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WH Smith has seen a strong rebound and revenues and moved back into profit as travel retail sales rebounded amid the relaxation of Covid restrictions.

Total group revenue in the six months to 28 February were up 45% to £608m largely due to a steady recovery in travel from September to November.

Although this period was interrupted by the Omicron variant from December to February, since then the group said it has seen a relaxing of restrictions around the world.

In total travel revenues were up 125% year-on-year and at 82% of 2019, compared to 63% in the fourth quarter of the previous financial year. In the 8 week period to 23 April 2022, travel revenue has been 114% of 2019 levels, which WH Smith said “demonstrates the strength of the recovery”.

Over the Easter holiday period, travel revenue was at 126% of 2019.

WH Smith also said it had a strong new store pipeline to tap this recovery, with over 125 stores won in travel, including 63 in North America and 31 in Spain and 28 new InMotion technology stores now open in UK airports.

The group said it also saw “consistently good” performance in High Street throughout the half with the important December trading period at 90% of 2019 and flat year-on-year.

Headline group profit from trading operations for the period was £36m, up from a loss of £4m last year, headline group profit before tax and non-underlying items at £14m up from a loss of £19m.

Group profit before tax, on a statutory basis was £18m compared to a £38m loss in the same period last year.

Looking forwards, the group said that, given its low ticket-value categories and strong supplier relationships, it is managing the impact of current inflationary pressures.

Meanwhile it remains well placed for the ongoing travel recovery and the key summer trading period which “gives the board confidence in the outlook for the remainder of the financial year”.

CEO Carl Cowling, commented: “The Group has delivered a good performance with a strong rebound in profitability. We have seen a recovery across all our travel markets despite the impact of the Omicron variant in Q2, and we are in a strong position to capture growth as the recovery continues.

“Looking ahead, we continue to invest in the business where we see attractive growth opportunities and have positioned the group well to benefit from the return of passenger numbers. We have improved the scale and footprint of the business and are operationally stronger than prior to the pandemic.

“While there are some uncertainties in the broader global economy, the Group is well positioned to capitalise on the ongoing recovery in our key markets and take advantage of the many opportunities ahead.”

WH Smith shares have fallen 5% on the update to 1,435.5p.

Morning update

Coca-Cola Europacific Partners has posted organic growth of 18.5% in the first quarter as out of home consumption rebounded, while headline revenues were boosted by its 2021 acquisition of Coca-Cola Amatil.

Overall revenues were up 62%, driven by organic growth and the acquisition, to €3.7bn.

Pro forma comparable volume were up 16% (and by 3.5% compared to pre-pandemic 2019) driven by the reopening of the away from home channel in Europe, solid trading in Asia Pacific, a great start to Ramadan in Indonesia and soft year-on-year comparables.

Out of home organic volumes were up 40%, reflecting the relexaction of Covid restrictions in Europe and the recovering of immediate consumption packs (up 52% year-on-year).

Home consumption proved resilient too, with comparable volumes up 4% driven by “solid in-market execution”.

Price per case was up 3.5% over the quarter, reflecting positive pack & channel mix led by the recovery of out of home, alongside favourable price across all markets

GB revenues were up 26.5% (on an fx neutral basis), with growth reflecting strong recovery of the out of home channel, ahead of 2019, as well as soft comparables from cycling tough restrictions last year and a solid performance in the Home channel.

Coca-Cola, Fanta, Sprite & Monster volumes were all ahead of 2019 in Great Britain.

The strong first quarter performance has seen CCEP raise its pro forma comparable growth guidance for the full year to 8-10% (previously 6-8%), weighted towards volume growth reflecting continued recovery in out of home.

Cost of sales per unit case will be up 7% (previously 5%), as commodity inflation is expected to be in the high-teen range, meaning profit expectations are unchanged.

CEO Damian Gammell commented: “”We have had a fantastic start to the year, delivering strong top-line growth and value share gains.

“Together with The Coca-Cola Company and our other brand partners, our relentless focus on our core brands, solid in-market execution and driving price and mix delivered both volume and revenue ahead of 2019. Volume improved strongly as consumers enjoyed the continued reopening of the away from home channel, with resilient demand in the home channel and a record start to our biggest ever activation in Indonesia during Ramadan.

“We remain well placed over 2022 and beyond. Our aim is to be smart and sustainable - through our people centric, data driven and digitally enabled approach. Disciplined investment in these areas, as well as in our portfolio, will support our long-term growth ambitions.

“In the near-term, whilst we expect to see further volume and mix recovery, we are mindful of a more uncertain outlook given accelerating inflationary pressures. So, we continue to manage our key levers of pricing, promotional spend and efficiencies across our business.

“These commitments, combined with today’s interim dividend declaration demonstrate the strength and resilience of our business, as well as our ability to deliver continued shareholder value.”

Recipe box provider Gousto has posted a ninth consecutive year of double-digit revenue growth, achieving £315m in revenue in 2021, up 67% year-on-year.

