Travel business boosts WH Smith revenues

Retailer WH Smith reported a strong performance on Wednesday, "significantly ahead" of last year as the travel business picked up.

In an update for the 20 weeks to 14 January, the company said it delivered a solid performance, with total group revenue up 41% on the year and 20% versus 2019.

WH Smith pointed to continued momentum across its global travel business since the start of the financial year, resulting in sales being up 48% on 2019 and 77% higher versus 2022. This is despite passenger numbers remaining well below 2019 levels, it said.

Meanwhile, the UK High Street division delivered a good performance, it said, in line with its expectations.

"We had a strong start to the year and, while there is economic uncertainty, passenger numbers globally continue to improve and this, combined with the strength of the group's growth opportunities, means that we are confident of a year of significant progress in 2023," the company said.

Russ Mould, investment director at AJ Bell, said: "WH Smith is slowly returning to its usual pattern of trading before the pandemic and that’s largely good news for shareholders.

"The return of travellers to stations and airports has helped provide the captive audience for the company’s outlets selling stationery, electronics goods, snacks and drinks.

"People being more willing to jet off on holiday has led to busier airports and the company’s competitive position has arguably been strengthened as rival operators proved less durable through Covid. Though the fine print in these latest figures suggest rail strikes have impacted on WH Smith’s sales in this part of the operation.

"For years the UK high street operation has been something of an afterthought, run as efficiently as possible with a firm control on costs. This may see WH Smith stores regularly rank near the bottom in customer surveys, but the business has generated useful cash flow to help with the running of the business and investment in the faster growing travel operation.

"At some point a debate over the role of the high street arm in the wider group may start to heat up and investors may look for a sale or spin-off of a business which has very different growth prospects."