WH Smith profits more than doubled thanks to a rebound in airport passenger numbers and the opening of new stores.
The FTSE 250 retailer reported a £45million pre-tax profit for the six months ending February, up from £18million the previous year and beating market expectations of £42.6million.
All travel divisions recorded a strong performance, which helped total sales climb by 41 per cent to £859million – just ahead of pre-pandemic levels.
Strong performance: WH Smith reported a £45million pre-tax profit for the six months ending February as it benefited from a relative lack of travel restrictions
UK revenues jumped by 66 per cent, primarily due to bumper trade at its airport outlets, including its tech-focused InMotion stores and large shops at London’s Gatwick and Heathrow airports.
Turnover in its rail channel was impacted by successive strikes, but still expanded by a quarter, while new store launches boosted revenue at its hospital-based outlets by about a third.
During the latest half-year period, it opened 62 extra retail sites, with just under half in North America and others in countries like Australia, Spain, Belgium and Malaysia.
This helped lift sales in the former region by 53 per cent and more than tripled them across the rest of the world.
Store openings form a core element of the Swindon-headquartered firm’s growth strategy. Over 120 sites are currently earmarked to open in its travel segment.
The bookseller anticipates the division will provide around 70 per cent of turnover, as well as about 85 per cent of earnings from trading operations by the end of this financial year.
Carl Cowling, WH Smith’s chief executive, said: ‘We have seen a strong performance in the first half of the year, further strengthening our confidence in the prospects of our global travel business.
‘Looking ahead, we are very well positioned to capitalise on the substantial growth drivers across our markets, and we expect to make further good progress in the years ahead.’
The company’s high street arm has long struggled with weak sales and profits amid years of underinvestment and online competition from the likes of Amazon.
Despite hefty demand for Prince Harry’s best-selling autobiography ‘Spare’ and healthy trade around Mother’s Day, the division’s revenues fell modestly.
‘Today, it’s clear that the Board views travel as the jewel in the crown,’ observed Julie Palmer, a partner at corporate restructuring specialist Begbies Traynor.’
She added: ‘For now, with the tourism industry still booming and the international expansion strategy storming ahead, it’s all rosy, and the high street business can plod along, but there may come a time when international travel is less appealing for cash-strapped consumers and more serious questions have to be asked of this division.’
WH Smith shares were 2.5 per cent lower at £15.83 on Thursday morning, although they have grown by approximately 43 per cent in the past three years.
