WH Smith saw profits in its travel arm rise 12% in the first half of the year as it prepares for life as a “pureplay travel retailer” later in the year.
The retailer is keen to reassure investors of its growth plans after jitters over its exposure to the US sent its share price down 27% since the end of January.
In its first major update since announcing the sale, WH Smith said it is “well positioned for future growth” with sales in airports and train stations up 6% to £712m, in the six months to 25 February.
The second half of the financial year has also started well, it said, and it remains on track to deliver full-year results in line with market expectations.
The retailer also announced an interim dividend of 11.3p “reflecting their confidence in the future growth prospects”.
Total group revenue grew just 3%, pulled down by weakening sales on the British high street which fell another 7% in the period. WH Smith confirmed the sale to Modella Capital should complete in the summer.
As a pure travel business, about a quarter of WH Smith’s revenue will come from the US. Investec warned last week the company may see more of an impact from a “macroeconomic slowdown rather than a tariff impact”, as weaker growth affects traveller numbers.
While WH Smith did not mention tariffs, its US travel sales grew just 3% in the period, reflecting slower growth than its other markets. The UK saw a rise of 7% and the rest of the world was up 15%.
“In North America, we are beginning to see the benefits of our work to re-engineer our space and improve our retail offer, with like-for-like revenue growth of 3% in the period,” said Carl Cowling, CEO.
“We continue to win new space, and I am delighted to announce we have recently secured a significant contract at a major East Coast airport.”
The retailer added it has seen a “notable increase” in tender activity in North America and announced additional new stores at Albuquerque and Portland airports. Alongside the East Coast airport, this will add a further 26 stores in North America, bringing the total number of stores won and yet to open to over 70.
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