WHSmith bounces back into black as travel retail rebounds

The retailer posted a profit before tax and underlying items of £14m in the six months to February 28, compared to a £19m loss a year ago.

WHSmith, which operates hundreds of stores in airports and train stations across the globe, was battered by the Covid-19 crisis and the restrictions placed on international travel.

Its travel division suffered a trading loss of £28m last year, but bounced back to register a £10m profit. Sales raked in through its travel locations more than doubled year-on-year to £338m. 

WHSmith’s high street division recorded an 8.3% uplift in trading profit to £26m, on flat sales of £270m. 

The group registered a pre-tax profit of £11m, compared to a loss of £37m during the same six-month period a year ago, on total sales of £608m. 

WHSmith said it had benefitted from an “encouraging improvement in passenger numbers” during the six-month period, driven predominantly by domestic and short-haul travellers.

Although the retailer admitted that there remain “some uncertainties in the global economy and the speed and shape of the recovery”, it insisted it was “confident” about the future prospects for its travel arm.

In its UK travel stores, revenues hit 97% of pre-Covid levels during the second half of WHSmith’s financial year to-date.

WHSmith said it had “experienced periods of strong growth, particularly over the school holidays, indicating good demand for a return to leisure travel”.

The retailer also pointed to “a healthy recovery in holiday bookings for 2022 versus pre-Covid levels” and said it had “a robust plan in place to maximise these opportunities over the key summer trading period”.

WHSmith chief executive Carl Cowling said: “The group has delivered a good performance with a strong rebound in profitability. We have seen a recovery across all our travel markets despite the impact of the Omicron variant in Q2, and we are in a strong position to capture growth as the recovery continues.”

He added: “We continue to invest in the business where we see attractive growth opportunities and have positioned the group well to benefit from the return of passenger numbers. We have improved the scale and footprint of the business and are operationally stronger than prior to the pandemic.

“While there are some uncertainties in the broader global economy, the group is well-positioned to capitalise on the ongoing recovery in our key markets and take advantage of the many opportunities ahead.”