WHSmith losses narrow as retailer forecasts return to profitability in 2022

For the year ending August 31, 2021, WHSmith reported group loss before tax of £116m, strengthening from a £280m loss the previous year.

The retailer also reported strong recoveries in group loss before tax and non-underlying items (£51m, down from £68m) and group loss from trading operations (£8m, down from £31m last year). 

The recovery was driven by a return to profit for WHSmith’s high street business arm, which jumped from a £4m loss last year to a £36m profit.

The retailer’s US business also returned to a £2m profit, driven by a strong recovery in the country’s domestic and international tourism. 

WHSmith flagged the growing importance of the US to its strategy, highlighting plans to open 58 of its 100 new travel stores in the country over the next three years. 

The business noted improving travel trends more generally and said that total travel revenue is now at 84% of October 2019.

Group revenues for the period were £886m, down 13% year on year. Travel UK revenues were £195m, down 43%, while US revenues jumped 43% to £166m. 

Chief executive Carl Cowling said: “The group has delivered a good performance in the evolving trading environment. Thanks to the outstanding efforts of all our colleagues across the business, we have continued to adapt successfully to the changing environment and we are now in a strong position to grow our business as our markets continue to recover, returning to meaningful profitability in the current financial year.

“In Travel UK, we are delighted to have won all 30 of the technology stores across UK airports. This is a significant win for the group and we look forward to showcasing the very best of our US brand, InMotion, in these locations.

“These latest wins mean InMotion is now the largest technology retailer in travel locations in the world and we see plenty more opportunity to grow the brand globally.

“In addition to the InMotion stores in the UK, we have a very strong pipeline of new store openings with over 100 stores already won and due to open in Travel over the next three years – the majority of these in North America. We expect more space to become available as our markets recover and we are very well-positioned to benefit from these opportunities.

“Despite the challenges of the UK high street more generally, our high street business has delivered a resilient and profitable performance. Our online businesses have delivered strong growth in the year, including a record performance from Funky Pigeon.

“I would like to take this opportunity to thank the entire team for their outstanding contribution in another challenging year. We have made excellent progress and none of this would be possible without their hard work and commitment.

“We are a financially strong and resilient group with significant opportunities to grow. While we continue to plan with caution, the Group is well-positioned to capitalise on the recovery in our key markets and take advantage of the many exciting opportunities ahead.”