(Alliance News) - WH Smith PLC on Wednesday reported good progress towards recovery on pre-pandemic times in the first half of its financial year to date, despite a "small impact" from the Omicron variant.
The Swindon, England-headquartered convenience retailer said that total revenue in the 20 weeks leading up to January 15 was 85% of the same period in the 2019 financial year. November was the strongest month during this period, bringing in 90% of 2019's revenue.
The emergence of the Omicron variant in December slowed what was a "consistent and encouraging" recovery prior to that, with the month making 85% of 2019's December revenue.
Its Travel UK revenues were 70% of 2019 levels in the period, with hospitals leading at 89%, but air travel revenue lagging at just 58% of 2019. WH Smith said the relaxation of the testing regime for arriving passengers would be "welcome".
Total travel revenue was lifted to 83% of 2019, by success in North America at 92% of 2019 revenue in the financial first half.
High Street revenue was 87% of 2019 for the 20 week period, meeting the retailer's previous expectations, despite reduced footfall. This was aided by good stock availability over the Christmas period. The company's cost savings target for the full year to end in August are on track, and its gross margin has improved.
WH Smith reports cash generation ahead of plan for the 20 week period, with liquidity of GBP345 million as of December 31.
WH Smith's share price rose by 5.5% to 1,637.00 pence each in London on Wednesday morning.
"In Travel, we have focused on our strategic objectives of increasing customer conversion, growing average transaction value and winning new space, all of which continue to deliver good results. We have now opened 16 of the recently won InMotion technology stores in UK airports and are pleased with their performance. Our strong track record of winning new tenders in the US continues, with a significant nine store win at Kansas airport," said Chief Executive Carl Cowling.
"Our High Street business performed well, in line with our expectations, with our online businesses delivering strong performances."
Looking ahead, the retailer has a strong pipeline with 99 new stores won and due to open in the coming three years, having opened 30 new stores during this 20 week period. It predicts its Travel business will undergo further recovery, subject to no further restrictions.
WH Smith will publish its interim results on April 27.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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Wh Smith (SMWH)