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The market analyst reaffirmed its 2013 full-year results forecast of £106.9m (consensus £105.8) rising to £113.4m (consensus £111.3m) in 2014. It also reiterated its 'buy' recommendation and 750p price target. Ahead of the trading update, forecasts suggested the retailer would report decline in like-for-like sales with as much as 5.0% at its High Street stores. Nevertheless, WH Smith's shares rose more than 5.0% Tuesday after Numis upgraded the stock to 'add' with a target price of 710p.
As part of its aim to return up to £50m of cash to shareholders via a share buyback programme, the group purchased 2.48m shares at an average price of £6.38. "During the period we saw a good profit performance across the group. Margin was well managed and costs were tightly controlled throughout the business," Group Chief Executive, Kate Swann, said. "Looking ahead, we expect the trading environment to remain challenging however we are a resilient business with a consistent record of both profit growth and cash generation, and are confident in making further progress in the year." Swann announced in October 2011 that she would step down as chief executive in July 2013. Steve Clark, who joined WH Smith in 2004, will take over from Swann. Seymour Pierce Research commented on the results saying the company delivered a "reliant Christmas as management continued to focus on profitability rather than sales."
British retailer WH Smith met analysts' forecasts Wednesday as it reported a decline in sales for the holiday season. The FTSE 250 company, which sells stationary, newspapers and books, said total sales were down 4.0% and like-for-like sales tumbled 5.0% for the 20 weeks to January 20th, according to trading update. A majority of fall came from the group's High Street stores where sales dropped 5.0% and like-for-like sales declined 5.0%. However, gross margin improved in the period in line with plan and costs were tightly managed, reflecting the trading conditions, according to the group. The retailer added that it delivered good profit performance in the period with a margin well managed. WH Smith ended the period with a strong balance sheet despite the sales drop.
WH Smith: Panmure Gordon increases target price from 584p to 700p, while its hold recommendation remains unaltered. Bank of America raises target price from 725p to 775p and keeps a buy rating.
Like many other retailers, these are being targeted by the big hedge funds for shorting. http://www.fsa.gov.uk/static/international/short-positions-daily-update.xls
Thanks for your comments. I feel in the last ten years this company has been like a car driving on a very bad road full of potholes and has had to be fully alert to avoid them and so far has been successful thanks to Kate Swan. The fate of this company is really at the hands of who is driving the car. This is certainly a job very few people could do successfully. Time will indeed tell here.
I think that when you analyse HMV you can identify that it ended up with the wrong product mix right as the internet started to dominate. A large debt ratio and the inability to move quickly enough is what took them out. Argos on the other hand, had to compete with the likes of Tescos on price and I feel lost out due to the retail experience it provides. It's share price should come back however as it is a major internet player with one of the highest hit rates in the UK. WH Smith on the other hand, does not fit with your theory that it must transform from Bricks to Clicks. It sells magazines, books and chocolates predominantly to travellers as they pass through an airport or train station. I don't see it's customer base going into a smith shop and then walking out the door and ordering it on line. It's very much orientated to the impulse purchase. Time will tell
Theoretically, one would expect it to be the the be the ''next HMV'' , but in prcatice, that ai'nt going to happen sometime soon. However, with HMV shares at under 2p today, one cannot help asking the question, how on earth were they £1.60 a year or so ago? I appreciate WH smith has little debt, but it may find it difficult to move from ''bricks to clicks'' which is what has hit argos and many others. If I had to guess, I woud'nt be surprised if the SP collapsed, when? I coud'nt say. I wou'dnt ''touch it with a bargepole''
WH Smiths has been around for many years. And over those years has made a few changes. If you look at its fundamentals it is in a strong position. It has little to no debt, It has grown its net profits at 14% a year for the last 7 years and is throwing off substantial amounts of cash every year . It has been buying back shares which can be positive to the share price or negative. In this case I feel it is a positive move as it has no other beneficial purpose to keep the funds in their account. Although I don't think it is buying them back at a bargain price. Kate Swan has done an exceptional job over the last few years although the down side is she is moving on later this year. We don't know yet whether the new CEO will do a good job or ruin all her work The travel side of the business is growing and margins are being eeked higher through concentrating on selling higher margin items and keeping costs under control. It is concentrating on expanding the travel side abroad and I feel this is its strongest opportunity to grow the business. It is giving share holders a 4% ish dividend which is reasonable. I feel that the long term view is positive although at today's price I think it is a full price. if for any reason the shares should drop by a reasonable amount I would buy some more.
