WH Smith investors receive first dividend in three years after sales jump | WH Smith

WH Smith will pay a dividend for the first time in three years as it expects a strong Christmas after a return to overseas holidays helped the stationery book retailer return to black.

The company posted a profit of £63m in the year to August, following a loss of £116m a year earlier, as sales rose 58% to 1, £4 billion.

Sales at travel and hospital outlets jumped 131%, including a 167% increase in the UK, as airport footfall rebounded, with only train station branches still lagging behind pre-pandemic levels.

The group has also opened 98 stores in airports and train stations around the world. The strong performance in travel offset a nearly 2.5% decline in sales at downtown stores, where the company closed 17 outlets.

Carl Cowling, chief executive of WH Smith, said the company would pay a dividend in January for the first time since 2020 as he expected to see a further increase in sales over Christmas as more people travel .

He said WH Smith was also well prepared for a return to high street shopping in the UK, having bought into stock a few months earlier than usual to avoid a repeat of supply chain hiccups from the UK. ‘last year. “The last thing we wanted was for the Christmas cards to come in January,” he said.

Group sales are up 48% from pre-pandemic levels, although the high street division is still down 13% from 2019, in the 10 weeks to November 5, partly due to a £19 million drop in sales on the band’s Funky Pigeon website. , which suffered a cyberattack in April.

The group said it was in negotiations with the owners of 150 of its 527 stores and another 300 leases were up for renewal over the next three years.

Cowling said WH Smith was unlikely to see a major impact from the cost-of-living squeeze, as the average transaction with a shopper was under £10 and sales at its travel stores were driven by convenience.

The book market is expected to remain buoyant, following a return to reading during the pandemic, with Cowling tipping Richard Osman’s latest cozy crime novel as a likely bestseller.

“A lot of people have come back to reading and with initiatives like the work of Marcus Rashford [the footballer who has launched a book club for children] there is plenty of evidence that young people are beginning to return to books.

Cowling said WH Smith was not hit by cost inflation as hard as some other retailers, in part because it had fixed prices on many of its products purchased in East Asia a while ago. a year and that it had also hedged against the recent decline in the value of the pound against the dollar.

He said the biggest impact on the business had been the increase in staff wages – with shop workers’ hourly wages rising by 10% over the past year – but that had helped the group to make sure he had enough workers for the Christmas rush.

Luz W. German