WHSmith profits slip despite solid travel showing

The stationery specialist suffered a 1% drop in pre-tax profit to £82m during the six months to February 28.

The earnings slowdown came despite a 7% increase in sales from its UK and international travel arm. A like-for-like fall of 4% from its high street division contributed to a 1% total sales dip for the period at a group level.

WHSmith said the high street performance was “expected”, pointing to a lack of major seasonal publishing trends at Christmas.

Despite this, stationery sales and its 2018 fashion ranges performed “particularly well”.

The business achieved cost savings of £7m in the high street business during the period and said it has identified a further £5m for the second half.

This, it said, puts it £3m ahead of its original cost efficiencies plan for the division.

Innovation in travel

WHSmith chief executive Stephen Clarke hailed strong sales from the travel division, which delivered a 5% profit gain to £41m.

He also flagged the “record” number of international tender wins, with 26 new units already secured in 2018, including a major scheme for Madrid airport and a first entry into South America in Brazil.

Travel like-for-likes rose 3% with the UK making a solid contribution, as airport and hospital stores registered like-for-like gains of 5% and 4% respectively. Only rail failed to deliver increased sales as bad weather and cancelled services took a toll.

WHSmith pledged to continue innovating in its travel shops, with its ‘Tech Express’ format and book offer a particular focus.

It is also expanding its food proposition with more healthy eating options available, including protein bars and wraps.

Clarke believes the company is in good shape for the rest of the year.

He said: “While there is some uncertainty in the broader economic environment, we have made a good start to the second half of the financial year, increased the interim dividend by 10% and are confident in the outcome for the full year.”