WHSmith hails ‘better than expected’ sales as high street stores recover

Revenue in the retailer’s high street division reached 74% of 2019 levels in January and 84% of 2019’s total during February.

WHSmith said both figures came in ahead of its previous expectations.

The results, however, were aided by “significant growth” in WHSmith’s online business, which sits within its high street division.

Its online greeting cards business, Funky Pigeon, registered record sales during the Valentine’s Day trading period.

By contrast, WHSmith’s travel division remained challenged during the first two months of the year. Revenues amounted to just 35% of 2019 levels during January and 33% in February.

The US, where domestic flights are still being operated, remained WHSmith’s best performing travel retail market.

WHSmith said that, as a result of its better-than-expected start to the year, its cash burn had improved. The business previously warned that it was burning through £15m to £20m every month during the coronavirus-induced trading restrictions, but said that would likely reduce to £12m to £17m between January and March.

The retailer has extended the maturity of its two existing £200m loans until October 2023, and agreed a new minimum liquidity covenant for both the August 2021 and February 2022 tests to further strengthen its financial position.

It said the moves have allowed it to cancel an existing £120m loan, which had been undrawn and was due to expire in November.

WHSmith will post its interim results on April 29.