Sunny

Sunny

max temp: 15°C

min temp: 12°C

ESTD 1874 Search

Retail: WH Smith continues progress on margins despite dip in festive period sales

09:47 22 January 2014

WH Smith today reported further progress on improving its margins.

WH Smith today reported further progress on improving its margins.

Archant

WH Smith today shrugged off a tenth successive year of falling Christmas sales as it highlighted a “good profit performance” driven by a continued squeeze on costs.

shares

Like-for-like sales were down 4% for the 20 weeks to January 18 and have been consistently negative for the period since 2005 but the retailer’s strategy of focusing instead on margins has won-over City analysts.

Its 615 high street stores saw a fall of 6% but WH Smith said there was good margin improvement and costs were tightly managed.

In the retailer’s travel division, which has 673 units at airports, railway stations and motorway services, like-for-like sales were down 1%, again with margin improvement, and a store opening programme progressing well.

The group said it had identified further opportunities for growth in both the UK and abroad.

It also began to deliver on its pledge of returning £50million of cash to investors, buying 1.6m shares at an average price of £9.57, after last year reporting annual profits up 6% at £108m.

Chief executive Stephen Clarke said: “During the period we have delivered another good profit performance across the group with costs tightly controlled and further improvement in gross margin.

“Looking ahead, we continue to plan cautiously and manage the business tightly while investing in new opportunities for future growth. We are confident in making further progress in the year.”

WH Smith slashed £18m of costs from its high street network during 2012/13 and has said it is targeting a further £22 million savings over the following three years.

The chain has weathered the downturn with the help of “impulse” offers such as a free bottle of water with the Telegraph newspaper, while shifting its focus away from lower-margin CDs and DVDs towards books and stationery.

WH Smith shares opened more than 2% higher today, with analysts at Cantor Fitzgerald Stockbrokers sticking by their forecast for profits of £108m in the current financial year.

shares

0 comments

Gary Allen, operations manager,  with Diane Allen and Graham Allen at Ipswich-based Ajax Domestic Spares which is celebratiing 40 years in business.

Ajax Domestic Spares has marked 40 years in business in style by launching a new showroom in Foxhall Road, Ipswich.

The Willis building in Ipswich.

Around 200 people are to lose their jobs at the Ipswich office of global insurance broker and risk management group Willis.

The Great House restaurant with rooms in Lavenham.

An award-winning Suffolk restaurant has gained another accolade after being ranked the 26th best in the country.

Gavin Patterson, chief executive of BT.

Photo: BT

BT is to pay out up to £129million to extend the Government-led roll-out of superfast broadband, after a bigger-than-expected take-up of the service.

Centrica has reignited controversy over high energy bills by announcing a 44% increase in first half profits at its British Gas retail division.

Energy giants Royal Dutch Shell and Centrica today revealed plans to axe a total of more than 12,000 jobs.

Christopher Hayman of Hayman Distillers with his children Miranda and James.

Essex gin maker Hayman Distillers is celebrating after winning a Gold award at this year’s International Wine and Spirits Competition (IWSC).

Bakery chain Greggs saw like-for-like sales rise 5.9% in the six months to July 4.

Higher breakfast sales and a bigger range of healthier products helped Greggs grow underlying profits by 51% in the first half of the year.

Barclays chairman 

John McFarlane.
Photo: VisMedia

Barclays boss John McFarlane today signalled plans to ramp up growth, squeeze costs and streamline the business after announcing a 25% rise in first half profits.

Uncertainty over Government policy is holding back potential investment in the offshore wind sector, according to East of England Energy Zone director James Gray.

The absence of a clear Government stategy is leaving the offshore wind industry “in limbo”, according to a leading figure within the sector in East Anglia.

The rate of growth in the UK economy rebounded during the second quarter of 2015, but the manufacturing sector continued to struggle, according to official figures.

UK growth bounced back in the second quarter of 2015 as gross domestic product (GDP) increased by 0.7%, according to official figures.

Most read

Most commented

Topic pages