WH Smith (SMWH) is a business in flux. For the first time in the group’s history, sales from travel outlets now contribute more to the top line than the stationer’s high street shops. But that doesn’t mean the high street side of the business doesn’t have a future, says chief executive Stephen Clarke. Only three shops closed during the last financial year, and a new site in Hungerford has just opened its doors. Like-for-like sales may have fallen by 4 per cent last year on the high street – compared with a 4 per cent rise across travel – but trading profit remained flat at £62m.
That’s because WH Smith is an expert cost-cutter: last year it clawed back £12m by renegotiating rents, lease renewals and other contracts, and has identified a further £9m-worth of cost savings for the coming financial year.
The group is becoming increasingly international, too. It was a record year for new business wins – 41 new units in total – meaning the group now operates in 45 airports and 25 countries outside of the UK.
Analysts at Investec expect pre-tax profit of £149m for the year ending August 2018, giving EPS of 111p, compared with £140m and 104p in 2017.
| WH SMITH (SMWH) | ||||
| ORD PRICE: | 2,060p | MARKET VALUE: | £2.28bn | |
| TOUCH: | 2,060-2,064p | 12-MONTH HIGH: | 2,095p | LOW: 1,398p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 169p* | NET CASH: | £4m | |
| Year to 31 Aug | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 1.19 | 103 | 68.9 | 30.7 |
| 2014 | 1.16 | 112 | 77.3 | 35.0 |
| 2015 | 1.18 | 121 | 87.1 | 39.4 |
| 2016 | 1.21 | 131 | 95.6 | 43.9 |
| 2017 | 1.23 | 140 | 105 | 48.2 |
| % change | +2 | +7 | +9 | +10 |
| Ex-div: | 11 Jan | |||
| Payment: | 1 Feb | |||
| *Includes intangible assets of £67m, or 61p a share | ||||
