WH Smith shares rise as company returns to pre-pandemic revenues

WH Smith shares were up 5.8% to 1,438p in early morning trading after the company announced that it achieved group revenue ahead of 2019 levels for the first time at 107% for the 15 weeks to 11 June 2022.

The company reported strong performance in its travel sector, with a 123% boost ahead of 2019 rates for the same period.

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UK travel was at 104% of 2019 levels, with North American travel at 111% and the rest of the world at 88% of pre-pandemic levels.

WH Smith mentioned that UK channels saw 114% growth in air travel, a 102% climb in hospitals and an 87% volume in rail against 2019 levels.

“This is a solid and promising trading update from WHSmith, with the retailer trading ahead of 2019 revenue with a particularly strong performance from its travel division, reflective of the lifting of COVID-19 restrictions,” said Edison Group director of research Neil Shah.

“Group revenue in the 15 weeks to 11 June 2022 was up on 2019 levels for the first time at 107%, with sales across key travel markets recovering as passengers return to the skies and airports benefit from heavier footfall.” 

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The firm commented that its UK business grew as a result of its enhancement of ranges and development of its categories, including health and beauty and technology.

The company confirmed its recently launched InMotion stores across UK airports were performing well.

WH Smith announced a high street revenue at 79% of pre-Covid-19 rates, including the cyber incident on Funky Pigeon. However, the Platinum Jubilee drove customers to outlets, with the group’s front-of-store mega deals securing strong results.

“The high street division performed down on 2019, at 79%, with its Funky Pigeon business suffering from a cyber attack in April which resulted in the suspension of trading and order cancellations,” said Shah.

“Nevertheless, the retailer continues to capitalise on key diary events, with its Platinum Jubilee ranges delivering good sales.”

The firm mentioned that the broader macroeconomic outlooked remained uncertain, however it was well-positioned to take advantage of the wider market recovery in 2022.

WH Smith confirmed 125 stores in its pipeline, with new store formats and category development across multiple territories.

The company currently expects travel to continue strongly moving towards summer into the peak trading period, with an anticipated FY 2022 to beat analyst expectations.

“Looking ahead, WHSmith is optimistic and well positioned to capitalise on the ongoing recovery across key markets. With 125 new stores won but not yet open, the retailer will look to capitalise on the opportunities this growth presents, while a strong performance across travel during the peak summer months should result in high sales,” said Shah.

“The strong financial performance leaves the Group well placed to continue to drive progress despite the ongoing macro-economic uncertainty.”

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