When items relating to the acquisition of InMotion and WH Smith’s recent high street review are included, group pre-tax profit fell from £82m to £65m in the half year to 28 February.
In October, the company said it was closing stores with 'onerous leases' and winding down non-core trial initiatives such as Cardmarket and WH Smith Local.
WH Smith’s biggest division, travel, continues to perform well thanks to ongoing investment as like-for-like sales jumped 3% over the same period.
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WH Smith says its acquisition of US airport chain InMotion, which doubles the size of its business outside of the UK, is progressing well as the company secured a further 21 units.
‘While at a headline level the cost of acquiring US airport retailer InMotion may have hit profit, it is looking a sound strategic move and the integration of the business is progressing at pace,’ says AJ Bell investment director Russ Mould.
He notes shops in train stations and airports often do well as rushed commuters often have no alternative other than to pay higher prices.
HIGH STREET TRADING SURPRISE
The stationery and bookseller’s struggling high street stores has delivered one of the ‘best trading performances’ in recent years with sales dipping only 2% over the same period.
Robust trading on the high street has been driven by demand for stationery, particularly Christmas cards, wrapping paper, calendars and art and craft product ranges.
RBC Capital Markets analyst Richard Chamberlain says WH Smith’s results were slightly better than expected and anticipates a small upgrade to annual pre-tax profit forecasts.
Chamberlain is confident the long-term expansion in the travel division should continue to offset the challenging high street business.