WH Smith returns to profit after rebound in travel market

Retailer WH Smith turned a full-year profit on a rebound in the global travel market and a resurgent performance on the high street.

The group recorded overall pre-tax profit of £61m for the year to August 31 compared to losses of £104m the year before when Covid restrictions impacted its retail channel retail and its network of locations based in travel hubs around the world.

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

Its main leg has traded at 82% of 2019 levels over the past six months, or 83% on a same-store basis.

The figures come as Londoners again face severe transport disruption due to a strike by Tube workers, but WH Smith chief executive Carl Cowling said the impact would not be significant at sites of its stations.

He told the PA news agency: “That doesn’t mean it doesn’t affect us. It’s not useful and there will be fewer people in London.

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

WH Smith has resumed dividends for investors, with a final payout of 9.1p per share after last year’s turnaround and, as he said, strong trading had continued over the new year, with travel sales up 148% and high street sales up 87% of 2019 revenue in the 10 weeks to November 5.

The group applauded a strong recovery in airport stores, particularly over the summer, amid a surge in the number of holidaymakers traveling overseas as travel markets reopened around the world.

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

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

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

Its boss said the group is considering further global expansion to further strengthen its market position.

Mr Cowling said the company saw “significant scope to grow the brand globally”.

It’s also rolling out its health and beauty line, working to make its travel stores a “one-stop-shop” for everything from newspapers to Bluetooth headphones and medication.

The group has launched its first rail store in this format at Euston in London and plans to test it at eight other major stations, including London Paddington, London Victoria and London Liverpool Street.

Mr Cowling told PA the group was ‘fairly insulated’ against consumer pushback 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 that’s a real issue, looking ahead to 2023, it doesn’t affect WH Smith’s business in the same way.” he declared.

Willie R. Golden