High street book retailer and stationer, WHSmith has reported a pre-tax profit increase of 9% to £112 million on annual profits for the year to the end of August, despite a 3% like-for-like sales decline.
Travel like-for-likes were consistently low over the year, on the other hand total sales increased by 4%. In contrast high street sales fell by 5%, with a total of sales falling by 6%.
The British retailer, which has over 720 travel stores and 604 high street branches, has commented that the figures display a reflection of the continuous strategy implemented. The strategy consists of cutting costs at its high street stores and focussing on expanding its travel business. The group has also announced plans to return a further £50 million to investors, after completing a £50 million share buyback scheme.
Sales within the travel division at WHSmith rose by 11% to £73 million. The retailer opened 30 new travel units in the UK, this financial year as well as 30 new overseas outlets.
“Despite operating in a market where some of its categories are under considerable pressure, we believe the company’s attention to detail and diversification should ensure the strong track record of cash returns and earnings growth to continue,” analysts at Barclays said in a note.
WHSmith have also declared that an additional £11 million in cost savings have been found, settling the total at £21 million. £11 million of which is planned for 2014-2015. They have also agreed to reduce its pension deficit funding to £3 million a year.
Chief executive Stephen Clarke said: “Looking ahead, our focus will remain on profitable growth, cash generation and investing in new opportunities that position us well for the future.”
Additionally, today WHSmith who also operate the greeting cards website FunkyPigeon, announced the launch of a chain of low-cost greeting card stores named ‘Cardmarket.’ The store will be trailed in a number of small standalone shops. “In contrast to our existing greeting cards offer, which is at the premium end of the market, these stores will provide customers with a value based proposition in this growing part of the market,” the firm said. “The trial will be in relatively low rent, short term leases in non prime pitch locations.”