WH Smith's Travel Business Resilient, Meeting Forecasts
By Anandita Mehrotra
(Reuters) -Retailer WH Smith expects to meet full year market expectations despite reporting a slight dip in first-half profit on Wednesday as weakness in its recently sold British high street stores offset growth at travel outlets.
The company, with about 1,200 stores in airports and train stations across 32 countries, is banking on a strong summer season to drive foot traffic in transit areas. It said the second half of its financial year had started well.
WH Smith reported pre-tax profit of 45 million pounds ($59.72 million) for the first-half of the fiscal year, compared with 46 million pounds a year ago.
"We are mindful of the increased level of geopolitical and economic uncertainty, however given the resilient nature of our business, we are well-positioned to benefit from the growth opportunities in global travel retail," it said in a statement.
The shares slipped 1.6% at 935.5 pence by 0821 GMT while the FTSE midcap index was down 0.45%.
Analysts on average are expecting the company to post full year pre-tax profit of 182.6 million pounds ($242.7 million), in forecasts compiled by LSEG.
Revenue from the travel business rose 6% to 712 million pounds in the first half for the period ending 28 February compared to a 13% rise to 670 million pounds in the same period last year. Sales at the retailer's recently sold UK high street business fell 7% to 239 million pounds in a subdued consumer market.
"We believe WH Smith's forensic approach to retailing should mean it is well-placed to expand successfully in the global travel essential retail segment," said Richard Chamberlain, analyst at RBC Capital Markets.
($1 = 0.7525 pounds)
(Reporting by Anandita Mehrotra in Bengaluru; Editing by Mrigank Dhaniwala and Elaine Hardcastle)
