10th Oct 2013 08:32
LONDON (Alliance News) - WH Smith PLC Thursday reported a slight dip in sales for the year ended August 31, but rising profits, due to tight cost savings and business wins in the UK and internationally.
The stationer and bookseller declared a final dividend of 21.3 pence, up 15% on the prior year, bringing the full-year dividend to 30.7 pence per share, a 14% rise.
The retailer reported a 6% rise in its full-year pretax profit, to GBP108 million, from GBP102 million a year earlier, boosted by a strong performance from its travel division and new store openings.
Stephen Clarke told Alliance News in a wires call, that there is significant scope to open new stores in its UK travel division, but expects stronger medium-term growth from the business, when travel passenger numbers return to its historic highs.
WH Smith reported revenues of GBP1.18 billion for the year, down slightly from GBP1.24 billion in revenue a year earlier. It said that total sales on a like-for-like basis were down 5%.
It said that total sales from its travel division, which is situation in airports and stations, were flat for the year, and down 4% on a like-for-like basis.
WH Smith said that its travel division is making good progress internationally, with 40 new units won this year, bringing the total to 141 units now either open or won. It said that during the year, it renewed a contract for its first international units in Copenhagen Airport. Stephen Clarke said that going forward it expects to open around 30 to 40 units a year.
The retailer also said that it continues to invest in its travel business in the UK, opening 30 new units during the year in airports, railways stations, hospitals and a motorway service area.
There are now 579 units in the UK. It said that it expects to open a similar number of units in the year ahead, including units in the new Terminal 2 at Heathrow and with franchise partner Marks & Spencer in hospitals.
It said that total travel sales were flat in the year, with like-for-like sales down by 4%. However, it said that its trading profit from the business rose 5% to GBP66 million, from GBP63 million a year earlier, driven by a further improvement in its gross margin and good cost control.
WH Smith said that sales from its high street stores continued to decline, down 6% on a like-for-like basis, hampered by a tough comparative year when there was a strong publishing schedule with the release of top-selling titles, including '50 Shades of Grey', and 'The Hunger Games.'
It reported a 4% increase in its high street trading profit, to GBP56 million, from GBP54 million a year earlier. It said this was largely due to its focus on optimising margins, controlling costs and delivering the retailing basics.
The retailer said that it has renewed its contract with Post Office Limited by another five years, to operate the existing 82 post office branches in its stores. It also said that it has signed a new contract with the business, to open a further 16 post office branches.
WH Smith said that its capital expenditure for the year was GBP38 million, as it continues to invest in the overall business, including investments in new stores in both divisions, and ongoing investment in technology, such as installing new tills in its high street stores.
It said that it has managed another GBP10 million in new costs savings, which brings its target cost savings in its high street division to GBP22 million over the next three years.
Stephen Clarke told journalists that the added savings were driven by new technology and changes to its distribution supply chain, rather than increases on the customer. Clarke said that it will continue with its strategy of optimising sales from its current high street stores, rather than opening new ones. During the year, WH Smith opened four new stores, and closed seven of them.
Shares in WH Smith were up almost 7% Thursday morning, trading at 893.00 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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