‘Stable’ £1.6bn UK greeting card market helps retailer’s significant recovery to ‘strongest-ever position’
The stable and substantial greeting UK card market has helped WHSmith return to profit as the retailer reported a “significant recovery” with total sales rising 92% to its “strongest-ever position”.
With a “resilient and profitable performance” in the High Street division, and its online greetings arm Funkypigeon.com “recovering well” following a cyber incident back in April, WHS was boosted by a strong performance in its travel stores with revenue jumping 148% in the 10-week period to 5 November, 2022.
The announcement today, 10 November, showed the 230-year-old greeting card, book and stationery retailer has had a successful year, posting a headline pre-tax profit of £73million in the 12 months to 31 August, compared to a £55m loss last year, with revenue climbing to £1.4billion from £886m in the previous 12-month period.
The High Street stores grew pre-tax profit to £33m from £19m despite a 2% fall in revenue to £473m, while the travel business performed particularly well, posting a trading profit of £89m compared to a prior loss of £39m.
While first half revenue was impacted by the Covid-19 omicron variant from December to February, the business benefited from a recovery in the travel market in subsequent months which meant sales rose by 131% to £927m.
Carl Cowling, WHSmith group chief executive, said: “This has been a successful year for WHSmith and we enter the new financial year with the group in its strongest-ever position as a global travel retailer with multiple growth opportunities across the world.
“Our High Street division, including our online businesses, delivered another resilient and profitable performance. These businesses continue to generate strong cash flow allowing us to invest across the group. The achievements of the last year are due to the tremendous efforts of the entire team around the world for which I am sincerely grateful.”
The report released today said Funkypigeon.com’s total revenue of £35m against 2021’s £54m, was as expected with headline EBITDA of £8m against the previous year’s £14m, reflecting the cyber incident in April.
It added: “Funkypigeon.com is recovering well and we are confident of the substantial opportunities to grow the platform further, and significantly grow revenue and profits over the medium-term. The market for greeting cards in the UK is substantial and estimated at £1.6bn with online penetration continuing to grow. The UK greeting card market has been stable with adults sending on average 20 greeting cards per person each year.
“We have redeveloped the Funkypigeon.com app to improve customer conversion and we have also launched a next-day delivery service which operates seven days a week to further enhance our customer proposition. This has received very positive customer feedback.”
Having opened 98 new stores in the year, further expansion is planned with 150 new stores in the pipeline across 16 countries, and Carl commented: “We have started the year well and, while there is economic uncertainty, travel patterns globally continue to improve and this, combined with the strength of the group’s growth opportunities, means that we are well positioned for a year of significant progress in 2023.”
