These results from WH Smith (SMWH) suggest the pain on the high street is all too real for Britain’s retailers. During the six months ended 28 February, revenues from the stationer’s high street business fell 5 per cent in total (4 per cent on a like-for-like basis), while travel outlets – that’s train stations and airports – mustered a 7 per cent improvement (3 per cent on an underlying basis). Thankfully, this was enough to keep overall revenues flat and group trading profits down just 1 per cent to £91m, while a decent level of cash generation allowed for a 10 per cent rise in the half-year dividend.
While high street retailers are struggling in the wake of lower footfall data and the rising popularity of online shopping, WH Smith has managed to claw back £7m in cost savings across its 610 stores and expects to recover another £5m by the year-end. That would bring total cost savings up to £12m – £3m ahead of the initial target.
As per Bloomberg consensus forecasts, analysts still expect to see pre-tax profits of around £147m for the year ending August 2018, giving EPS of 109p, compared with £140m and 104p in FY2017.
| WH SMITH (SMWH) | ||||
| ORD PRICE: | 1,997p | MARKET VALUE: | £2.2bn | |
| TOUCH: | 1,996-1,998p | 12-MONTH HIGH: | 2,347p | LOW: 1,635p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 183p* | NET DEBT: | 7%** | |
| Half-year to 28 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 643 | 83.0 | 62.2 | 14.60 |
| 2018 | 643 | 82.0 | 61.5 | 16.00 |
| % change | - | -1 | -1 | +10 |
| Ex-div: | 12 Jul | |||
| Payment: | 2 Aug | |||
| *Includes intangible assets of £70m, or 64p a share **Includes finance leases worth £11m | ||||
