WHS profits as high street sales fall

<p>W H Smith&#39;s main high street chain grew its book sales by 1% thanks to Harry Potter, according to results put out this morning. The W H Smith group also reported a 29% leap in profit before tax and exceptional items to &pound;66m, beating most analysts&#39; expectations.</p><p>Group revenue decreased from &pound;1.34bn to &pound;1.3bn in the year ended 31st August, as the business focused on profitable sales, in what it called a &quot;tough trading environment&quot;. The like-for-like sales decline over the year was 4%.<br /><br />High Street sales dropped 6% to &pound;961m. WHS said that it had continued to focus on rebuilding its &quot;authority as a popular book specialist and maximising profitability&quot;. It added: &quot;Improvements to category planning and management have delivered good results, notably through improved ranges, innovative promotions and a focus on specific genres, such as kids.&quot;<br /><br />The high street delivered a profit increase of 5% to &pound;44m, which WHS said was in line with expectations: &quot;We continued with our strategy to rebalance the mix of the business. Markets were as challenging as we expected in the first half, but we benefited in the second half from the publication of Harry Potter, the poor summer weather and the absence of a major sporting event following the 2006 World Cup.&quot;<br /><br />Total sales in the travel shops were up 6%, or 2% on a like-for-like basis, with the growth driven by new business development gains and its expansion into the motorway service area market. The travel shops saw profit increase by 16% to &pound;36m. &quot;This was achieved as a result of increased sales combined&nbsp; with improved gross margin and tight cost control,&quot; WHS said.<br /><br />Kate Swann, group chief executive said: &quot;We have delivered another year of strong profit performance, with group profits up 29% and strong free cash flow of &pound;81m. Our Travel business grew strongly, and our High Street business made further progress in line with its plan. In an uncertain consumer environment, we expect the key Christmas season to be very competitive, however we have planned accordingly.&quot; <br /><br />According to Reuters, Kate Swann told reporters on a conference call that she does not expect to see like-for-like sales growth at its high street stores for at least two years.<br /></p>