August 28, 2019 / 6:45 AM / 3 months ago

WH Smith says to meet expectations for year, cites stellar travel unit

(Reuters) - WH Smith Plc (SMWH.L) said on Wednesday it was set to meet its fiscal year results expectations, bolstered by solid sales at its stores in airports and railway stations.

File photo of pedestrians walking past a WH Smith shop in London, Britain October 6, 2008. REUTERS/Alessia Pierdomenico/File Photo

The books, stationery and newspaper chain has benefited from a boom in air travel, and its network of airport, train station and workplace kiosks have fared better than its high street business, where it is looking to cut costs and grow margins.

The more than 200-year-old speciality retailer, which operates over 1,600 stores across the globe, also said that it had seen strong growth at its international business, with 428 stores open outside the UK.

Founded in 1792, WH Smith has increased costs to open more stores as it ramps up internationally. It sealed a deal in October to buy digital accessories retailer InMotion in its first step into the U.S. airport market.

Shares in the FTSE 250 .FTMC retailer, which have risen 16.2% this year, were slightly higher at 1,999 pence at 0745 GMT.

“WH Smith is a play on the structurally growing Global Travel Essentials market. Travel now accounts c.70% of Group EBIT, following the acquisition of InMotion in Nov. 2018 which we see as game-changing,” said Investec analysts, who rate WH Smith a “buy”.

The company said its high street business had performed in line with expectations in the year ending Aug. 31 and added that it would focus on stationery, developing new ranges and giving more space to the category in its stores.

Last year, WH Smith said it would close six high street stores and a franchisee initiative as part of a restructuring to cope with weaker consumer spending.

WH Smith, which runs 1,004 travel outlets and 599 high street stores, is also in the middle of a change in leadership, with the managing director of its high street business, Carl Cowling, poised to replace Stephen Clarke after six years in charge.

The company will report annual results on Oct. 17 and analysts expect annual pretax profit of 150.8 million pounds, according to IBES data by Refinitiv. WH Smith reported pretax profit of 134 million pounds a year earlier.

Reporting by Indranil Sarkar and Noor Zainab Hussain in Bengaluru; editing by Arun Koyyur, Bernard Orr

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