(Sharecast News) - WH Smith reported a drop in full-year profit on Thursday, in line with expectations as it presses ahead with its transformation, but revenue rose, with growth in all regions.
In the year to the end of August, total group revenue was up 5% from the previous year at £1.6bn, with like-for-like growth of 2%. Revenue ticked up 4% in the UK, with hospitals delivering the strongest LFL performance. Revenue in North America and in the rest of the world and other rose 9% and 1%, respectively.
Headline profit before tax and non-underlying items declined to £76m from £108m, in line with company guidance, and impacted by UK contract renewals, inflation and macro headwinds.
WH Smith said that in the first 10 weeks of the current financial year, group LFL revenue was flat, with total constant currency revenue growth of 1%. This was in line with the retailer's expectations and reflects continued softer consumer demand due to global macroeconomic pressures and lower passenger volumes in North America.
Executive chair Leo Quinn said: "This last year, we have commenced a fundamental reset of the group. The capital raise supported by our shareholders strengthened the balance sheet. It also enabled us to launch a self-help programme focused on restructuring the cost base, improving cash generation and accelerating our store portfolio rationalisation to eliminate loss-making investments. Going forward, our decisions and capital allocation will be aligned with a rigorous assessment of returns.
"In parallel, we are working to provide the group with a foundation for sustainable, profitable growth, including investing in robust systems and governance processes to support successful execution. As we accelerate the pace, this must go hand in hand with building a high-performing retail culture that gives our people the confidence and accountability to make faster decisions and drive value.
"Whilst this is a complex programme, I am confident that delivering it will transform WH Smith over the medium-term into a group capable of generating attractive returns, with significant annual free cash flow."
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