‘Good performance’ at retailer’s High Street and online greetings arms
WHSmith ceo Carl Cowling says the retailer is in its “strongest ever position” following its latest half-year results, which showed that group revenue has risen by 8% to £926million.
Soaring sales in the travel division, which includes stores in railway stations and airports across the UK, North America and the rest of the world, saw total revenue increase by 13% in the six months to 29 February.
And the report stated there was a “good performance” over the period in the High Street arm, which was founded in 1792, with store like-for-like revenue up 1% year-on-year during the important Christmas trading period, although the sector’s trading profit was down to £22m from £24m in the same period a year prior.
Meanwhile, its online greetings arm Funkypigeon.com delivered total revenue of £18m, up from £17m in 2023, and doubled headline earnings before interest, tax, depreciation and amortisation (ebitda) to £2m – and the report said: “We continue to see opportunities to grow the platform further and grow revenue and profits over the medium-term.”
Carl said: “The group is in its strongest ever position as a global travel retailer. We have had a good first half and our businesses are well positioned for the peak summer trading period. Total Travel revenue is up 13%. The board is today announcing an interim dividend of 11.0p reflecting current trading and the significant medium and long-term prospects for our global travel business.
“Our Travel divisions are trading well and I am particularly pleased with the outstanding performance from our UK Travel business which has seen a 19% increase in trading profit. We continue to make excellent progress in this division, growing our space and broadening our categories as we transition to a one-stop-shop for travel essentials.
WHSmith now has a new store pipeline of over 80 sites won and yet to open in its travel division, 50 of which are in North America, and with its peak summer trading period still to come, the retailer said it is on track to meet its full-year expectations after making a good start to the second half of its financial year, with Carl adding: “We are confident that 2024 will be another year of significant progress for the group.”
Although not picked out in the update, part of the Travel expansion includes the group’s new bespoke Curi.o.city brand selling high-end stationery and gifting which has 23 locations in the UK and internationally since its introduction mid last year with outlets in Belfast City Airport, Gatwick Airport, Bristol Airport, St Pancras Station and Selfridges in Birmingham and Manchester as well as two standalone shops in the UAE and 15 concessions within Borders stores across the Middle East.
The statement admitted that, as the Travel division grows, High Street is becoming a smaller part of the group, now accounting for around 15% of full year overall profits but “is profitable and highly cash generative”, operating from 506 stores on 29 February, down from 514 in August 2023.
The division delivered a good performance in the half year, in line with expectations, and the report added: “Our strategy for our High Street business is clear and consistent – to manage our space to maximise returns and maintain a flexible cost structure – and the strategy remains as relevant today as it has ever been and focuses on delivering robust and sustainable cash flows and profits.”
As part of the approach to space management, WHS High Street will be extending its partnership with ToysRUs having recently signed a new exclusive agreement to deliver a further 30 store-in-stores by the end of this financial year providing customers in those locations with an improved toys and games offer.
