31st Jan 2008 07:01
WH Smith PLC31 January 2008 31 January 2008 WH SMITH PLC CHRISTMAS TRADING STATEMENT AND RETURN OF CASH TO SHAREHOLDERS Continued improvement in profitability, in line with expectations WH Smith PLC is today providing an update on its trading performance for the 10weeks and the 21 weeks to 26 January 2008 and announcing its intention to return£90m cash to shareholders, subject to shareholder approval. Christmas Trading In a competitive period on the High Street, we continue to deliver our strategyto improve profitability and to rebalance the mix of our business towards ourcore categories. We have increased our gross margins in line with expectations.We are pleased with progress made in the Travel business and continue to focuson new growth opportunities. For the 21 weeks, Group total sales were up 1% with like for like (LFL) salesdown 2%. In our High Street division, LFL sales for the 10 and 21 weeks were down 3% and3% respectively, reflecting our ongoing strategy to rebalance the mix of ourbusiness in this division. Gross margin continued to improve year on year. Wecontinue to focus successfully on cost control. The Travel division delivered total sales up 13% and like for like (LFL) salesup 1% for the 21 weeks (excluding tobacco, like for like sales were up 3%)accompanied by a further improvement in underlying gross margin. Return of Cash to Shareholders In the Preliminary Results statement on 11 October 2007 we announced that afterthe key Christmas trading period we would review the Company's capitalresources, having regard to the current and potential future requirements of thebusiness. That review has now been completed and the Board today announcesproposals to return £90m of cash to shareholders. The return of £90m of cash to shareholders will comprise two elements. Aninitial return of £60m (equivalent to 33p per share) will be made by way ofSpecial Dividend, combined with a share consolidation, and it is our intentionto return the balance of £30m by way of an on market share buyback programme,implemented over the course of the next year, taking into account marketconditions. Our dividend policy remains the same: over time we would aim fordividends to be covered twice by normally taxed earnings. The share consolidation, which will be in the ratio 67 New Ordinary Shares forevery 74 Existing Ordinary Shares, is intended to preserve comparability, so faras possible, of the company's share price and earnings and dividend per sharebefore and after payment of the Special Dividend. The Special Dividend and 67 for 74 share consolidation requires the approval ofshareholders at an Extraordinary General Meeting which will be held on 20February 2008, the notice of which is expected to be posted to shareholderstoday. It is expected that WH Smith shares will be marked ex the specialdividend on 22 February 2008 and the dividend will be paid on 29 February 2008to shareholders on the share register on 21 February 2008. Full details of thespecial dividend and share consolidation, together with the requisiteresolutions and notice of the EGM, will be set out in the circular to WH SmithPLC shareholders. Commenting on today's announcement, Kate Swann, Group Chief Executive said: "As we anticipated, trading conditions on the high street were competitive overthe Christmas period. In this environment, we continued our strategy torebalance the mix of our business towards our core categories and increased ourgross margins as a result. We are pleased with the continued progress in ourTravel business and we will continue to focus on growth opportunities in thecoming year. "Looking ahead, we remain cautious about consumer spending in our markets andour plans reflect this. "The cash return to shareholders reflects our confidence in the cash generativenature of our business and our commitment to maintain an appropriate capitalstructure. We continue to invest in the business where we believe we will createvalue for shareholders." - ENDS - Enquiries: WH Smith PLCSue Barratt Media Relations 020 7851 8850Mark Boyle Investor Relations 020 7851 8820 BrunswickTom Buchanan 020 7404 5959 Advance Notice of Results WH Smith PLC will announce its Interim Results 2008 on Thursday 17 April 2008. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Wh Smith