22nd Jan 2014 08:32
LONDON (Alliance News) - WH Smith PLC Wednesday said it delivered a good profit performance in the 20-week period to January 18, as profit margins improved and costs were well managed across the business. But the retailer said total sales continue on a downward trend.
The stationer and bookseller said it is still keeping a tight lid on costs, which is helping improve its gross margin.
Total sales for the 20 week period were down 4%, as well as on a like-for-like basis.
It said total travel sales were up 2% in the period, with like-for-like sales still down 1%, but an improvement on the first 10 weeks of the year, thanks to a recent improvement in sales tends at its stores situated in airports.
"We saw further improvement in gross margin and our store opening programme continues to progress well, with further opportunities for growth identified in both the UK and internationally," the company said in a statement.
Sales from WH Smith's high-street stores continue to decline, both in total sales and on a like-for-like basis, with total sales down 7% in the period, and like-for-like sales down 6%, but the group said that it made good gross margin improvement and managed its costs for the division tightly.
The group said it remains highly cash generative with a strong balance sheet.
"Looking ahead, we continue to plan cautiously and manage the business tightly while investing in new opportunities for future growth. We are confident in making further progress in the year," said Chief Executive Officer Stephen Clarke in a statement.
Last week, WH Smith said that its signed a three-year extension to its transport management contract with Wincanton PLC.
Under the deal, Wincanton will optimise the efficient of WH Smith's vehicle and cut operating costs even further, with the contract covering its hubs in Swindon, Dunstable and Birmingham.
"With an increase in stores, currently 1,042 locations on high streets and at motorway services and airports, together with aggressive fuel inflation, we needed fresh ideas and innovation to create a step-change in the way we were utilising transport," David McKinlay, WH Smith's supply chain director, said last week in a statement about the contract.
The group is intending to release its interim results on April 10.
WH Smith shares were up 1.3% in early trading Wednesday, trading at 1,028.00 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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