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(Alliance News) - WH Smith PLC on Thursday said that the Covid-19 pandemic has continued to hurt business, but it is seeing improved trends in its Travel arm, where it is adding airport locations for its InMotion brand of technology stores.
The books, magazines and stationery retailer said its pretax loss in the financial year that ended August 31 narrowed to GBP116 million from GBP280 million the year before, as revenue decreased by 13% to GBP886 million from GBP1.02 billion. Revenue in the recent year amounted to 62% of pre-pandemic revenue in 2019.
The company said that the pandemic continued to "significantly impact" the business across markets. The Travel arm suffered the most in the past year, recording a trading loss of GBP44 million, widened from GBP27 million in financial 2020. More positively, WH Smith's High Street stores swung to an annual trading profit of GBP36 million from a loss of GBP4 million.
WH Smith adopted a "flexible" approach to operating its stores due to the imposition and then easing of lockdowns and restrictions. The retailer only opened stores when it had "had sufficient customer traffic to generate incremental cash or, in line with government guidelines, remaining open to provide essential products and services to our customers."
As of October 31, WH Smith had 1,540 stores open around the world out of a total portfolio of 1,711 stores.
WH Smith said it won't be paying a dividend for the recent financial year. The company paid a 58.2 pence per share dividend for financial 2019 and hasn't paid one since. It said Thursday that its capital allocation policy remains to prioritise investment in its existing business, followed by re-establishing a dividend, making acquisitions, and, lastly, conducting share buybacks.
WH Smith said that it is making good progress in gaining spaces in travel locations in the UK, North America, and the rest of the world. It noted it won 30 new stores in UK airports for its InMotion brand, including at London Heathrow, Gatwick and Stansted. This adds to 117 stores under the brand in North America.
WH Smith said it currently is the preferred bidder for two InMotion stores at Dublin Airport.
"We have also made good progress investing in our existing stores, opening new formats and winning new business. We anticipate further growth opportunities across all our markets. All this puts us in a robust position to continue to recover and emerge operationally stronger from the pandemic," WH Smith said.
WH Smith said that it is "optimistic" of its ability to achieve 2019 sales levels in the current financial year. The company recorded GBP1.40 billion in revenue in financial 2019.
Shares were down 2.5% at 1,575.50 pence on Thursday midday in London.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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