Profits up at WH Smith
British retailer WH Smith reported a sharp jump in half-year profits today after benefiting from efforts to turn around the ailing high street business.
The group, which has 667 retail outlets as well as a news distribution arm, said its recovery remained on track despite tough trading conditions.
The improvement was shown in underlying profits of £70m (€102.5m) in the six months to February 28, up 32% on a year earlier and reflecting a 31% boost in earnings at the company’s core high street retail business.
Chief executive Kate Swann said there was a long way to go in the recovery but believed that customers were starting to notice the difference in the stores.
She said: “We have improved the business’s profitability by being more efficient, increasing product choice, improving availability and store standards. Customer response to these changes has been positive.”
The recovery plan was launched last year as WH Smith came to terms with annual losses of £135m (€197.6m) and an “unacceptable performance” by its stores.
Fierce competition from supermarkets and internet retailers for its core sales of books, records and DVDs have hit sales hard as the retailer struggled to hold its once-dominant market position.
In today’s results, losses of £72m (€105.4m) last year became profits of £61m (€89.3m) as the group’s performance benefited from a drive to improve efficiency, including through a three-year plan to achieve cost savings of £30m (€43.9m).
Total sales from continuing operations were flat at £1.4bn (€2bn), with the like-for-like figure at high street stores down 3% in a tough trading climate.
WH Smith said the first seven weeks of the second half of the financial year had shown an improvement, with flat like-for-like sales from the retail arm, which includes 125 stores at airport and station locations.
Ms Swann added: “Trading conditions are tough – however, we remain confident in the outcome for the full year.”
