For any other general retailer, flat sales on the high street wouldn't make for a good set of half-year results. But this is WH Smith (SMWH) we're talking about. The stationer has recently suffered from falling comparable sales across its traditional shops, while its outlets at various travel hubs - airports, train stations, etc - have grown significantly. Case in point: during the first half of the financial year, travel-based sales rose 5 per cent on an underlying basis, while high street sales were level. Over the five weeks to 2 January 2016, they rose by 2 per cent.
There are several driving factors behind the group's better high street performance. It already operates 107 Post Offices within its stores, but won another 61 contracts with the mail courier during the period. This affiliation has helped drive higher footfall at WH Smith shops offering Post Office services. High street sales also benefited from the popularity of colouring books aimed at adults and better buying and sourcing practices. All in all, high street trading profit rose 6 per cent to £53m.
Travel trading profit was up 9 per cent at £35m. Improving passenger numbers and the opening of nine new hospital stores buoyed this non-high street division.
Analysts at Peel Hunt expect pre-tax profit of £132m for the year ending August 2016, leading to EPS of 97.8p, compared with £123m and 87.3p in FY2015.
| WH SMITH (SMWH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,781p | MARKET VALUE: | £2.04bn | |
| TOUCH: | 1,780-1,781p | 12-MONTH HIGH: | 1,893p | LOW: 1,373p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 141p* | NET DEBT: | 1% | |
| Half-year to 29 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 611 | 72 | 51.3 | 12.1 |
| 2016 | 633 | 80 | 57.9 | 13.4 |
| % change | +4 | +11 | +13 | +11 |
Ex-div: 14 Jul Payment: 4 Aug *Includes intangible assets of £61m, or 53p a share | ||||
