UK. WHSmith today said that revenue from its Travel division fell by -91% year-on-year in April, with total group revenue down by -85%. The company provided a trading update as it reported first-half results to 29 February.
Addressing the impact of COVID-19, the company noted that most stores at airports and railway stations in the UK Travel business are closed, with passenger traffic down sharply due to travel restrictions. This picture is mirrored in the International business with all stores closed at major airports.
The company said that its online business has performed well, with book sales delivering a +400% increase in year-on-year sales in the past month.
Commenting on potential recovery scenarios, WHSmith said: “In Air, we expect a gradual improvement in passenger numbers from Autumn 2020; initially led by an increase in domestic travellers, particularly in the US where 80% of passengers are domestic, followed by regional, international and intercontinental passengers.”
The company said it remains committed to a phased reopening of stores in H2 and to investing in large flagship shop formats across the UK and North America.
For example, it said, it still plans to a major re-fit of its 5,000sq ft store at Heathrow Terminal 2 this Summer. This will feature news, books and convenience with the addition of a health and wellbeing department with specialist staff.
Travel delivered a strong performance in the six months to 29 February. Trading profit increased by +11% to £49 million, of which £9 million relates to the international business including Marshall Retail Group (MRG) and InMotion. Travel revenue was £432 million, up +19% compared to last year and up +2% on a like-for-like basis. Gross margin, excluding MRG and InMotion, was up 110bps compared to last year.
Group Chief Executive Carl Cowling said: “There was very little impact of COVID-19 on our first half results, however inevitably the performance in the second half will be very different.
“Since March, we have seen a significant impact on our business, with the majority of our stores closed around the world. We were fast to react to the situation and issued new equity via a placing, raising c.£162 million on 6 April. We also secured an additional £120 million of bank funding.
“We are a resilient and versatile business and with the operational actions we have taken including managing costs and the new financing arrangements, we are in a strong position to navigate this time of uncertainty and are well positioned to benefit in due course from the normalisation and growth of our key markets.”