From time to time this share has fascinated me by its ability to remain robust when other high street businesses have been dropping like flies. Personally I think its presence in places like airports and railway stations helps enormously and i always find myself going into its stores to make impulse purchases before my train leaves. But could this business some time in the future join the pack and go down too? I welcome other peoples opinions regarding this. Oh and I wish everyone a happy and prosperous new year. Thank you
Smith (WH): UBS downgrades to neutral with a target price of 700p.
WH Smith: Deutsche Bank raises target price from 650p to 700p and reiterates buy recommendation.
Newsagent chain WH Smith has got off to a subdued start to its new financial year, with sales down year-on-year, though margins continue to harden. Total sales in the 10 weeks since September 1st were down 3% year-on-year, while like-for-like (LFL) sales were down 4%. The group has become used to sales drifting lower, however - in the last financial year LFL sales were down 5% - and has been concentrating on boosting margins. WHSmith Travel, the division that runs the group's newsagents in airports, stations and bus depots, saw flat total sales while like-for-like sales were down 4%. Gross margin has increased in line with the board's plan and the store opening plan continues to make good progress both in the UK and internationally. WHSmith High Street total sales and like for like sales were down 5% in the period. Again, gross margin has increased in line with expectations and costs continue to be managed tightly. The group's financial position is in line with market expectations, the statement revealed. "Whilst the current climate continues to be challenging, we remain a resilient business and are well positioned for continued profitable growth," WH Smith said.
Commenting on the results, Kate Swann, Group Chief Executive said: "We have delivered another strong performance across the Group with EPS up 22% in the year. In Travel we have grown profit by 11% and have made further good progress in our international channel, with over 100 units either open or won. In High Street we saw another resilient performance, with profit up 4% and continued strong cash generation. "The Group remains cash generative enabling us to invest in our businesses and in new opportunities, whilst returning cash to shareholders. We are recommending to increase the final dividend by 22%, which is in addition to the £50m share buyback completed last year and the further £50m announced in August. "Looking ahead, we expect the trading environment to remain challenging, however we are a resilient business with a consistent record of both profit growth and cash generation, and we are well positioned for continued growth in the UK and internationally."
http://www.investegate.co.uk/Article.aspx?id=201210110700044360O
High street retailer WH Smith (SMWH) announced pre-tax profits of 102 million pounds for the year ended 31st August, up 10% on 2011's performance, driven by its travel division, which now has 619 units. The firm noted that it generated free cash flows of 91 million pounds and finished the period with a net cash position of 36 million pounds. The group added that it has identified a further 12 million pounds of cost savings in addition to the 17 million pounds it has already achieved. However, WH Smith shares fell by 18p to 634p after the company announced that CEO Kate Swann will step down from her position, after nine years, on 30th June next year. She will be succeeded by Commercial Director Steve Clarke.
Questor, the share tips column in The Telegraph, cast its eye over centuries-old High Street retailer WH Smith which saw shares rise to a six-year high yesterday after revealing that full-year results would be at the top end of expectations. The firm attributed its strong performance to margin gains in Travel and the improving sales trend of books on the High Street. The group also announced a share buy-back programme worth £50m. "As for future growth, Questor thinks the market is under-playing the potential of the group's Travel business. This offers the real prospect of expansion into new territories where there is a high footfall, which is perfect for WH Smith's relatively low-ticket items," the paper said.
