(Reuters) – WH Smith said it was trading ahead of its expectations for the year after stronger passenger numbers at airports and train stations helped the British retailer post a better-than-expected half-year profit on Thursday.
The travel industry has made a strong comeback from pandemic lows as offices reopened and more people took leisure trips after months of restrictions, although rail strikes in the UK have caused some disruptions in the sector.
The London-listed company, which has stores in travel hubs across the world, reported headline profit before tax of 45 million pounds ($56.01 million) for the six months ended Feb. 28, compared with 14 million pounds a year earlier.
Analysts on average had expected pretax profit of 42.6 million pounds, according to a company-compiled consensus.
In its statement, the retailer said “current trading is strong and we are ahead of expectations for the full year”, without giving further details.
WH Smith said it expects its North America division to post a full-year trading profit of over 50 million pounds, compared with 33 million pounds the previous year.
This would make it the company’s second-largest division after the UK travel retail business by the end of the year.
WH Smith, which sells books, stationary and drinks in retail stores across the UK, said its high street business is on track to deliver its cost savings target of 13 million pounds for the year, as it saved 7 million pounds in the first half thanks to a fall in rents.
Given the company’s lower priced range of products, it has also been able to manage the impact of inflation well, CEO Carl Cowling told Reuters.
“We don’t really have the inflationary pressures that say, food retailers have, so we have been able to navigate it quite well,” he said.
Despite the robust performance, WH Smith’s shares were down 1.8% at 1,595 pence as of 0930 GMT, reflecting disappointment in some segments of the business.
Brokerage RBC said sales in the UK travel business were lower than it expected and that the high street recorded slightly lower-than-estimated margins.
($1 = 0.8035 pounds)
(Reporting by Muhammed Husain in Bengaluru; Editing by Subhranshu Sahu)
