THE RETAIL BULLETIN - The home of retail news
Lest we forget
HOME
RETAIL NEWS
RETAIL EVENTS
Fashion
Department Stores
Shopping Centres & Retail Parks
Home & DIY
Electricals
Health & Beauty
General Merchandise
Entertainment
Sports & Leisure
Retail Solutions
Food & Drink
Interviews
RETAIL INSIGHTS
RETAIL SOLUTIONS
ABOUT US
CONTACT US
SUBSCRIBE FOR FREE
WH Smith profits rise by 3% as cost cutting pays off

WH Smith saw its headline group pre-tax profit rise by 3% to £70 million in the first half of its financial year as the book and stationery retailer continued to make cost savings in line with strategy.

GENERAL MERCHANDISE

WH Smith profits rise by 3% as cost cutting pays off

WH Smith saw its headline group pre-tax profit rise by 3% to £70 million in the first half of its financial year as the book and stationery retailer continued to make cost savings in line with strategy.

The group said its travel division increased its trading profit by 3% to £30 million with further improvement in gross margin and good cash generation. Total travel sales rose by 2%, with like-for-like sales dropping by 1%, to reflect an improvement in UK air passenger trends and a continued focus on space management. WH Smith plans to open 30 new travel units in the UK this year and 38 outlets overseas.

The retailer’s high street store division grew its profit by 2% to £49 million although sales were down 7% on a total basis and by 6% on a like-for-like basis as a result of some challenging markets and weaker publishing in the period. However, savings of £9 million were delivered in the half, with a further £5 million identified in the second half. As at 28 February 2014, the retailer operated 607 high street stores.

Across the group, total sales declined by 4% with like-for-like sales also falling by 4%.

Commenting on the results, WH Smith group chief executive Stephen Clarke said: "The group has delivered another strong performance, with profit growth in Travel and High Street, demonstrating the continuing success of our strategy.

"The group remains highly cash generative. During the first half we returned £47 million to shareholders through the dividend and share buyback announced in October 2013 and today we have increased the interim dividend by 15%.

Liz Faulkner, retail consultant at Conlumino, comments: "Once again, WH Smith has reported rising profits (up 3% versus last year), despite persistently declining sales. This has been achieved off the back of stringent cost management – its High Street division delivered £9m worth of savings in this first half with a further £5 million earmarked for H2 - and tight margin control.

"While WH Smith might not be the most glamorous player, you have to admire its determination. Primarily an entertainment retailer, faced with a shrinking sector, WH Smith did what many, such as HMV, failed to do and bit the bullet; it began to diversify, bringing in new product categories and tapping into the travel space. Its commitment to testing new product categories and its focus on cost and margin control is laudable.

"In the longer run, however, once this has run its course – there will be a point where no more fat can be cut - WH Smith will need to take its product mix and space optimisation learnings and, while retaining its cost and margin control, present us with a focused brand proposition. The problem is that WH Smith does not yet stand for anything, apart from perhaps a retailer with slightly messy stores that consumers are surprised to see is still around."

 

Email this article to a friend

You need to be logged in to use this feature.

Please log in here

Subscribe For Retail News

RETAIL EVENTS

The Retail Design Seminar 2018
The Retail Design Seminar 2018
14 November 2018
The Cavendish Conference Centre
The Retail Design Seminar 2018
Omnichannel Futures Conference 2019
Omnichannel Futures Conference 2019
6 February 2019
Cavendish Conference Centre, London WG1 9DT
A truly omnichannel offering requires an understanding of customer behaviour across all shopping channels and how this should impact your overall business strategy
Customer Engagement Conference 2019
Customer Engagement Conference 2019
5 June 2019
Cavendish Conference Centre, London W1
The 10th Annual Retail Customer Engagement Summit
AI in Retail Conference 2019
AI in Retail Conference 2019
18 September 2019
Cavendish Conference Center, 22 Duchess Mews, London W1G 9DT
Retail marketing is changing pace rapidly by making communication across all platforms personalised, relevant, efficient, and helpful. AI not only helps shoppers find a perfect product but also pre-empts the shopping behaviour and speeds up payment.
The HR Summit 2019
The HR Summit 2019
Tuesday 8 October 2019
The Cavendish Conference Centre, London W1
The 11th HR Summit 2019, The Cavendish Conference Centre, London W1, 8 October 2019
Fix The Dinosaur Roundtable 2018
Fix The Dinosaur Roundtable 2018
19 October 2018
The Euston Suite, The Hallam, 44 Hallam St, London W1W 6JJ
A Masterclass in IBMi Legacy Issues