WH Smith's (SMWH) like-for-like sales fell 5 per cent at the half-year stage, but group trading profit still rose 4 per cent year-on-year to £77m as management again took an axe to costs. Accordingly, the gross margin rose 160 basis points.
The high street unit, which generates two thirds of sales, delivered £9m of savings in the half - with a further £8m identified for the second half. So, even though lower sales of books, magazines, and stationary meant like-for-like sales here fell 5 per cent, the unit’s trading profit rose 2 per cent to £48m. The travel business, meanwhile, where growth hopes are largely focused, saw like-for-like sales fall 4 per cent. But cost savings here, too, helped the unit’s trading profit rise 7 per cent to £29m. The travel side opened 12 UK units, bringing the total to 565. While, overseas, 16 units were opened - there are now 78 overseas units open and a further 43 units yet to open. In Shanghai, 30 small kiosks went live in metro stations.
Bank of America Merrill Lynch expects pre-tax profit of £108m for 2013, giving adjusted EPS of 70.3p (from 63.1p in 2012).
| WH SMITH (SMWH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 777p | MARKET VALUE: | £979m | |
| TOUCH: | 774-779p | 12-MONTH HIGH: | 795p | LOW: 467p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 128p* | NET CASH: | £41m | |
| Half-year to 28 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 665 | 66.0 | 40.9 | 8.30 |
| 2013 | 638 | 69.0 | 46.0 | 9.40 |
| % change | -4 | +5 | +12 | +13 |
Ex-div: 17 Jul Payment: 8 Aug *Includes intangible assets of £58m, or 46p a share | ||||
