Trading Update for the 14 Week Period to 4 June 2016
The latest results for WH Smith are only available to subscribers.
Six months ended 29 February 2016
• Group total sales up 4 per cent with like-for-like3 (LFL) sales up 2 per cent• Travel total sales up 11 per cent with LFL sales up 5 per cent• High Street total sales down 1 per cent with LFL sales flat• Gross margin improved by 50 basis points• Headline EPS of 57.4p, up 11 per cent on the prior year• Interim dividend of 13.4p, up 11 per cent on the prior year• Strong cash generation and balance sheet; free cash flow of £58m• Continue to deliver cost savings in High Street; £5m delivered in the first half and on target to deliver £4m planned cost savings identified for the second half
Total Group sales were up 4 per cent at £633m (2015: £611m) with Group LFL sales up 2 per cent. Group profit from trading operations increased by 7 per cent on the prior year to £88m (2015: £82m) and Headline Group profit before tax increased by 10 per cent to£80m (2015: £73m). High Street delivered a good performance in the half with trading profit up 6 per cent to £53m (2015: £50m) and continued high levels of cash generation. LFL sales were flat with total sales down 1 per cent, driven by the performance in the 5 weeks to 2 January 2016 when like-for-like sales were up 2 per cent. Cost saving target of £4m remains on target, making a total of £9m of cost savings in the year. As at 29 February 2016 High Street operated from 618 stores.Travel delivered a strong performance with LFL sales improving across all channels and trading profit increasing by 9 per cent to £35m (2015: £32m), which includes £3m (2015: £2m) from the growing international channel. Total sales were up 11 per cent compared to last year and up 5 per cent on a LFL basis, driven by the ongoing investment and an improvement in passenger numbers.
Stephen Clarke, Group Chief Executive said: "The Group has delivered a strong first half with both our Travel and High Street businesses performing well. "The Travel performance reflects our ongoing investment in the UK business and growing passenger numbers while internationally we have now secured over 200 stores, including our first airport shops in Spain and Germany. "In High Street, the flat like-for-like sales - our best performance for many years - were driven by a very strong performance of seasonal products over the key five week Christmas period. "Stationery sales were particularly strong, driven by investment in new product ranges and both our Stationery and Books business continue to benefit from strong sales in adult activity books, such as colour therapy, extreme dot-to-dot and querkles.”
20 weeks to 16 January 2016
• Travel revenueo Total sales up 12 per cento LFL sales up 5 per cent• High Street revenueo Total sales down -1 per cento LFL flat• Group Revenueo Total sales up 4 per cento LFL sales up 2 per cent
The Group delivered a good performance in the period with like-for-like sales up 2 per cent and total sales up 4 per cent for the 20 weeks to 16 January 2016. In Travel, like-for-like sales were up 5 per cent with total sales up 12 per cent. There was continued good trading across all of our key channels and gross margin continues to grow in line with plan. Management also claim that the UK and international store opening programme is on track. In High Street, like-for-like sales were flat with total sales down 1 per cent over the 20 weeks. Nevertheless, like-for-like sales were up 2 per cent over the 5 week Christmas period to 2 January 2016. Promotions across stationery, seasonal categories and continued good sales of 'colour therapy' in books helped support growth. Gross margin was up c.100bps and the cost efficiency programme remains on target.
Stephen Clarke, Group Chief Executive said: "The Group delivered a good performance over the 20 week period."In High Street, we had good like-for-like sales growth over the key Christmas period, driven by the 'colour therapy' phenomenon, our seasonal offer and strong promotions in stationery. In Travel, we continue to benefit from the impact of our growth initiatives and the improvement in passenger numbers. "As a result of the strong sales performance in High Street over the 5 week Christmas period, we expect profit growth for the year to be slightly ahead of plan. "This performance would not be possible without the hard work of all our colleagues across the business and I am grateful for their continued support. "Looking forward, profitable growth and cash generation will remain central to our plans allowing us to invest in new opportunities for the future."