WH Smith chief rules out early break-up plans

W H Smith's chairman, Jeremy Hardie, ruled out a break-up of the struggling retail group yesterday, saying the appointment of a new chief executive remained the priority. Speaking as W H Smith announced a rebound in full- year underlying profits to pounds 124m, Mr Hardie said the company would stick to the strategy developed by Bill Cockburn, whose shock decision to quit as chief executive in June plunged the group into fresh turmoil.

"We have no plans for a break-up," he said. "A year ago we had a strategic review and disposed of some assets such as Do It All and business supplies. The strategy we developed then is being implemented now. What you don't do is thrash about changing things."

Mr Hardie admitted that he could not dismiss a break-up entirely as the incoming chief executive may view the situation differently. However, he said none of the candidates interviewed for the post had expressed a different view as to the company's best method of rebuilding shareholder value.

Mr Hardie, who has been spending all his time at the company even though he is supposed to be part-time chairman, disappointed the City by giving precious little fresh information about the chief executive search. "It is only two months since Bill Cockburn left and if you are going to do a professional job it takes longer than that. You don't find a chief executive by looking at the small ads overnight." He said the interviews had been completed but did not rule out additional candidates coming forward.

At present the leading external candidate is Stuart Rose, the former Burton director. The three internal candidates are Alan Giles, John Hancock, and Richard Handover.

Keith Hamill, the group's finance director who was considered a front- runner prior to his decision to pull out at the weekend, said he was happy to work under someone else and had no plans to quit. "I'm quite happy here. I'm not roving about talking to headhunters."

He denied he had canvassed support for a break-up but admitted that he had been "quite loud" about the company being under-valued when the shares fell to 350p.

Some analysts say the group could be worth more than its current market value of just over pounds 1bn if parts of the group such as the Waterstones books division and Virgin Our Price, were sold.

Mr Cockburn, who joins BT as head of its UK operations in October, will not return to Smith's after taking August as holiday. However, he telephoned the company yesterday saying he would waive his September salary, worth around pounds 35,000.

WH Smith's pre-tax profits of pounds 124m for the year to 31 May followed the previous year's pounds 194m loss, which was struck after heavy exceptional items.

However, there were fresh problems in the main WH Smith retail business, where the group was forced to make a pounds 6m provision for pounds 20m of excess stock. The company said the unsold books, music and videos were a result of over-buying and a failure to mark poor sellers down soon enough.

Mr Hardie said he was confident that the business could be turned around. "There is a big market for a mainstream store providing music, books and so on, regardless of the inroads the specialist retailers and supermarkets are making."

There was also a pounds 73m pension write-off caused by the recent changes to Advance Corporation Tax in the Budget.

Like-for-like sales at the core business rose by just 1.5 per cent last year and by 2 per cent in current trading.

In the rest of the business, Waterstones remained the star performer, increasing profits from pounds 15m to pounds 20m. But profits at Virgin Our Price fell from pounds 18m to pounds 14m due to a weak roster of music releases.

Group sales were up 4 per cent at pounds 2.75bn and the dividend was maintained at 15.65p. The shares closed 9p higher at 376.5p.

Comment, page 17

Suggested Topics
PROMOTED VIDEO
News
peopleGerman paper published pictures of 18-month-old daughter
Arts and Entertainment
'A voice untroubled by time': Kate Bush
musicKate Bush set to re-enter album charts after first conerts in 35 years
Life and Style
tech
Arts and Entertainment
Robin Williams' life story will be told in a biography written by a New York Times reporter
arts + ents
News
i100
Life and Style
food + drink
Life and Style
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Voices
voices
Sport
Roger Federer is greeted by Michael Jordan following his victory over Marinko Matosevic
tennisRoger Federer gets Michael Jordan's applause following tweener shot in win over Marinko Matosevic
News
peopleJustin Bieber accuses paparazzi of acting 'recklessly' after car crash
News
people
Arts and Entertainment
Oppressive atmosphere: the cast of 'Tyrant'
tvIntroducing Tyrant, one of the most hotly anticipated dramas of the year
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Client Services Executive / Account Executive - SW London

£23000 - £26000 per annum: Ashdown Group: Account Executive / Client Services ...

PA to CEO / Executive Secretary

£36000 - £38000 per annum: Ashdown Group: Executive PA to CEO & Executive Dire...

Generalist HR Administrator, Tunbridge Wells, Kent - £28,000.

£25000 - £28000 per annum: Ashdown Group: Generalist HR Administrator - Tunbri...

Senior C# Developer (.NET, C#, JMS, TDD, Web API, MVC, integrat

£45000 - £75000 per annum + benefits+bonus+package: Harrington Starr: Senior C...

Day In a Page

Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?
Rachael Lander interview: From strung out to playing strings

From strung out to playing strings

Award-winning cellist Rachael Lander’s career was almost destroyed by the alcohol she drank to fight stage fright. Now she’s playing with Elbow and Ellie Goulding
The science of saturated fat: A big fat surprise about nutrition?

A big fat surprise about nutrition?

The science linking saturated fats to heart disease and other health issues has never been sound. Nina Teicholz looks at how governments started advising incorrectly on diets
Emmys 2014 review: Can they genuinely compete with the Oscars

Can they genuinely compete with the Oscars?

The recent Emmy Awards are certainly glamorous, but they can't beat their movie cousins
On the road to nowhere: A Routemaster trip to remember

On the road to nowhere

A Routemaster trip to remember
Hotel India: Mumbai's Taj Mahal Palace leaves its darker days behind

Hotel India

Mumbai's Taj Mahal Palace leaves its darker days behind
10 best pencil cases

Back to school: 10 best pencil cases

Whether it’s their first day at school, uni or a new project, treat the student in your life to some smart stationery
Arsenal vs Besiktas Champions League qualifier: Gunners know battle with Turks is a season-defining fixture

Arsenal know battle with Besiktas is a season-defining fixture

Arsene Wenger admits his below-strength side will have to improve on last week’s show to pass tough test
Pete Jenson: Athletic Bilbao’s locals-only transfer policy shows success does not need to be bought

Pete Jenson: A Different League

Athletic Bilbao’s locals-only transfer policy shows success does not need to be bought
This guitar riff has been voted greatest of all time

The Greatest Guitar Riff of all time

Whole Lotta Votes from Radio 2 listeners
Britain’s superstar ballerina

Britain’s superstar ballerina

Alicia Markova danced... every night of the week and twice on Saturdays
Berlin's Furrie invasion

Berlin's Furrie invasion

2000 fans attended Eurofeurence
‘It was a tidal wave of terror’

‘It was a tidal wave of terror’

Driven to the edge by postpartum psychosis