UK. Leading travel retailer WHSmith today posted a +5% year-on-year rise in reported revenue to £748 million (US$1.009 billion) on a constant currency basis for the first half ended 28 February, with like-for-like sales up +2%.
Despite what it described as a “solid first-half trading performance”, headline group profit before tax and non-underlying items fell sharply year-on-year to £3 million (US$4.05 million).
Headline trading profit declined to £32 million (US$43.3 million), reflecting disruption from UK airport store refurbishments and ongoing inflationary pressures.
In its interim results released today (23 April), the company noted a more cautious outlook amid uncertainty linked to the Middle East conflict, citing potential impacts on passenger numbers and consumer confidence.
Performance by region
UK revenue increased +2% on a total and like-for-like basis to £392 million (US$528.6 million), resulting in headline trading profit of £34 million (US$45.8 million). The performance reflected inflationary pressures and disruption from store refurbishments at key airport locations.
In the Air channel, total revenue increased +1% (+2% like-for-like), amid expected trading disruption from its largest-ever store development programme.
Since the start of the financial year, WHSmith has opened six one-stop shops and three flagship stores at London Heathrow Airport, showcasing expanded health & beauty and food-to-go offerings.
Initial performance at the newly opened flagship stores has been positive. Four stores opened at Manchester Airport, while nine closed mainly due to landlord redevelopment.
In Rail, total revenue increased +1% year-on-year (-2% like-for-like), supported by the opening of a one-stop shop at London Bridge station, with the company planning to expand food-to-go ranges across more locations.
In North America, the world’s largest travel retail market, total revenue rose +10% on a constant currency basis (+1% like-for-like) with reported growth of +5% to £204 million (US$275 million).
North America’s Air segment recorded +15% constant currency growth (3% like-for-like). The Travel Essentials business, accounting for over +55% of regional revenue, drove performance with revenue up +22% on a constant currency basis (+6% like-for-like).
Headline trading profit fell to £2 million (US$2.7 million), mainly due to higher costs linked to the new logistics set-up and the annualisation of labour cost increases.
Consumer technology and accessories business InMotion reported a -4% decline in like-for-like revenue in the first half, although early trading in the first seven weeks showed a +3% increase, supported by improved footfall.
The period included the opening of six InMotion stores across Dallas, Denver, Detroit and Albuquerque airports, primarily within wider airport retail packages.
In the Rest of the World, revenue increased +8% on a constant currency basis (+6% like-for-like), resulting in a headline trading loss of £4 million (US$5.4 million), amid weaker performance in some locations and inflationary pressures on staff and logistics costs.
WHSmith Executive Chair Leo Quinn said, “The immediate focus is to restore confidence and ensure the right foundations are in place to support profitable growth and long-term value creation.
“Moving forward, the Board and management team will have a relentless focus on driving cash, cost discipline and strengthening the balance sheet. As a first step, the Board has taken the prudent decision to suspend the dividend.
“This is a business with a strong brand and proposition in high-footfall travel markets and the new flagship stores opened across Heathrow airport are raising the global standard for travel essentials retail.
“None of this is achievable without our people. Making sure our colleagues are empowered is a key priority, as engaged teams execute better, serve customers better and drive higher performance over time.”
Looking forward, Quinn concluded: “While the near-term outlook is uncertain, I am confident that, with the right focus and discipline, the business can deliver superior returns for the benefit of our colleagues, partners and shareholders over the longer-term.” ✈
