WH Smith eyes journey enlargement as excessive road income weakens additional

WH Smith is pushing ahead with its travel arm expansion and plans to open over 90 new shops in railway stations, airports and hospitals globally. 

Across the UK, the retailer opened 14 shops in the last year, but shut eight as it continues to tilt its portfolio towards travel hubs and away from its traditional high street presence/ 

The chain posted an underlying pre-tax profit of £166million for the year to 31 August, up from £143million the previous year. Group revenue rose 7 per cent to £1.9billion. 

Growth plans: WH Smith is pushing ahead with its travel arm expansion plans 

WH Smith saw its trading profit rise by 15 per cent across its travel arm during the period. 

Earnings remained flat at £32million across the group’s conventional bricks-and-mortar high-street stores, a mid a 2 per cent dip in like-for-like sales. Revenue across the retailer’s high-street shops slipped to £452million, down from £469million a year ago. 

WH Smith shares fell 4.38 per cent or 57.00p to 1,244.00p on Thursday. 

The retailer said it planned ‘a year of investment’ in its Funky Pigeon online greeting cards platform, with higher levels of spend on the platform and brand this year. 

WH Smith plans to open 90 new stores in the current year, with 60 in North America. 

It proposed a final dividend of 22.6p, making a total of 33.6p for the year, up from up 28.9p a year ago.

Carl Cowling, the group’s chief executive, said: ‘The Group has delivered an excellent performance throughout the year, particularly over the key summer trading period.

‘Our most exciting opportunity for growth is in North America. We are very pleased to have recently won some significant new airport business, including wins at Dallas, Denver and Washington Dulles airports, and we are the preferred bidder for a further 15 stores across two major US airports. 

‘Our store opening programme is on track and we have a new store pipeline of c.60 stores already won.’

He added: ‘The new financial year has started well. While there is some economic uncertainty, we are confident that 2025 will be another year of good progress for the Group.’ 

Russ Mould, investment director at AJ Bell, said: ‘Relatively modest growth in the key North American market and underlying earnings per share, as well as revenue a smidge below consensus expectations from WH Smith seems to have disappointed investors.

‘The full-year results were also a tad messy with fairly significant non-recurring costs, including impairments linked to software and supply chain upgrades and provisions for loss-making contracts, affecting the headline figures.’

He added: ‘Performance followed the same trend of the last decade, with the travel arm the engine of growth and the high street operation running to a standstill. There continues to be a focus on making efficiencies.

‘Selling travel essentials to captive audiences at airports and rail stations has been a highly lucrative activity for WH Smith, except during the pandemic, but today’s numbers are a reminder the company is not immune to a bit of turbulence along the way.’