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Retail analyst tips W H Smith

17.04.08 Graeme Neill

W H Smith has been made a key tip for share investors by an influential retail analyst, after it reported a growth in profits of 8% in the six months to end-February.

Despite a shrinkage in like-for-like sales of 2%, WHS’s total group sales for the six months ending 29th February were £734m, up 2% from the same period last year. Group profit before tax was £64m, up from £59m in 2007, while book like-for-like sales grew by 2%.

Nick Bubb, from Pali International, said that the retailer was on course to achieve its performance targets. Smith’s c.e.o. Kate Swann could earn more than £5m if the business achieves earnings per share of 45p for the year ending August 2010. The retailer’s earnings per share for the year ending August 2007 were 29.3p.

"The management express their usual caution about the retail outlook with the interims today, but they have managed to increase profits and earnings very well over the last few years despite falling like-for-like sales, by engineering better margins and growing the travel division, and we expect them to continue to do so," said Bubb.

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