A return to profit for WH Smith’s high street stores has helped to offset heavy losses at airports and train stations.
Pre-tax losses more than halved from £280million in 2020 to £116million in the year to 31 August, thanks to a profit of £36million from WH Smith’s high street stores. They lost £4million last year as Covid-19 restrictions shut down trade.
The group’s North American business was the only other division to see profits this year as ‘significant new business wins at major US airports’ added £2million, compared to a £14million 2020 pre-tax loss.
High street stores were a key driver of performance in the year to 31 August
Losses before tax of £44million, up from £27million, within WH Smith’s travel business contributed much of the decline.
However, the group told investors that it had seen a ‘good start to the financial year’ and the business is ‘well positioned to return to meaningful profit in 2020’.
It highlighted ‘improving trends’ in travel over recent months with total, as well as plans to focus on customer conversion, increasing average transaction value, category development and cost management.
WH Smith said it was in a strong position to benefit from growth opportunities, with the retailer planning 100 new travel-based stores over the next three years, 58 of which will be in North America
In September the group issued a mild profit warning due to uncertainty over the travel sector and accounting finance charges linked to a bond issue.
WH Smith shares were down 1 per cent in early trading to 1,629.5p, but remain up 7.3 per cent year-to-date.
Group chief executive Carl Cowling said: ‘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.
‘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.
‘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.’
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