WH Smith eyes return to profit amid travel rebound and high street revival
High street stalwart WH Smith is eyeing a return to “meaningful profitability” in the current financial year amid a continued recovery in its travel stores.
The prediction came as the 229-year-old newsagent and book seller cut its annual losses by more than half as it was also boosted by sales growth in its traditional high street stores.
The group reported a group pre-tax loss of £104 million for the year to August, reducing its losses from £226m a year earlier.
Total revenues for the year fell by 13 per cent to £886m.
WH Smith's high street business returned to growth over the year, although this was more than offset by lower sales from train station and airport shops amid reduced traveller footfall.
High street revenues increased by 4 per cent to £485m for the year.
The group said the high street retail business has continued to deliver a "robust performance" since the new financial year started in September.
Chief executive Carl Cowling said: "Despite the challenges of the UK high street, more generally, our high street business has delivered a resilient and profitable performance.
"Our online businesses have delivered strong growth in the year, including a record performance from funkypigeon.com."
The firm's travel business saw sales slide 27 per cent to £401m over the past year, with a 43 per cent slump across its UK travel stores as people worked from home.
However, the retailer said it has seen "improving trends" within its travel arm, with sales for last month at 84 per cent of the levels from October 2019.
Over the year the group expanded its airport technology stores businesses and said it has a "very strong pipeline of new store openings, with over 100 stores already won and due to open in travel over the next three years", with the majority of these in North America.
Cowling told investors: “The group has delivered a good performance in the evolving trading environment.
“Thanks to the outstanding efforts of all our colleagues across the business, we have continued to adapt successfully to the changing environment and we are now in a strong position to grow our business as our markets continue to recover, returning to meaningful profitability in the current financial year.
“We are a financially strong and resilient group with significant opportunities to grow. While we continue to plan with caution, the group is well positioned to capitalise on the recovery in our key markets and take advantage of the many exciting opportunities ahead.”
He added: “I would like to take this opportunity to thank the entire team for their outstanding contribution in another challenging year. We have made excellent progress and none of this would be possible without their hard work and commitment.”
In July, WH Smith snapped up a raft of former Dixons Travel stores in airports as it expands its InMotion technology and accessories business into the UK.
The group bought 18 stores, including 17 Dixons Travel outlets, at sites including major UK airports London Heathrow, London Stansted, Manchester and Birmingham, which will deliver sales of about £60m a year, in a “fully recovered travel environment”.