WH Smith pays out £90m but cautious

WH Smith is to return £90m to shareholders but warned yesterday that it remains cautious about consumer spending following a fall in sales over Christmas.

The high street retailer said £60m would be paid out via a special dividend of 33p a share while a further £30m will be returned through share buybacks.

Chief executive Kate Swann said: "The cash return to shareholders reflects our confidence in the cash generative nature of our business and our commitment to maintain an appropriate capital structure."

Like-for-like sales across the group's high street stores fell 3 per cent in the 21 weeks to 26 January. But in the company's travel outlets in railway stations and airports sales were up 1 per cent in the period.

In the high street stores, entertainment had performed better than expected due to a boost from sales of games. Autobiographies from Russell Brand and Richard Hammond sold well along with the Guinness World Records book.

Ms Swan said the average WH Smith transaction was £5, which would give it resilience in a consumer slowdown. "Consumers will still buy newspapers," she said.