// WHSmith expected to post a pre-tax loss of between £70m and £75m for the year to August 31
// It will reveal its full year trading update on Thursday November 12
// WHSmith’s travel stores have seen revenues slump on the back of global travel restrictions
WHSmith is forecast to post an annual loss after the coronavirus pandemic hammered sales revenues from its travel hub stores.
The heritage retailer is expected to report a pre-tax loss of between £70 million and £75 million for the year to August 31 when it reveals its latest trading figures on Thursday this week.
Analysts at Investec expect it to deliver a £73 million loss, describing 2020 as a “write-off” year for WHSmith.
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In August the 228-year-old business said 1500 jobs, around 11 per cent of its workforce, could be axed after a dramatic fall in sales.
Its travel arm – which consists of stores at airports and train stations – has boosted the retailer in recent years with rapid growth.
However, it has seen revenues slump on the back of global travel restrictions which are set to continue for the coming months.
“A near term recovery in travel seems unlikely”, according to Investec, but the brokerage stressed that it does not believe the travel market has structurally changed permanently and expects its recovery in the sector to become more clear next year.
In the UK, WHSmith’s high street stores have been battered by lockdown measures from March as well depressed high street footfall in more recent months.
Investors will therefore be particularly keen for an update of how bosses plan to steer the retailer through England’s second national lockdown, although the majority of its stores are expected to remain open through essential status.
Around 300 of its 1600 stores were kept open after the first UK-wide lockdown earlier this year – primarily those in hospitals and with post offices attached – but the retailer is expected to be better sheltered this time around after newsagents were given the green light to stay open during the current English lockdown.
“WHSmith should paint a picture of just how badly lockdown two is likely to hit sales in the crucial Christmas shopping period,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“Its travel division was the main driver for growth before the pandemic, so the prospect of deserted railway stations and airports for potentially many more months will be a bitter pill to swallow.
“There will be hope online purchases will make up some of the shortfall but competing with the might of Amazon won’t be easy.’’
with PA Wires
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