The performance of its travel business remains a bright spot for WH Smith as the decline of the UK high street continues to weigh on its stores.
The UK retailer on Thursday signalled its confidence in the year ahead as it increased its interim dividend by 8 per cent to 17.2p for the six months to the end of February.
It reported results for the period that largely mirrored a January update, with increasing travel sales outweighing modest falls in its high street business, which it said had nonetheless seen its second best performance in the past decade.
Travel sales were £364m, up 18 per cent overall — with 10 per cent of this owing to its acquisition of US airport chain InMotion — and 3 per cent on a like for like basis, boosting profits for the division by 7 per cent to £44m.
The travel division is made up of over 400 stores in airports, train stations, motorway service stations and hospitals and typically feeds off “captive” customers who have few alternatives available to them.
Revenue in its high street business extended its decline slightly, falling to £331m during the period, down 1 per cent overall and 2 per cent on a like for like basis, which the group said was its second best performance in the past decade. Profits from the division were £48m, down 4 per cent, in line with expectations.
Stephen Clarke, WH Smith chief executive, hailed a “strong performance” from the company. He said ongoing investment in the UK and abroad had driven expansion in travel.
“High Street delivered one of our best trading performances in recent years, despite the widely reported challenges facing the UK high street,” he said.
“While there is uncertainty in the broader economic and political environment, we have made a good start to the second half of the financial year and the increase in the interim dividend by 8% reflects the board’s confidence in the outcome for the full year.”
Overall revenue was £695m, up 8 per cent overall and 1 per cent on a like for like basis, while headline pre-tax profit, stripping out underlying costs, for the six months was down 1 per cent at £82m.
