UK. WHSmith today revealed results for the six months ended 28 February, with its Travel division performing strongly. Revenue from the Travel business climbed by 18% year-on-year (3% like-for-like) to £364 million and 8% excluding the acquisition of US airport retailer InMotion last year.
Travel, which generates over 70% of annual group operating profit, delivered a 7% rise in trading profit to £44 million, of which £6 million related to the growing international business (including InMotion).
Gross margin, excluding InMotion, was up 40bps compared to last year.
The company said in a statement: “We continue to invest in the business and in the UK we are on track to open around 20 new units this year. Our International business (including InMotion) is growing fast. We have won a further 21 new units since the start of the financial year including further units in Europe, Australia, the Middle East and InMotion units inside and outside of North America.”
As of 28 February the company had 425 units open internationally. During the period, InMotion contributed operating profit of £2 million and revenue of £30 million.
In UK Travel, revenue was up 4% with like-for-like revenue up 3%. In air, total revenue was up 5% with like-for-like revenue up 4% while in rail, total revenue was flat with like-for-like revenue up 1%.
In International Travel, revenue for the half, including InMotion, was £104 million, up 76% versus the previous year. Like-for-like revenue was up 4% on a constant currency basis. Trading profit for the half was £6 million, including £2 million profit from InMotion. Excluding InMotion, profit from International was £4 million although this included “a challenging performance” from Madrid Airport, where the retailer has a short-term contract due to airport redevelopment. In total, WHSmith won contracts for 21 new units outside the UK in the half.
Commenting on the potential for InMotion, WHSmith highlighted the opportunities to grow the market for digital accessories; to scale up the WHSmith airport format into the region and to accelerate expansion of the InMotion format outside the USA.
CEO Stephen Clarke commented: “The group has delivered a strong performance in the first half of the financial year. In Travel, we continue to see strong sales growth, driven by our investment and initiatives in our UK business and our growing international businesses.
“The integration of InMotion is progressing well. This acquisition doubles the size of our business outside of the UK where we are now present in 99 airports and 30 countries. We won a further 21 units in the period, including two InMotion units in Australia and Spain, highlighting the potential of this business outside of the US.”
