UK. WHSmith’s travel operations, which includes airports, rail, hospitals and all international stores, have outstripped its high street business for the first time, recording +9% revenue growth for the year ended 31 August 2017, making it the largest part of the business in both revenue and profit.
The travel business’s profit reached £96 million, an increase of +10% from £87 million at the end of August 2016, the company reported in its preliminary results. The books and convenience retail giant’s high street business reported a static trading environment with profits totalling £62 million, the same as last year.
WHSmith Group Chief Executive Stephen Clarke, who will be speaking at this year’s Trinity Forum in Bangkok, said: “We have delivered a good performance across the Group. The travel business continues to perform well with strong revenue growth, up +9% in the year. For the first time, revenue in travel has overtaken high street and travel is now the largest part of the Group in both revenue and profit. Profit in travel is up 10% to £96m, now over 60% of Group trading profit.
“During our 225th anniversary year, we were delighted to open our 225th international store and now have 233 stores open. We have won 273 stores across 25 countries, including new stores in Singapore and Rome.
“The high street business performed well – matching the particularly strong profit performance from last year. Our investment in new product design continues to drive stationery revenue and we have been pleased with the success of the recently launched Tom Fletcher Kids Book Club.
WHSmith will continues to invest in stores in the travel division and develop the range. A total of 15 new stores opened in the UK travel sector in the 12 months to 31 August 2017, it stated in its preliminary results announcement presentation. WHSmith aims to leverage brand and travel expertise to grow its international business in travel retail — 41 new international units were won in the year, including Singapore Changi International Airport and others in Italy, and the company now operates 233 international units.
Large Airport Stores
WHSmith reported in airports, larger stores deliver significantly higher sales per passenger. The company said improving circulation drives customer conversion, and it has developed a new large store format to address these opportunities. The first store opens in Gatwick Airport in November and in Stansted Airport this autumn. WHSmith is in discussions with landlords for more large stores across the network.
WHSmith identified ‘International Travel’ as a large, growing market in which the company is still a small player with good growth potential. The aim in the channel is short-term investment for long-term future growth. “Our broad customer offer and sales per pax are attractive to overseas landlords,” the company said in the presentation.
Clarke added: “The Board has proposed a 10% increase in the final dividend and we have today announced a further share buyback of up to £50m reflecting the Group’s cash generation and our confidence in the future prospects of the Group.
“This performance is only possible through the hard work and commitment of our 14,000 colleagues across the business and I am grateful for their continued support.
“Looking ahead, we will focus on profitable growth, cash generation and new opportunities to profitably invest in the future. While the economic environment remains uncertain, we are well positioned for the current year and beyond.”