Half-year results are positive, but sales remain level, as retailer emphasises efficiencies
WHSmith presented a mixed bag as it reported its interim results this morning. The mixed merchandiser recorded a profit before tax of£61 million for the six months to February 28, a significant improvement on the£72 million loss made in the same period a year before.

However, total sales were flat at£1.4 billion, with high street like-for-like sales down 3 per cent. This was offset by improvements in like-for-like sales at the retailer's news distribution and travel retail arms of 2 per cent and 4 per cent respectively.

The results were in line with analysts' expectations for the period, However, Seymour Pierce analyst Richard Ratner pointed out that the first half of the year, which includes Christmas takings, is the retailer's main money making period. He believes the retailer's end-of-year pre-tax profit will rise by only another£8 million.

Ratner also said the retailer's results were down to a tight rein on costs, rather than revenue growth. 'It's doing well on sorting out product, but top-line growth is not so good,' he said.

WHSmith reported retail sales in the seven weeks to April 16 were flat, but gross margin was up on last year.

Group chief executive Kate Swann was bullish in her appraisal of the half-year, and said: 'We have improved profits substantially across the group in the first half and, while it is early days and much remains to be done, we are on track in the delivery of our recovery plan.

'In high street retail, we have improved the business's profitability by being more efficient, increasing product choice, improving availability and store standards. Trading conditions are tough. However, we remain confident in the outcome for the full year.'

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