WH Smith's Chairman resigns as profits rise

WH Smith on Thursday reported a five per cent rise in half-year pre-tax profit driven by strong performance of its travel division.

At the same time the books and stationary retailer announced the retirement of Chairman Walker Boyd. He will step down on August 31st and be succeeded by Henry Staunton who is the Senior Independent Director. Drummond Hall will take over from Staunton.

Boyd said he felt "the end of the current financial year would be a good time to hand over to a new Chairman".

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The retailer posted profit before tax of £69m in the six months ended February 28th, up from £66m the year earlier, but fell slightly short of the £70m predicted by analysts at Deutsche Bank.

The group raised its interim dividend by 13% to 9.4p as earnings per share rose 11% to 44.2p. Gross margin improved by 160 basis points.

Results were boosted by trading profits of travel which grew 7.0% to £29m as further progress was made in the division's international channel with 121 stores open and a further 30 kiosks in China.

The travel business operates 619 stores, mainly in airports, railway stations, motorway service areas, hospitals and workplaces, primarily in the UK. It sells mainly a range of reading materials, food and drinks for people on their journey.

The High Street arm, which sells stationary, books and news, saw profits rise 2.0% to £48m as the group delivered cost savings of £9.0m.

"Both businesses continue to increase profit year on year, despite the challenging economic environment," said Group Chief Executive Kate Swann.

"The group remains highly cash generative enabling us to invest in our businesses and in new opportunities, whilst returning cash to shareholders. So far this financial year, we have returned £28m to shareholders through the share buyback announced in August 2012.

"We expect the trading environment to remain challenging however the business is in good shape and is well positioned for continued growth in both the UK and internationally."

RD