WH Smith shares tumbled on Thursday after it warned that the conflict in the Middle East was weighing on passenger numbers and consumer confidence.
The travel retailer’s share price fell more than 15 per cent in early trading to 532p, leaving the stock down more than 16 per cent since the start of the year.
WH Smith posted a pre-tax loss of £25m for the six months to February, widening sharply from a £4m loss a year earlier. Revenue edged up 2 per cent to £748m.
The retailer, which last year sold its 480 high street stores to Modella Capital, now operates primarily from airports, railway stations and hospitals.
WH Smith said: “In light of the uncertainty arising from the conflict in the Middle East, the group is taking a more cautious outlook reflecting the impact on passenger numbers and weaker consumer confidence.
“Much will depend on the peak summer trading period and the group assumes no immediate improvement in consumer confidence.”
The retailer also slashed its dividend as it focuses on protecting margins and strengthening its balance sheet.
Assuming jet fuel supplies “can be maintained”, WH Smith said it expects full-year profit before tax and underlying items to come in between £90m and £105m, down from £108m last year.
The warning comes as the conflict in the Middle East disrupts international travel. Airlines initially grounded flights to protect passengers and are now facing growing concern over jet fuel availability.
The UK’s leading airlines have called on the government to cut taxes and regulation to help the sector prepare for potential fuel disruption.
WH Smith said UK revenue growth was flat over the last six months, reflecting a “softening” in air travel linked to the conflict.
However, the retailer recorded revenue growth in North America and the rest of the world, and said its new flagship stores at Heathrow Airport were a reason for optimism.
WH Smith is also still working to rebuild confidence after an accounting blunder last year led to the resignation of chief executive Carl Cowling.
Cowling stepped down with immediate effect in November after a Deloitte report identified weaknesses in the operations of the retailer’s North American division.
The review followed WH Smith’s admission that it had overstated its profits by around £30m.
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