Retailer WH Smith Plc (SMWH.L) Thursday reported an increase in first-half profit, reflecting improved margins, despite a decline in revenues. The company said its businesses continue to increase profit, amid challenging economic environment.
Kate Swann, chief executive of the company stated, "...we expect the trading environment to remain challenging however the business is in good shape and is well positioned for continued growth in both the UK and internationally."
Travel business trading profit in the period increased 7 percent to 29 million pounds, with further improvement in gross margin. In High Street, trading profit was up 2 percent to 48 million pounds, with 'good' gross margin performance.
Group's gross margin improved by 160 basis points from a year ago.
In the first half, the company's profit before tax increased to 69 million pounds from 66 million pounds in the previous year. On a per share basis, earnings were 44.2 pence, up from 40 pence per share a year earlier.
Revenues for the period fell 4 percent to 638 million pounds, with a like-for-like sales decline of 5 percent. In Travel, total sales remained flat, with 4 percent decrease in like-for-like sales.
In High Street, total sales and like-for-like sales dropped 6 and 5 percent, respectively. According to the company, sales in the High Street business are subject to seasonal fluctuations, with peak demand in the Christmas trading period, which falls in the first half of the financial year.
As at April 10, the firm purchased 4.2 million of shares and returned 28 million pounds of cash to shareholders.
The board has also declared an interim dividend of 9.4 pence per share, a 13 percent increase on last year.
Separately, WH Smith announced the appointment of Henry Staunton as non-executive chairman and the retirement of Walker Boyd, the current non-executive chairman. Staunton will become chairman on September 1, 2013. He succeeds Boyd, as chairman of the company, who will step down on August 31, 2013.
Staunton joined the board on September 1, 2010 and is currently the senior independent director. Drummond Hall will become the senior independent director with effect from September 1.
In London, WH Smith shares are currently trading at 780.5 pence, up 35.5 pence or 4.77 percent.
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