WH Smith half year profits rise 3%

Group total sales declined 4% to £686m with like-for-likes down 5%.

Travel operating profit jumped 9% to £25m while high street profit remained flat at £47m.

Travel total sales were flat at £213m, while like-for-likes were down 3%

Its 581 high street stores saw total sales decline 6% to £473m with like-for-likes excluding entertainment down 3%, and overall like-for-likes down 6%.

High Street delivered cost savings of £7m in the period, £1m ahead of plan.

Group chief executive Kate Swann said: “We have delivered a good performance across the group, despite a difficult consumer environment.  

“In Travel we have grown profit by 9%, demonstrating the strength of the business model.  We are encouraged by the performance of our international units.

“Our High Street business continues to be highly profitable and cash generative.

“During the first half we have returned £27m to shareholders through the share buyback and increased the interim dividend by 18%, demonstrating the Board’s confidence in the future prospects of the Group and its continued cash generative nature.

“Looking forward, we expect the economic environment to remain challenging and we have planned accordingly.”

WH Smith said it continued to rebalance the mix of its business, “focusing on our core categories whilst reducing our presence in Entertainment”, which saw a 53% decline in like-for-likes in the period.

Entertainment now accounts for less than 5% of the business.

Stationery like-for-likes were down 2%, but WH Smith said it continues to build on its market leading position.

Books like-for-likes fell 3%, although gross margin was up year-on-year. WH Smith said the books market “continues to be soft with performance varying by sub-category”. 

News and Impulse like-for-likes declined 4%

WH Smith said while its travel arm performed well “despite continued soft passenger numbers”, air and rail were impacted by the weather pre-Christmas “and the economic climate more generally”.

WH Smith said it continues to “identify opportunities for growth in the UK”, opening 11 new units in the period, including two in airports, one in rail station, three in hospitals and five workplace units. 

During the second half the retailer expects to open 22 units, including three Funky Pigeon stores in rail stations. Funky Pigeon is the retailer’s greetings cards brand and operates online only at present.

In international, the retailer said it is beginning to look outside of airport locations, identifying opportunities in, for example, railway stations and hospitals. It has 40 units open or planned at present, across countries including India and Kuwait.