Shares up after Travel arm boost for retailer as High Street stores meet expectations
As High Street stores perform in line with expectations, WHSmith’s pre-tax profit has edged up by £1million to £46m thanks largely to sales at its Travel arm.
The greeting card, stationery and convenience retailer has also offered a £50m share buyback scheme driving a significant rise in the group’s share price as it peaked at £13.78, up 151p, early yesterday, 12 September, following the profits announcement the previous day, and closed at £13.57, 130p up, at the end of business last night.
CEO Carl Cowling was pleased with the news, which came as the group – which now describes itself as a global travel retailer and operates 1,100 outlets across the UK – enters its close period ahead of reporting its preliminary results on 14 November.
“We have ended the financial year in a strong position,” Carl said, “delivering a performance in line with our expectations with good growth across our Travel businesses. Our UK division performed particularly well over the peak summer trading period.
“We are also announcing the launch of a £50m share buyback, which reflects strong ongoing cash flow, the receipt of the £85m pension fund buyout cash return, as well as the strength of our balance sheet, with leverage now within our target range.
“Our colleagues have worked extremely hard to deliver these results over what has been a very busy summer.”
In the announcement WHS said it expects group revenue for the year to 31 August to rise by 7%, driven by a 10% increase on the Travel side, with High Street and its internet businesses taken together and dropping by 4%.
On like-for-like sales, the Travel arm was up 10% in the UK making a 9% rise across the worldwide operation, while there was a 2% drop on the High Street, giving a group L-F-L total increase of 5%.
The statement said: “Our High Street business has performed in line with expectations. During the second half, we have successfully opened 30 Toys R Us shop-in-shops within our stores and we expect to open a further 37 Toys R Us shop-in-shops ahead of Christmas 2024, taking us to a total of 76.”
While WHSmith began as a newsagent store in London’s Grosvenor Street in 1792, travel is in its DNA as the company opened the world’s first travel retail store at Euston Station in 1848 and now has almost 1,800 outlets across more than 30 countries worldwide, and a presence in 125 airports.
