WH Smith to buy back shares

Thu 15 Oct, 2009 06:27

LONDON (Reuters) - Newspapers, books and stationery retailer WH Smith (SMWH.L) posted an 8 percent increase in full-year profit and said it was "well positioned" to benefit when consumer spending recovers.

"Whilst trading conditions are challenging, we have planned accordingly," said Chief Executive Kate Swann.

The 217-year-old firm, which trades from over 560 high street stores and nearly 500 outlets at airports, train stations, hospitals and motorway service stations, also said it would return 35 million pounds to shareholders through a share buyback programme.

WH Smith said it made a profit before tax and exceptional items of 82 million pounds in the year to August 31.

That compares with analysts' consensus forecast of 81.4 million pounds, according to Thomson Reuters I/B/E/S, and 76 million pounds in the previous year.

Total sales fell 1 percent to 1.34 billion pounds, while like-for-like sales fell 5 percent, but gross margin improved 220 basis points.

The firm said it has identified a further 14 million pounds of cost savings.

A final dividend of 11.3 pence was proposed, up 16 percent on the prior year.

Shares in WH Smith have increased in value by 22 percent over the last six months, outperforming the FTSE All Share General Retailers Index by about 4 percent.

The stock closed Wednesday at 487 pence, valuing the business at 764 million pounds.

(Reporting by James Davey; Editing by Hans Peters)