WH Smith has announced its full year results highlighting a pre-tax profits increase of 4% to £145m – a stark contrast to many high street chains which have reported struggles.
In the financial year ending August 2018, WH Smith’s group revenue increased 2% to £1.26bn, up from £1.23bn in 2017.
That growth was again driven by its travel business, which saw an 8% growth, while high street losses led to a 3% decrease year-on-year.
In a statement, WH Smith group chief executive Stephen Clarke said: “We had a good year in High Street despite the well documented challenges of the UK high street. During an encouraging second half, the business traded well and we quickly identified the latest trend in the market, becoming a one-stop-shop for all slime related products.”
“Despite this good performance, we are not ignoring the broader challenges on the UK high street and, during the second half, we conducted a business review to ensure our High Street business is fit for purpose now and for the future.”
“While there is some uncertainty in the economic environment, we are pleased with the start to the new year in both businesses, and will continue to focus on profitable growth, cash generation and new opportunities to profitably invest for the future. We are well positioned for the current year and beyond.”
Analysis: George Salmon, Equity Analyst at Hargreaves Lansdown
WH Smith is a rare beast among the UK high street names in that it’s delivering continued underlying profit growth. But that performance masks the fact Smith’s High Street division is facing some pretty tough challenges. Sales continue to slide, and 6 stores are due to close.
However, there are two reasons investors can be optimistic. Cost control has been impressive in those High Street outlets, and the Travel business continues to deliver impressive results. The group’s outlets in railways and train stations now account for around two thirds of profit.
The Travel business is attractive because it’s often one of only a handful of outlets available where consumers can grab a bite to eat, or something to read. This has proven a winning formula for sales and profit growth, and with plenty of blank space on the map, Smith’s Travel business should remain an attractive roll-out story.