Profits up but LFL sales down at WH Smith

13th Oct 2011 07:25

Newsagent WH Smith has seen like-for-like (LFL) sales drop 5% in the year to the end of August. Travel - outlets at airports, stations and bus depots - fell 3% on a LFL basis while high street sales were down 6% LFL.Total sales, which includes stores that were not open in the previous year, were down around 3% at £1,273m (2010: £1,312m).Although most retail investors tend to identify like-for-like sales comparisons as the most important metric WH Smith is keen to emphasise profits, not least because they are on an upward path.Group profit from trading was up 5% to £108m with the Travel division contributing £57m. High Street operating profit was up 2% to £52m.Gross margins across the group improved 150 basis points (bps) - or one-and-a-half percentage points, with the high street operations improving by 160 bps and Travel by 140 basis points.The final dividend of 15.3p is up 15% on the previous year's payment, and takes the full-year pay-out to 22.5p, up 16% on the prior year. Commenting on the results the Chief Executive Kate Swann said:"We have seen another year of strong cash generation from both businesses and this is reflected in a 16% increase in the full year dividend and a further return of cash to shareholders [through the company's share buy-back programme].The economic conditions remain challenging, however, we have planned accordingly. We are a resilient business with a strong and consistent record of both profit growth and cash generation and have opportunities for growth in both the UK and internationally."BS