10th Apr 2014 08:58
LONDON (Alliance News) - WH Smith PLC Thursday raised its interim dividend by 15%, as it grew profits in the first half of its financial year despite a continued decline in high-street sales.
The retailer said profit margins improved as it continued to keep a tight lid on costs across the business, while sales in airports and train stations increased.
WH Smith increased its interim dividend by 15% to 10.8 pence per share. It said its remains highly cash generative, and during the first half returned a total of GBP47 million to its shareholders, through a dividend and share buyback.
The stationer and bookseller chain, 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, which it said improved by 190 basis points in the first half of the year.
For the six months to February 28, it reported a pretax profit of GBP69 million, up 3.0% from GBP67 million a year earlier.
Total sales for the group were down 3.9% in the first half to GBP613 million, compared with GBP638 million the prior year, and were also down 4% on a like-for-like basis, dragged down by its high-street stores.
Sales from WH Smith's high-street stores continue to decline, both in total sales and on a like-for-like basis. In the first half of the year high street sales were down 7%, and declined 6% on a like-for-like basis.
Total travel sales, on the other hand, were up 2% in the first half, with like-for like sales still down 1%, supported by a recent improvement in UK air passenger numbers and sales trends at WH Smith stores situated in airports.
WH Smith has been focusing on expanding its international travel business, while stripping out costs in its high street business to help offset depressing sales.
"High street delivered cost savings of GBP9 million in the half, with a further GBP5 million identified for the second half. We are on track for GBP14 million of costs savings for the full year," the company said.
It said that it continues to invest in its travel business and is on track to open 30 new units in the UK this year, including units at the new Heathrow Terminal 2.
"In our international channel we now have 118 units open with a further 38 yet to open, giving us a total of 156 units," the company added.
It said it has new units in Bali, Shanghai, and additional stores in Russia.
WH Smith said it spent GBP19 million in capital expenditure in the first half of the year.
WH Smith shares were up 2.5% Thursday morning at 1,199.00 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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