The Bookseller.com

20th November 2008

« Headlines

Profit up at WHS, books flat

09.10.08 Philip Jones

W H Smith has reported a massive 22% increase in sales at its travel stores, and improved profitability across the group in its financial year to end-August. However books sales were flat, excluding the impact of last year's Harry Potter release.

Total group sales were up 4% to £1,352m (2007: £1,299m) with like-for-like sales down 2%. Travel sales grew by 22% to £413m, up 1% on a like-for-like basis (excluding tobacco, like-for-like sales were up 3%), thanks to the acquisitions of UNS Group Limited and airport units from Alpha Retail UK Limited and an agreement with RoadChef. High Street sales were down 2% at £939m and down 3% on a like-for-like basis.  

The group generated profit before tax and exceptional items of £76m (2007: £66m), an increase of 15% on the prior year. Travel continued its strong performance, with profit increasing by 14% to £41m. High street profit was £47m, up 7% on the prior year. WHS said: "We are continuing with our strategy to rebalance the mix of our business towards our core categories, reducing our reliance on entertainment, to optimise margins and maintain tight cost control."

WHS said it had seen an "encouraging performance" from its specialist bookstore format within its travel group, and now plans to open a further six stores by Christmas. Overall, it said its gross margin from the sale of books was up year on year. "We were pleased with our share performance versus the general high street, driven by high market shares over the key Christmas period in front list titles such as Russell Brand's My Booky Wook and Richard Hammond's On the Edge."

Kate Swann, group chief executive, said: "We have seen further strong performance from travel with the integration of new businesses proceeding in line with our plan. In high street, we continue to deliver our strategy to rebalance the mix of our business and rebuild our authority in our core categories." But she was wary about the months ahead: "Given the current consumer environment, we are expecting a competitive Christmas trading season. We have planned accordingly."

Retail Financial W H Smith Philip Jones kate swann Home WHS