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Swann steps down at WHS, as profit rises 10%
11.10.12 | Lisa Campbell
WH Smith chief executive Kate Swann is to leave the company in 2013, after leading it to a group profit of £102m – up 10% year on year — in its latest annual results. Book sales across the group fell 7% like-for-like in the year.
Swann will be replaced by the current head of the company’s high street business, Steve Clarke, in July 2013. Since the announcement of her departure this morning (11th October), share prices at the company have tumbled by 7%.
WHS said her departure was part of the company's "succession plan". Chairman Walker Boyd said: "Kate has made an outstanding contribution to WH Smith. The Board is particularly grateful to her for her vision, dedication and leadership which has seen W H Smith go from strength to strength and deliver exceptional shareholder value during her tenure as chief executive. She has built an excellent management team and has put in place a strategy which will continue to deliver for all our stakeholders. We wish her well for the future."
Swann said she was "extremely proud" of what the team had achieved during her nine years at the helm, saying: “WH Smith has a first class management team who are focused on running the business in the best interests of shareholders.”
Meanwhile the group released its financial results for the year ending 31st August, showing group pre-tax profit has increased 10% to £102m, up from £93m last year. Travel trading profit was up 11% to £63m and high street trading profit rose too, by 4% to £54m. Total sales at the chain though were down 2%, with like-for-like sales down 5%.
In line with its usual trend, the Travel arm performed better than the High Street, with total sales up 2% and like-for-like sales down 3%. Total sales in High Street by contrast were down 5% with like-for-likes also down 5%, although the company said this was “in -line with our strategic plan.”
The retailer praised strong publishing in children’s books, which saw the section improve sales year-on-year, but overall like-for-like sales in books fell by 7%. The company also said it annualised strong publishing in non-fiction from the previous year, but said fiction sales for the first half of the year were weak before the Fifty Shades Trilogy by E L James gave it a boost. The company added that it boosted gross margin on books year-on-year. “We saw encouraging share performance versus the general retail market across all three of the sub-categories, reinforcing the strength of our consumer proposition,” W H Smith said.
WHS also praised sales of Kobo e-reading devices from its stores after rolling out 100 “store within a stores” and said that its performance “continues to be ahead of plan” in terms of device and e-book sales. This week, Kobo’s Michael Tamblyn told The Bookseller sales of its new Kobo Mini and Kobo Glo devices which went on sale at the beginning of the month were so far performing well.
The company also announced it had made £12m of costs savings in the year and either opened or won 100 units in its travel arm.
Swann said: “Looking ahead, we expect the trading environment to remain challenging, however we are a resilient business with a consistent record of both profit growth and cash generation, and we are well positioned for continued growth in the UK and internationally."