Focus on profits pays of for WH Smith

Book, stationery and news retailer WH Smith posted its preliminary results for the year to 31 August on Thursday, with group profit before tax up 8% to £131m and diluted earnings per share 10% higher at 93.9p.

The FTSE 250 company said its travel trading division turned a profit of £87m, up 9% on 2015, while its high street operations posted a trading profit of £62m, up 5%.

Group profit from trading operations was £149m, a 7% improvement.

The company reported a 10% overall increase in travel revenue, or 4% on a like-for-like basis, while its high street revenue was down 3%, or 2% on like-for-like terms.

Headline group profit before tax was £132m, up 7%, with headline diluted earnings per share increasing 9% to 94.8p.

WH Smith’s dividend per share for the year was 43.9p, up 11% on the 39.4p posted in 2015.

“We have delivered a good performance across the group with earnings up 10%,” said group chief executive Stephen Clarke.

“Our travel business continues to perform well with strong sales across all channels and profit up 9%.

“We have further extended our food to go ranges and during the year we sold over ten million 'meal deals'.”

Clarke said internationally, the company has “won” a further 32 stores in the year, giving it a total of 232 stores won across 25 countries.

“In the high street business, our profit-focused strategy continues to deliver sustainable growth with profit up 5%.

“Stationery sales have been strong in the year and in books we are delighted with the success of the Zoella Book Club which launched during the summer,” Clarke explained.

He confirmed the board’s proposal for a 12% increase in the final dividend, as well as a further share buyback of up to £50m, reflecting the group's strong cash flow and its positive outlook for the future.

“This performance is only possible through the ongoing hard work and commitment of our 14,000 colleagues across the business and I am grateful for their continued support.

“Looking ahead, we will continue to focus on profitable growth, cash generation and investing in new opportunities,” Clarke said.

“While the economic environment is uncertain, we are well positioned for the current year and beyond.”