WH Smith

Ticker SMWH

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As of 01:51 31 Mar 2020
Market cap. Pound sterling
1,218.49 million
As of 01:51 31 Mar 2020

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WH Smith shares dive after profits warning

WH Smith store on railway concourse
WH Smith

Shares in retailer WH Smith opened about 17% lower, although they've subsequently recovered some ground and are trading about 12% lower in mid-morning trade.

Earlier, the retailer whose travel division has outlets in airports and railway stations in Asia Pacific, the UK, Europe and the US, as well as its High Street stores, issued a sales and profit warning in the light of the potential impact of coronavirus on its business.

"You have to feel a little little sorry for a company that has done a brilliant job of pivoting away from the struggling British High Street to driving all its revenue and profit growth from airports and train stations," said Markets.com chief market analyst Neil Wilson. , .

"A rapid decline in footfall at travel sites because of the coronavirus is hitting revenues and will result in a material decline in profits this year. Trump’s 30-day European travel ban only makes things worse and threatens to make today’s estimates only partially reflective of the level of damage that could be done this year."

WH Smith: Coronavirus could reduce High Street footfall

Exterior of WH Smith shop
PA Media

More from the WH Smith trading statement now: The group said it was not seeing a "significant impact" on its High Street business as a result of coronavirus. However, it said it recognised that Covid-19 could result in "reduced High Street footfall".

As a result, the company is estimating it will take a hit of between £100m and £130m on revenue and between £30m and £40m on underlying Group profit before tax in the financial year to 31 August 2020.

"WH Smith is a resilient business with a strong balance sheet, substantial cash liquidity and strong cashflow. The group has a strong management team in place and has consistently demonstrated that it can adapt and respond quickly to changing market conditions.

"Over the longer term, the Board remains confident in the strategy and believes the Group is well positioned to benefit from the normalisation and growth of the global travel market."

WH Smith issues coronavirus profit warning

Exterior of WH Smith shop
WH Smith

WH Smith has issued a sales and profit warning in the light of the impact of coronavirus on its business.

It said it had been monitoring the financial impact of Covid-19 since the outbreak began across both its travel division, which includes airport and railway station outlets, and its High Street business.

In Asia Pacific, which accounts for about 5% of its travel division's revenue, it said it had seen a "significant impact on the business since February".

And over the last two weeks, it had started to see a "material reduction" in passenger numbers at airports outside of Asia Pacific. In the UK which accounts for about 60% of the division's revenue, the US, which accounts for about 25% of revenue and in Europe.

"For UK Travel, we expect revenue for the six months to be down approximately 15% on expectations which includes airports, our most affected channel, down 35% in March and April.

"On the same basis, including significant reductions in March and April, second half revenue in the US is expected to be approximately 20% lower than our expectations. The rest of our International business is also expected to be approximately 20% lower."

WH Smith High Street woes continue

WH Smith branch

WH Smith's stores in train stations, airports and hospitals are doing well but the retailer's High Street branches remain in the doldrums, it said this morning.

Sales climbed 7% in the 20 weeks to 18 January, but a 5% fall in revenues in its High Street division offset a strong 19% jump in travel.

Boss Carl Cowling said the integration of its new North American business Marshall Retail, which was bought for $400m (£312m), is progressing well.

Around 15 to 20 new stores are expected to be open in travel locations across the UK this year, including eight in hospitals.

On the High Street, the company continues cutting costs, with total savings for the year set to be around £12m.

Former WH Smith boss handed £3.4m farewell

WH Smith branch
Getty Images

Former WH Smith boss Stephen Clarke has been handed a £3.4m farewell pay packet by the retailer for the past year.

Clarke, who stepped down as chief executive at the end of October, saw his total pay for the year to 31 August jump by 18.6% from a £2.9m deal in the previous year.

His pay packet consisted of an annual salary of £568,000, up 3.2% from the same period last year, while his annual bonus rose by 10.7% to £908,000.

The overall pay-out means that Mr Clarke will receive 207 times the average wage, based on a median figure, of a WH Smith employee.

WH Smith announces takeover


WH Smith has launched a £155m share placing as it announces deal to buy Marshall Retail Group, which it describes as a leading and fast growing US retailer for £312m