WH Smith Xmas numbers 'unlikely to make pretty reading' amid lockdowns
The firm plunged £226 million into the red in November as the pandemic forced the temporary closure of hundreds of stores and hammered its travel sites in airports and railway stations.
The retailer – one of Britain’s oldest, tracing its roots back to 1792 – lost £226m before tax at the bottom line in the 12 months to the end of August, compared with a £135m profit a year earlier. Underlying pre-tax losses were £69m, slightly less than analysts had been forecasting.
Revenue was down 33 per cent to just over £1 billion, after a strong start to the year was interrupted by the virus.
A Christmas update, due for later this week, will lay bare the full effect of continued closures during what should have been the busiest trading period of the year.
Susannah Streeter, senior investment and markets analyst at financial services firm Hargreaves Lansdown, said: “This trading update from WH Smith is unlikely to make pretty reading given hundreds of its stores were once again forced to close smack-bang in the middle of the crucial Christmas shopping period.
“The fresh lockdowns following spikes of Covid-19 cases caused by a more infectious strain in London and the south east would have been another bitter blow for the group which was already facing an uphill struggle.
“The company had become highly reliant on its convenience shops dotted across the transport network. But this captive market where shoppers made impulse purchases all but evaporated during the pandemic.
“Vaccine roll outs will have come with a sigh of relief for the company, offering some light at the end of a very dark tunnel.
“But with the [latest] lockdown that tunnel has become even longer and the company will no doubt be continuing negotiations with landlords to extend payment terms and reduce rents to help it survive the crisis.”
In November, bosses at WH Smith pointed to some signs of encouragement at the UK group’s North American business.