continues to deliver strong cash generation, with gross margin improvement and costs tightly controlled."
The group opened three new high street stores in the period, with the total number of stores now standing at 611. The Travel division opened 18 new units in airports and railway staions and there are a further 17 new openings in the pipeline.
Looking ahead Swann said trading conditions would remain "challenging", adding: "We are a resilient business with a consistent record of both profit growth and cash generation and we have opportunities for growth in the UK and internationally."
WH Smith has also announced that Stephen Clarke, currently managing director of the group's High Street Division, will join the Board as an executive director from 1 June.
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