5th Jun 2024 12:37
(Alliance News) - WH Smith PLC's travel business continues to boom, analysts on Wednesday said, leaving the future of its flagging high street operation open to question.
On Wednesday, WH Smith said it remained confident of delivering full-year results in line with expectations as growth in its travel business offset a drop in sales at its high street stores.
Shares in WH Smith were up 1.6% to 1,161.00 pence per share in London on Wednesday.
In a trading update for the 13 weeks to June 1, the Swindon, England-based retailer said trading momentum has continued across its key markets with total Travel division revenue up 9% on a constant currency basis versus the prior year.
As a result, the group is on track for a full year in line with expectations.
WH Smith said its UK travel division continues to perform strongly. Sales in the 13 weeks are up 9% on last year. Total revenue was up 8% in Air, up 14% in Hospitals, and up 8% in Rail in the period.
Total revenue in the North American division was up 5% on last year on a constant currency basis. Like-for-like sales were flat with similar trends as reported at the company's interim results in April, WH Smith said.
Sales in the Rest of the World division are up 16% on last year on a constant currency basis as passenger numbers continue to improve across these markets, the company said.
But in the UK High Street division, total revenue, including online, was down 4%.
Looking ahead, WH Smith said it is well positioned entering the peak summer trading period.
"Good trading momentum continues across all three Travel divisions and we are in a strong position to capitalise on substantial growth opportunities across our markets," the company said.
Director of Consumer at Edison Group Russell Pointon said the update showed its "booming" travel business continues to perform strongly whilst the high street continues to decline.
Pointon felt it was reassuring to see the company on track to deliver full year expectations despite increasingly decreasing high street revenue.
He pointed out total travel revenue remained up 9% on last year, while UK High Street division was down 4%.
"Growth has slowed a little since the interim results but this reflects a very strong comparative from the prior year," he noted.
Pointon said this is in line with the interim results in April, where the retailer announced that the high street newsagent division is becoming a smaller part of the overall group.
"Looking forward, it seems WH Smith will focus on its Travel divisions to capitalise on growth opportunities and offset the high street struggles. It will be interesting to see if the business takes on a more decisive action on its high street business as the sector continues to struggle," he added.
By Jeremy Cutler, Alliance News reporter
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