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Earnings

WH Smith sees recovery in North America after pandemic-hit year

FILE PHOTO: A company logo is pictured outside a branch of WH Smith in Manchester, northern England, March 17, 2016. REUTERS/Phil Noble

(Reuters) - WH Smith SMWH.L said on Thursday it has started to see signs of recovery in North America as it opens stores and secures new business, after coronavirus-led curbs led to an annual headline pretax loss for the British retailer.

The company, which sells everything from books and sandwiches to headphones, posted a headline pretax loss of 69 million pounds ($91.05 million) for the year ended Aug. 31, compared with a profit of 155 million pounds last year.

Founded more than 200 years ago as a news vendor in London, WH Smith expanded at a host of major airports to take advantage of rising passenger numbers, before the COVID-19 pandemic decimated global demand for travel earlier this year.

“While passenger numbers continue to be significantly impacted in the UK, our North American business, where 85% of passengers are domestic, is beginning to see some encouraging signs of recovery,” said Chief Executive Officer Carl Cowling.

The company said it would continue to have sufficient liquidity headroom in its existing facilities, even in the worst-case scenario, which assumes a further two-month lockdown in addition to the ongoing four-week lockdown in the UK.

WH Smith in August forecast full-year headline pretax loss of between 70 million pounds and 75 million pounds, and said it could cut up to 1,500 jobs as part of a restructuring of its UK store operations.

The retailer, which currently has 558 high-street stores and 243 travel stores open, including 206 post offices and 135 hospital stores, said it expects underlying cash burn for November to be about 20 million pounds.

($1 = 0.7579 pounds)

Reporting by Tanishaa Nadkar in Bengaluru; Editing by Devika Syamnath

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