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Book sales grow at WHS

17.04.08 Philip Jones

W H Smith has seen its like-for-like sales shrink by 3% at its main high street shops in the first half of its financial year, as it continues to put profits before sales growth. Book sales looked healthier growing by 2% on a like-for-like basis.

Total group sales were up 2% to £734m (2007: £721m) with like-for-like sales down 2% for the six months ended 29th February. Group profit before tax was up 8% to £64m (2007: £59m).

Travel sales grew by 14% to £178m, up 1% on a like-for-like basis (excluding tobacco, like-for-like sales were up 3%). This performance was driven by the airport business which grew by 3% on a like-for-like basis. Like-for-like sales in rail were flat in the half year. High street sales were down 2% at £556m and down 3% on a like-for-like basis.

The group admitted that in the six weeks to 12th April 2008, like-for-like sales continued to be down, by 2%.

WHS' travels stores delivered a 13% increase in operating profit to £17m, however the high street stores saw profits decline from £51m to £50m. A second successive year of declining profits, after reporting a profit of £53m in 2006.

Commenting on the results, Kate Swann, group chief executive, said: "We have delivered another period of good profit growth, with Group profits up 8%. We have seen further strong performance from Travel with substantial progress in new business development in the hospital, air and motorway channels. In the High Street, we successfully continue to deliver our strategy to rebuild our authority in our core categories. The economic environment remains uncertain and, whilst we continue to be cautious, we are confident in the outcome for the full year."

In WHS's books category, like-for-like sales were up 2%, as the company continued its attempts to rebuild its "authority as a popular book specialist and maximise profitability".

According to the statement, the company "achieved further share growth versus the general high street", driven "by the early release of major non-fiction titles, for example Jamie Oliver's Jamie at Home where we performed very strongly and high market shares in front list titles such as Russell Brand's My Booky Wook".

WHS also performed well in children's books over Christmas, and saw successful trials of extended books charts in its travel stores and "an encouraging performance from our specialist bookstore format".

WHS plans further expansion in its travel division, having struck a deal with Alpha Retail to acquire 23 units in 11 airports, and won eight additional retail units due to open later this year, including two bookstores at Manchester airport, a CTN in London City airport and five units in Copenhagen airport.

It will also acquire a further seven high street stores from Martin McColl in line with its strategy "to move into unserved catchments".

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