WH Smith slips despite lifting profit and dividend

Total group profit at stationery store WH Smith (SMWH) rose in the year to end-August, helping the FTSE 250-listed firm up its dividend by 16% - despite a drop in sales.

WH Smith posted total group pre-tax profit of £93 million for the 12-month period, up from the previous year's £89 million.

However, shares in the firm were down over 3% at 514p in early-morning trading.

Like-for-like sales were down 5%, while its gross margin improved by 150 basis points, thanks in part to a record profit performance from its travel operations.

Travel's record showing came "despite continued soft passenger numbers and the tough economic climate", delivering pre-tax profit of £57 million, which compared to a 2% rise to £52 million in its high street business. International travel now has 60 sites, with 13 new ones identified on Thursday.

Cost savings in high street delivered £3 million ahead of plan and the company identified a further £11 million, bringing the total cost saving to £25 million.

The firm proposed a 15% rise to 15.3p for its final dividend, taking the total ordinary dividend per share to 22.5p - a 16% increase year-on-year.

It also reiterated the ongoing £50 million share buyback scheme, which has seen £2 million of cash returned to shareholders as at 12 October.

"The economic conditions remain challenging, however we have planned accordingly," commented chief executive Kate Swann. "We are a resilient business with a strong and consistent record of both profit growth and cash generation and have opportunities for growth in both the UK and internationally."

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