WH Smith FY profit rises as travel business overtakes high street

WH Smith reported a rise in full-year profit and revenue on Thursday as a solid performance from its travel business helped to offset weakness in high street stores.

In the year to 31 August, pre-tax profit was up 7% to £140m on total group revenue of £1.2bn, up 2%, although like-for-like revenue was flat.

The travel division delivered a strong performance across all channels, with trading profit up 10% to £96m versus a flat performance in High Street, where profit was unchanged at £62m. Travel revenue rose 9% in total and 4% on a LFL basis, while total High Street revenue was down 5% and 4% lower on a LFL basis.

WH Smith said the travel business is now the largest part of the group in both revenue and profit.

The final dividend was lifted 10% from last year to 33.6p per share, giving a total dividend per share of 48.2p, up 10%. In addition, it announced a further share buyback of up to £50m, which it said reflected its cash generation and confidence in the future prospects of the group.

Chief executive Stephen Clarke said: "This performance is only possible through the hard work and commitment of our 14,000 colleagues across the business and I am grateful for their continued support.

"Looking ahead, we will focus on profitable growth, cash generation and new opportunities to profitably invest in the future. While the economic environment remains uncertain, we are well positioned for the current year and beyond."

Investec said this was a "strong" set of FY17 results demonstrating the changing nature of WH Smith as travel increasingly becomes the focus of the business and its long-term international ambitions.

It said WH Smith remains "a highly cash generative, well-managed business" that is increasingly becoming a play on the structurally growing global travel market. "With the shares having performed strongly into results, they may drift short-term. We reiterate our buy."

At 1140 BST, the shares were up 0.1% to 2,073p.