UK: WH Smith hails ‘resilient’ profitability despite fall in sales
PUBLISHED: 13:28 23 January 2013 | UPDATED: 13:28 23 January 2013
WH SMITH hailed its resilience today as departing chief executive Kate Swann continued the retail chain’s focus on profitability over sales.
Like-for-like revenues fell 5% in the 20 weeks to January 20 but, with close management of margins and costs, the company said it had still delivered a “good” profits performance.
The company, which has 618 high street stores and 619 travel outlets at airports, railway stations and motorway services, posted annual profits of £102million last October and that figure is expected to rise to £106m for the current financial year.
The performance compares with a loss of £135m in 2004, prior to Ms Swann’s appointment.
Ms Swann has shifted the company’s focus away from lower-margin CDs and DVDs towards books and stationery, as well as reducing its dependence on the Christmas season and the need for heavy discounting.
However Ms Swann disappointed investors in October by announcing plans to leave the group. She will hand over the reins to Steve Clarke, who is currently managing director of the high street division.
Ms Swann said she expected trading conditions to remain challenging but that the company’s resilience and profits record meant she was confident of further growth.
Seymour Pierce analyst Kate Calvert said: “We believe there is still plenty of growth to go for, particularly in travel and internationally, and the high street business market position is probably strengthening given recent administrations as there become fewer places to shop on the high street.”