12th Mar 2020 08:27
(Alliance News) - WH Smith PLC said Thursday it expects profit and revenue for its 2020 financial year to take a hit as the coronavirus outbreak threatens to hurt the group's second half performance.
Shares in the FTSE 250 retailer were 17% lower at 1,315.75 pence on Thursday in London.
WH Smith said for its year ending August 31, underlying pretax profit is expected be knocked by between GBP30 million and GBP40 million, while the negative impact on revenue is expected in the range of GBP100 million to GBP130 million.
For financial 2019, WH Smith reported an underlying pretax profit of GBP155 million, on revenue of GBP1.40 billion.
For the first half ended February 28, the group said total revenue was up 7%, but like-for-like revenue was down 1%.
Segmentally, the Travel business rose by 19%, however revenue from High Street was 5% lower. As a result, underlying pretax profit for the first half will be in line with market expectations.
However, WH Smith said it has been monitoring the financial impact of covid-19 and found Travel's Asia Pacific unit, which accounts for 5% of the segment's revenue, has significantly struggled since February.
In addition, over the last two weeks, WH Smith also experienced a reduction in passenger numbers at airports in the UK, US, and Europe. The UK accounts for 60% of Travel's revenue, and the US 25%.
As a result, UK Travel's revenue for the second half is expected to be 15% lower than expectations, while the US is set to be 20% under company expectations.
As for its High Street division, WH Smith said it has not seen a significant impact, but recognised that covid-19 could lead to reduced high street footfall.
By Dayo Laniyan; [email protected]
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