WH Smith swings back to profit after travel market rebound

The firm said total sales across its travel business surged past levels seen before the pandemic struck, at 130% of 2019 revenue in the second half.

Holly Williams
Thursday 10 November 2022 13:59 GMT
WH Smith resumed dividends for investors (John Stillwell/PA)
WH Smith resumed dividends for investors (John Stillwell/PA) (PA Wire)

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Retailer WH Smith has swung to an annual profit thanks to a rebound in the global travel market and a resurgent performance on the high street.

The group posted headline pre-tax profits of £61 million for the year to August 31 against losses of £104 million the previous year, when Covid restrictions impacted its retail chain and network of sites based at travel hubs worldwide.

WH Smith said total sales across its travel business surged past levels seen before the pandemic struck, at 130% of 2019 revenue in the second half, or 92% on a like-for-like basis.

Its high street arm traded at 82% of 2019 levels in the final six months, or 83% on a comparable store basis.

We are very well positioned to capitalise on the significant space growth opportunities across each of our markets

WH Smith

The figures come as Londoners suffer severe transport disruption once again due to a strike by underground workers, but WH Smith chief executive Carl Cowling said the impact would not be material to its rail station sites.

He told the PA news agency: “That’s not to say it doesn’t affect us. It’s not helpful and there will be less people in London.

“It would be great if there could be a resolution, but it’s not material to our business.”

WH Smith resumed dividends for investors, with a final payout of 9.1p per share after the turnaround in the past year and as it said solid trading had continued into the new year, with travel sales at 148% and high street at 87% of 2019 revenues in the 10 weeks to November 5.

The group has cheered a sharp recovery at airport stores in particular over the summer amid a steep increase in holidaymakers travelling internationally as travel markets reopened worldwide.

Across its UK travel division, which also includes hospital sites, sales in July and August jumped to 121% and 126% of 2019 levels, even with disruption at airports and caps to limit the number of passengers travelling.

The group has been buoyed by expansion in the travel sector, having purchased US-based airport technology retailer InMotion in 2018.

It is rolling out 150 new stores across 16 countries, including 70 in North America and across airports such as Los Angeles, Salt Lake City, Brussels, Oslo and Melbourne.

Its boss said the group is eyeing further global expansion to further bolster its position in the market.

Mr Cowling said the firm sees “significant scope to grow the brand globally”.

It is also rolling out its health and beauty range as it strives to make its travel stores a “one-stop-shop” for everything from newspapers to bluetooth headphones and medicine.

The group launched its first rail store in this format at Euston in London and plans to trial it across another eight major train stations, including London Paddington, London Victoria and London Liverpool Street.

Mr Cowling told PA that the group was “quite insulated” against the consumer retrenchment due to the cost-of-living crisis, given that shoppers largely visit its stores for “essentials”.

“We don’t sell luxury items and while for some it’s a real issue, in terms of looking forward into 2023, it doesn’t affect the WH Smith business in quite the same way,” he said.

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