WH Smith chief mulls return to overseas markets

The chief executive of WH Smith has put taking the newsagent chain overseas again back on her agenda, along with finding new places to expand in the UK.

Kate Swann said overseas expansion was an option once she had exhausted opportunities to grow in the UK. "We haven't focused further afield yet," he said.

Such a move would be a strategic U-turn for a company that has exited countries such as the US, Singapore, New Zealand and Australia in the past few years. Its sole remaining asset outside the UK is a store it leases in Paris.

Ms Swann, who yesterday unveiled plans to open 70 Post Office franchises in WH Smith high street stores, is seeking ways to counter a sales slump in the company's core high street business that shows no sign of abating. This has included franchising the WH Smith brand to 50 Moto motorway services stations and entering similar trials with Roadchef and Welcome Break. The group could also expand the 10 outlets it has in hospitals.

Ms Swann's decision to replace less profitable entertainment sales with higher margin products such as stationery is taking its toll on the group's underlying sales but boosting its profits.

A trading update issued alongside interim results showed that in the six weeks since the beginning of March, like-for-likes sales fell 7 per cent at its high street chain. A 2 per cent rise in underlying sales at its travel business helped to compensate, leaving current group like-for-like sales down 5 per cent.

Pre-tax profits in the six months to 28 February rose by 7.3 per cent to £59m, ahead of expectations. This was despite a 6.5 per cent drop in group sales to £721m. The group's recovery under Ms Swann has put the top team within reach of the maximum payout under an incentive scheme that runs until August.