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WH Smith swings back into profit amid travel rebound

A branch of WH Smith in central London
Total sales across WH Smith's travel business came in above pre-pandemic levels in the second half of the year at 130% of 2019 revenue, having purchased US-based airport technology retailer InMotion in 2018. Photo: Press Association

WH Smith (SMWH.L) received a boost from investors on Thursday after it announced a swing back to profit thanks to a rebound in the global travel market.

Pre-tax profit: £61m ($69.5m) compared to loss of £104m

Travel sales: 130% of 2019 revenue

High street sales: 82% of 2019 revenue

The retailer posted pre-tax profits of £61m for the year to 31 August, compared to losses of £104m the previous year, when COVID knocked sales and footfall.

Total sales across its travel business came in above pre-pandemic levels in the second half of the year at 130% of 2019 revenue, having purchased US-based airport technology retailer InMotion in 2018.

Meanwhile, its high street division was 82% of 2019 revenue during the period, or 83% on a comparable store basis.

“2022 has been a successful year for WHSmith and we enter the new financial year with the group in its strongest-ever position as a global travel retailer with multiple growth opportunities across the world,” Carl Cowling, chief executive of WH Smith, said.

“We have started the year well and, while there is economic uncertainty, travel patterns globally continue to improve and this, combined with the strength of the group's growth opportunities, means that we are well positioned for a year of significant progress in 2023.”

Cowling added that the firm sees “significant scope to grow the brand globally”.

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The group opened 98 new stores in the year, with a pipeline of 150 new stores yet to open across 16 countries and in airports such as Los Angeles, Salt Lake City, Brussels, Oslo and Melbourne

It also resumed its dividend on the back of the strong performance, with solid trading expected to continue into the new year.

Shares were as much as 5% higher on the day in London.

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Mark Crouch, analyst at social investing network eToro, said: “Not so long ago, WH Smith’s recovery from coronavirus looked like it could have been a long, drawn out affair.

“However, the group has bounced back over the past 12 months, primarily due to the recovery of the travel sector, which itself has recovered strongly over the past few months.

“The group now seems confident in its future, demonstrated by the reinstatement of its dividend, with the mood music now radically different to what it was a year ago.

“Smith’s share price may be down more than 15% since the start of the year, but it wouldn’t surprise us now to see it gain a little ground in the remaining part of the year.”

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