Strong fourth quarter boosts WH Smith

WH Smith reiterated its full-year outlook and unveiled a £50m share buyback on Wednesday, sending shares soaring in early trading, after a buoyant fourth quarter.

The retailer said group sales rose 6% in the three months to 31 August, which includes its peak summer trading period, or by 4% on a like-for-like basis.

Within that, its core UK travel division saw underlying sales jump 8%, boosted by increased passenger numbers in airports and train stations.

WH Smith said trading had further benefited from broadened categories and ranges, most notably in food and drink, health and beauty, and technology.

Travel sales also performed well overseas, ticking up 1% in North America and 7% in the rest of the world, both on an underlying basis.

The strong performance helped offset an expected 3% like-for-like decline in high street sales.

As a result, WH Smith said full-year results were on track to meet forecasts.

As at 0845 BST, shares in the FTSE 250 firm had put on 11% at 1,365.33p.

The chain also announced a £50m share buyback, and pledged to return surplus cash to investors, in line with its capital allocation policy.

Carl Cowling, chief executive, said: "We have ended the financial year in a strong position, delivering a performance in line with our expectations with good growth across our travel businesses.

"We are also announcing a £50m share buyback, which reflects strong ongoing cash flow, the receipt of the pension fund buyout cash return [and] the strength of our balance sheet, with leverage now within our target range."

WH Smith received £85m after the buyout of its pension scheme two years ago completed.

The retailer is due to post full-year numbers on 14 November.