WH Smith anticipates ‘another year of significant growth’ after 2023 profits were boosted by resilient travel demand.
Turnover in the retailer’s global travel division grew by 16 per cent on a constant currency basis for the 20 weeks ending 20 January, with UK travel sales up 15 per cent.
WH Smith on Friday attributed the bounce to the continued rebound in airport passenger numbers amid an absence of Covid-related restrictions, as well as good performances at rail and hospital stores.
Strategic move: WH Smith has gradually shifted away from the high street in recent years in order to expand its presence overseas and in travel hubs
Rising airline passenger levels also boosted the company’s North American travel revenues by 14 per cent, with a further uplift provided by good like-for-like growth across the rest of the world.
This offset declining trade at its British high street segment, where sales dropped by 4 per cent despite modest growth in store purchases over the four weeks ending 30 December.
As a result, WH Smith, which has about 1,400 shops and owns online greeting card brand FunkyPigeon, lifted its total revenue by 9 per cent.
‘We have made a good start to the financial year and, while there is some economic uncertainty, we are confident of another year of significant growth in 2024,’ the group told investors.
The Swindon-based firm has gradually shifted away from the high street in recent years in order to expand its presence overseas and in travel hubs.
Last year, chief executive Carl Cowling said the company has no plans to open any more outlets on high streets because they would just be a ‘duplication’ of their current stores.
WH Smith intends to open more than 110 travel shops this year, including 50 across North America and 15 in the UK.
It recently opened its largest British-based travel store, totalling 6,000 square feet in size, at Birmingham Airport and the first of six establishments at Budapest Airport.
Russ Mould, investment director at AJ Bell, remarked: ‘The high street business is essentially the cash machine which provides strong support for the group to expand and pay dividends to shareholders.
‘The stores are not shiny and new, little money seems to be spent on refurbishments, and it appears to run on a skeleton crew as it cuts costs to the bone.
Yet he added: ‘For as long as people are buying the odd magazine, paperbacks, stationery, wrapping paper or board game, WH Smith’s high street shops stand a good chance of survival.’
WH Smith shares were 2.3 per cent lower at £12.04 on early Friday afternoon and have declined by approximately 23 per cent over the past 12 months.
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