WH Smith (LON:SMWH) shares are in the red after the company revealed a 4.28% decline in full-year pre-tax profits to £134 million. The retailer cited a difficult trading environment, and the restructuring of its high street business for the fall in earnings. The firm has decided to close Cardmarket and WH Smith Local.The company is going to focus more on the travel division – which saw annual profit jump by 7%. It is worth noting the UK had a great year in terms of tourism, and that was a contributing factor to WH Smith’s success too.
In a bid to keep shareholders on side, the group raised the final dividend by 13%, and launched a share buyback scheme of £50 million. Seeing as the group is undergoing restructuring, it seems odd that the company has decided to allocate funds this way. There is a case to be made for conserving cash while they are reorganising the business.
WH Smith(LON:SMWH) had a mediocre start to the year as first-half revenue was flat, while pre-tax profit dipped by 1.2%. Like-for-like (LFL) sales dipped for 1%, and this metric gives us a better picture of the sales performance. LFL high street sales dropped by 4%, while the travel shops registered a 3% jump. The travel division makes up the lions shares of the revenue and is performing well thanks to investment at home and abroad.
Retailers across the board are have having a tough time, and when you take into account the firm was voted the ‘worst high street retailer’ earlier this year, it sales aren’t too bad. Shopper’s complained about rude staff, high prices and tired stores. The group should address these issues, and not sit back and rely on transport hub stores.
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