(RTTNews) - UK-based magazine and book retailer WH Smith Plc (SMWH.L: News ) Thursday reported higher profit for fiscal 2009, despite a decline in revenues, driven by gross margin improvement. The company also proposed an increased final dividend for fiscal 2009 and announced a rolling share buyback programme.

WH Smith reported fiscal 2009 pre-tax profit of GBP 82 million, up from GBP 76 million in the same period of last year. Profit for the year was GBP 63 million compared to GBP 59 million in the prior year. Earnings per share were 40.6 pence, up from 35.3 pence a year ago.

Underlying earnings attributable to shareholders grew to GBP 64 million from GBP 59 million last year. Underlying earnings per share rose to 41.3 pence from 35.3 pence in the previous year.

WH Smith also reported fiscal 2009 revenues of GBP 1.34 billion, down 1% from GBP 1.35 billion in the same period of fiscal 2008. Like-for-like sales declined 5% for the period.

However, cost of sales declined to GBP 685 million from GBP 720 million a year ago, and gross margin improved by 220 basis points year on year. Operating profit increased to GBP 83 million from GBP 74 million last year.

Segment-wise, Travel total sales were up 8%, driven by new business wins and recent acquisitions. Meanwhile, LFL sales were down 2%. Operating profit increased 17% to GBP 48 million despite softer passenger numbers, as a result of increased sales combined with improved gross margin and tight cost control.
High Street total sales decreased 5% with LFL sales declining 6%. Excluding entertainment, LFL sales were down 2%. High Street operating profit was GBP 49 million, up 4% on the prior year.

Category-wise, books LFL sales declined 4% in fiscal 2009 while gross margin was up year on year. Stationery LFL sales were up 1%, outperforming the general stationery market. News and Impulse LFL sales also dropped 2% year on year with an improvement in gross margin. Further, entertainment LFL sales decreased 35%, driven by the company's strategy and also by supply chain issues in the category.

Commenting on the results, Kate Swann, Group Chief Executive said, "Whilst trading conditions are challenging, we have planned accordingly and the Group is well-positioned to benefit when consumer spending recovers."

WH Smith also stated that its Board has proposed a 16% higher final dividend of 11.3 pence per share, giving a total ordinary dividend per share of 16.7 pence, a 17% increase over the previous year. The dividend will be paid on February 4 to shareholders registered at the close of business on January 8.

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