Bookseller and general retailer WH Smith saw like-for-like (LFL) and total sales fall in both its main divisions in the six months to the end of February but profits were up.
The group has traditionally made most of its money over this period, which includes Christmas, but today's update makes clear a rebalancing is underway, with a third of profits now expected over the next six months.
Total sales were £665m (2011: £686m) with LFL sales down 5%.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
WH Smith divides its business into Travel and High Street, with Travel stores providing a smaller offering at places like airports, train and motorway service stations. The High Street division operates around 600 bigger stores with a broader offering than their Travel counterparts.
Travel sales to the end of February grew by 2% to £217m, down 3% on a LFL basis. High Street sales were down 5% at £448m and down 6% on a LFL basis.
Total profits before tax came in at £66m versus the £64m achieved in the same period of last year, while the interim dividend has been boosted by 15% to 8.3p per share.
WH Smith is aggressively expanding its international Travel stores, with 20 new units announced today, bringing the total network to 80 outlets. Over the six months to the end of February 18 new UK Travel stores were opened bringing the total to 586 units.
In the High Street division WH Smith is reducing its entertainment offering in response to multiple online competitors and trying to cut costs to boost margins. Operating profit in the six months to the end of February was £47m, the same as the equivalent period of 2011.
Clearly WH Smith are content with this performance because the boss of the High Street division, Stephen Clarke, has been promoted to an Executive Director position on the main board.
Commenting on the results Kate Swann, group Chief Executive said: "The group remains cash generative enabling us to invest in our businesses and new opportunities, whilst also returning cash to shareholders. We have returned £33m to shareholders through the share buyback announced in August 2011 and we have today increased the interim dividend by 15%.
"Looking ahead, we expect the trading environment to be challenging, however we are a resilient business with a consistent record of both profit growth and cash generation and we have opportunities for growth in the UK and internationally."
WH Smith shares had fallen 1.74% by 08:14.
BS
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
