WH Smith to buy back more shares as profits rise

Thursday 10 October 2013 08.58
WH Smith to buy back another £50m sterling of shares
WH Smith to buy back another £50m sterling of shares

UK books and stationery retailer WH Smith today beat forecasts with a 6% rise in year profit.

The results were driven by a strategy that focuses on improving profit margins and reducing costs rather than growing underlying sales.

The 221-year-old group, also said today it would buy back another £50m sterling of shares, having completed a programme of the same amount announced last August.

It also increased targeted cost savings in its high street business to £22m over the next three years.

Data and surveys have shown an improving outlook for UK consumer spending, which generates about two-thirds of gross domestic product, but retailers remain wary as inflation continues to outpace wage rises.

"Looking to the year ahead, we continue to plan cautiously in an uncertain environment, however we are a resilient business and are well positioned for continued growth in both the UK andinternationally," said chief executive Steve Clarke. He succeeded Kate Swann in July.

WH Smith, which trades from over 1,200 stores including stores in Dublin Airport's Terminal 2, made a pre-tax profit of £108m in the year to August 31.

That compares to analysts' consensus forecast of £107m and £102m made in the 2011-12 year.

Total sales fell 5% to £1.19 billion, with sales at stores open over a year also down 5%.

WH Smith's travel division - outlets at airports, railway stations, motorway service stations, hospitals and work places - posted a 5% rise in trading profit to £66m, while the firm's traditional high street business made £56m, up 4%.

The firm ended the period with net cash of £31m and raised its dividend payout by 14% to 30.7 pence.