16th Oct 2014 07:17
LONDON (Alliance News) - WH Smith PLC Thursday said its pretax profit rose in its last financial year, despite another fall in revenue, as the company continued to cut costs and it increased trading profits in both its businesses.
The stationer and bookseller declared a 14% increase in its total dividend for the year to 35.0 pence per share, and also announced an additional share buyback of up to GBP50 million, after posting a 9% increase in its pretax profit to GBP112 million for the year ended August 31, compared with a GBP103 million profit the prior year.
"Looking ahead, our focus will remain on profitable growth, cash generation and investing in new opportunities that position us well for the future," said Chief Executive Stephen Clarke in a statement.
WH Smith shares were the best performing stock on the FTSE 250 at the market open Thursday, up 4.8% at 1,043.00 pence.
Revenue for the year fell 2% to GBP1.16 billion, down from GBP1.19 billion a year earlier, and was also down 3% on a like-for-like basis, dragged down by its high street stores. However, the sales decline was a marked improvement on the 5% decline its reported the prior year.
WH Smith, which operates stores predominantly on the high street and in airports and train stations, has been busy reining in its costs to help improve its gross margins, and has been focusing on expanding its international travel business, while stripping out costs in its high street business to help stem the decline of sales in that unit.
The company said its gross margin improved by 160 basis points in the year.
It said its travel arm continued to perform well, with sales up 4% and flat on a like-for-like basis, compared to last year, when its said total sales were flat and like-for-likes were down 4%.
"We continue to invest in the business and we opened 30 new units in the UK during the year... and won a further 30 units in our international channel," the company said.
WH Smith now has a total of 596 units in the UK and 165 units internationally.
Its high street business, where it is really focusing on cutting costs, reported a 6% decline in total sales, and were down 5% on a like-for-like basis, marginally better than the prior year's declines.
The retail chain said it has increased its target cost savings for its high street business to GBP21 million over the next three years.
"The distinct strategies for each of our businesses continue to deliver good profit growth. We had another record year in Travel.... In our High Street business, profits increased... demonstrating the continued success of our profit focused strategy," said Clarke.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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