WH Smith demonstrates resilience

14th Apr 2011 07:22

Interim results from newsagent WH Smith were in line with expectations, with like for like sales (LFL) down 6% on the high street and 3% lower in the group's travel outlets.Group total sales in the six months ended 28 February were down 4% on a year earlier, with LFL sales down 5%. High street sales were down 6%, with LFL sales, excluding Entertainment, 3% down on a year earlier.Profit before tax edged up to £64m from £62m the year before, despite the fall in group revenue to £686m from £716m. Gross margin improved by 1.7 percentage points year on year. The business remains extremely cash generative. At the end of the reporting period WH Smith had net cash of £70m, and felt able to bump up the interim dividend by 18% to 7.2p."During the first half we have returned £27m to shareholders through the share buyback and increased the interim dividend by 18%, demonstrating the board's confidence in the future prospects of the group and its continued cash generative nature," said group chief executive, Kate Swann."In Travel we have grown profit by 9%, demonstrating the strength of the business model. We are encouraged by the performance of our international units and now have a total of 40 units either opened or planned," Swann added. ---jh