22nd Jan 2020 08:14
(Alliance News) - WH Smith PLC on Wednesday reported a "good" recent performance with the company on track to meet annual performance expectations.
The FTSE 250 retailer delivered revenue growth of 7% in the 20 weeks to January 18, with like-for-like revenue falling by 1%.
The High Street business's revenue fell by 5% on both a reported and like-for-like basis. Gross margin was ahead of plan, however, and WH Smith has identified further cost savings of GBP3 million, meaning savings in its year ending August will be GBP12 million.
Swindon-headquartered WH Smith achieved 19% revenue growth in the Travel business, which was driven by the acquisitions of Marshall Retail Group and InMotion. MRG was bought in October for GBP312 million, with InMotion purchased a year earlier for USD198 million.
MRG operates retail stores in North America, including in airports, while travel retailer InMotion is also US-based. WH Smith Travel now has over 600 stores outside of the UK, meaning there are more Travel stores overseas than in the UK.
"The store opening programme for MRG remains on track and integration into the WH Smith group is progressing well," said WH Smith on Wednesday.
"Since announcing our intention to acquire the business on October 17, we have won a further eight units in the US, which include MRG, WH Smith and InMotion branded stores, demonstrating the growth opportunities we see for the group in the US."
Excluding these two purchases, WH Smith achieved 5% revenue growth in Travel in the period. Overall like-for-like revenue growth was 3%.
WH Smith's UK Travel unit delivered "good" sales growth and the gross margin was in line with plans.
Chief Executive Carl Cowling said: "We are pleased with the progress the group has made in the first 20 weeks, with total revenue up 7%.
"During the period, we completed the acquisition of MRG ahead of plan and integration into the group is progressing well. This acquisition is in line with our strategic focus to grow Travel, almost doubles the size of our international travel business and accelerates growth in the US, the world's largest travel retail market.
"In UK Travel, we have seen continued growth across all our key channels and we are on track to open a new flagship pharmacy format at Heathrow Terminal 2 this summer. Our High Street strategy continues to deliver through continued gross margin gains and tight cost control," Cowling continued.
"Looking ahead, we are on track for the current year and as we continue to grow our share of the global travel retail market, the group is well positioned for the years ahead."
Shares were 1.5% lower in early trade in London on Wednesday at 2,502.00 pence each.
By George Collard; [email protected]
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