Somewhat to the market's surprise, WH SMith has even revealed that its High Street stores has seen an improvement in the sales trned of books, following the recent positive publishing schedule. In this e-book age where Amazon calls the shots, this sort of revival was not supposed to happen. It can't all be down to the popularity of 'Fifty Shades of Grey'... Looking back, the group's decision to get out of the music and DVD business looks like a well-timed and well-executed strategic decision, while the group's historic focus on travel hubs continues to hold it in good stead. Train fares rising much faster than inflation might be a concern but the train companies have commuters over a barrel, and until remote working becomes more of a feature of office life, WH Smith is likely to continue enjoying lots of passing trade generating impulse purchases.
Shares in newsagent chain WH Smith reached an all-time high on Thursday as the company raised profit guidance for the year and announced a new share repurchase programme. The company, which has returned £377m to shareholders through dividends and share buybacks since the end of August 2007 has earmarked another £50m to repurchase shares for cancellation between September 1st 2012 and August 31st 2013. While other retailers with overlapping product lines such as Woolworth, HMV and Borders have either gone to the wall or struggled on in reduced circumstances, WH Smith has hung in there, churning out cash, cutting costs and concentrating on improving margins rather than chasing sales. The doubters are still out there, however. "While the formula of falling like-for-like sales as the product mix shifts, rising gross margins and reduced costs has been enormously shareholder value accretive, it is not sustainable in the long run," said Panmure Gordon, which rates the shares as a hold. The broker is expecting sales to pick up on a 12-month view. "The board expects the outcome for the year to be 'at the top end of market expectations', which suggests around £100m pre-tax, compared with our forecast for £97.6m," Panmure Gordon analyst Philip Duggan speculates. Duggan took the hint and nudged up his full-year forecast to £100m.
Seymour Pierce reiterated its "buy" recommendation for WH Smith (SMWH) with an increased target price of 670p, from 570p. The broker noted that the high street retailer has returned over half its market value to shareholders over the last five years. Seymour Pierce added that the group's business model is becoming more flexible as its travel division accounts for a larger portion of profits, while the high street division is benefiting from consolidation in the sector. The shares inched up by 2p to 574p.
WH Smith, the High Street and travel hub newsagent chain, saw like-for-like sales dip at the start of the second half of its financial year, but the shares rose as the group revealed margins are up.
Investec Securities reiterated its "buy" recommendation for WH Smith (SMWH) with an increased target price of 615p, up from 528p. The high street retailer achieved 3% pre-tax profit growth in its first half to 66 million pounds, with the broker noting strong cash generation of 63 million pounds and a 15% increase in the dividend. Investec sees the company's Travel division as its primary source for growth as markets recover. WH Smith shares declined by 9p to 533p.
Jeff Harris, a Non-Executive Director at WH Smith, purchased 10,000 shares in the stationery and book retailer on Friday, one day after the firm’s interim results. Harris, currently the Chairman of FTSE 250 speciality plastic and fibre products supplier Filtrona who joined WH Smith’s board in June of last year, paid 533p per share bringing the total transaction value to £53,300. Following the purchase, he holds a 0.008% stake in WH Smith. On Thursday, the group reported that like-for-like (LFL) and total sales fell in both its main divisions in the six months to the end of February but profits were up. Total sales were £665m (2011: £686m) with LFL sales down 5%
The Telegraph's Questor column has cast an eye over stationery and books group WH Smith, saying that while revenues are falling, profits have risen and the balance sheet remains strong. The paper notes that the share have underperformed the wider market this year by 14% and are trading at a discount to the sector of about 20%, which it says is "unwarranted". With its cash-generative qualities - seen in the the ongoing buy back and better-than-expected dividend - Questor recommends to buy.
Kate Swann, Chief Executive of WH Smith, the books and stationary retailer, has sold a sizeable chunk of her stake in the firm to raise capital to buy herself more property, according to a company spokesperson. Swann, who is widely held responsible for turning the company around since her arrival in 2003, sold off 425,000 shares at 550.74p each, for a total of £2.34m. The sale equates to 40% of her previously owned stake. She now holds 0.47% of the firm's shares and remains the largest single shareholder.