In total the company sold over 90m Gousto meals in 2021, up from 53m in the previous year as it invested in mealtime choice, with over 60 different recipes to choose from each week.

Despite sustained investment in technology, automation of operations and additional production capacity, the business also delivered a 10% increase in underlying EBITDA to £20m.

Timo Boldt, Founder & CEO of Gousto, said: “2021 was a standout year for Gousto, as we grew headcount, invested significantly in automation, further improved the customer offer, raised capital and welcomed a number of new blue-chip investors onto our shareholder register. And we achieved all this whilst growing customer numbers and delivering a ninth consecutive year of strong revenue growth, cementing the gains we achieved in the prior year and fully capitalising on the embedded megatrends that are driving today’s grocery market.

“It is Gousto’s vision to become the UK’s most loved way to eat dinner. Gousto is reformulating parts of the UK food system, reducing food waste and carbon emissions per meal consumed. Simultaneously we are removing the friction points that obstruct healthy eating by providing a highly convenient, scratch-cooking solution, at value. Where we have influence, we aim to drive a long-term shift in the UK’s food culture - creating a healthier, more sustainable food system.”

Vimto owner Nichols has said it has continued to demonstrate strong growth in the first three months of 2022, increasing 28.9% year-on-year to £39.6m.

The Vimto brand has outperformed the wider UK soft drinks market, achieving growth of 10.8% in value terms in the year to date, versus 9.8% value growth across the wider UK soft drinks market.

The Group’s out of home route to market continues to recover from the impact of the pandemic and has seen significant growth (+1,387%) year-on-year given the COVID restrictions through the same quarter last year.

However, the group’s International business had a slower start to 2022 than in the prior year (-16%) as shipment timings were severely impacted towards the end of the quarter by national driver industrial action in Spain due to rising fuel prices, which caused disruption to shipping timetables.

The action has now ended and the Group’s International shipments have resumed.

Nichols said it continues to experience significant inflationary pressure, but has plans in place to mitigate these in line with forecasts, which remain unchanged.

Meanwhile, after over 50 years with the Group and 15 years as chairman, John Nichols has informed the board of his intention to retire from the group once a suitable replacement is identified and appointed.

Nichols has commenced a formal process to recruit his successor and will “ensure in that process the board retains the skills and experience necessary to support the ongoing delivery of the group’s strategy”.

Morrisons has placed £1.075bn of 5.5% corporate bonds due in 2027 to refinance the debt Clayton, Dubilier & Rice incurred when buying the supermarket.

Supermarket Income REIT has announced it has raised gross proceeds of £300m from the issuance of new shares to raise capital to buy more supermarket property.

It decided to increase the size of the Issue from £175m to £300m due to “the extremely strong level of support and quality of demand from investors in the Issue, which materially exceeded the target Issue size”.

The offer also reflected confidence in acquiring assets in the pipeline and the increase in the availability of attractive investment opportunities since the marketing roadshow began.

Finally, Greggs has appointed Lynne Weedall as an independent non-executive director, with effect from 17 May 2022.

Weedall is an “experienced people and business transformation executive”, having held senior positions most recently at Selfridges, and before that at Carphone Warehouse, Whitbread and BUPA.

Greggs intends that Weedall will be appointed as chair of the remuneration committee when Helena Ganczakowski steps down from the Board in 2023.

Ian Durant, chair of Greggs, said “We are delighted that such an experienced non-executive director has accepted our invitation to join the Board. Lynne brings with her extensive experience of HR & transformational change, and will add significant value to our Board during this transitional phase and beyond”.

On the markets this morning, the FTSE 100 is up 0.2% to 7,402.6pts.

Risers include Kerry Group, up 1.5% to €101.15, Bakkavor, up 1.5% to 108.8p and Deliveroo, up 0.4% to 103.5p.

Fallers include Nichols, down 3.6% to 1,320.6p, Naked Wines, down 2.7% to 364.8p and Marks & Spencer, down 2.4% to 138.3p.

Yesterday in the City

The FTSE 100 closed down 0.1% yesterday to 7,386.2pts, but it was a poor day for a number of consumer stocks.

Associated British Foods was one of the FTSE 100’s biggest fallers, dropping 5% back to 1,548.5p despite posting strong growth as it warned it would be forced to increase prices to cope with mounting inflation.

A number of online stocks were on the slide, including Ocado, down 8.3% to 950p, THG, down 8.3% to 107p and Deliveroo, down 8% to 103.1p, while Ocado partner Marks & Spencer was down 7.4% to 141.7p.

McColl’s slid another 31.8% to just 1.21p, while other fallers included McBride, down 4.5% to 36.3p, Pets at Home, down 2.5% to 293.2p, Coca-Cola HBC, down 2.5% to 1,598p, DS Smith, down 2.2% to 319.9p and B&M European Value Retail, down 2% to 502p.

The day’s few risers included AG Barr, up 1.5% to 553p, FeverTree, up 1.3% to 1,798p, Unilever, up 1% to 3,642p and Diageo, up 0.8% to 3,972p.

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