WH Smith’s profits rose 4% in the year to 31 August, helped by record profits from its travel division.
Group pre-tax profits came in at £93m, compared to £89m last year. Group profit from the company’s trading operations rose 5% to £109m.
The performance was driven by a strong showing from the travel retail business, where operating profit rose 8% to £57m. The high street business also grew profits, although more slowly, up 2% to £52m.The company increased the dividend 16% to 22.5p a share.
At the results presentation chief executive Kate Swann revealed WHSmith expects to see its travel outlets increase “well into the hundreds” across the next five years.
But speaking after the announcement high street managing director Stephen Clarke said: “International growth will consist of 25 stores over the next year, which will create 60 in total.
“We will continue to look for further opportunities where appropriate but the pace at which we roll out is largely determined by when spaces become available.”
Retailers have to bid for units within travel terminals, where competition for space is fierce.
The rise in profits came despite a fall in total sales, which were down 3% to £1.27bn. Like-for-like sales were down 5%. Overall sales in the travel division grew 1% to £455m but were down 3% life-for-like reflecting lower passenger numbers. High street total sales were down 5% in total and 6% like-for-like, although the decline was only 3% if entertainment is excluded.
The company continues to open new stores, with 35 travel store opened during the year and another 35 scheduled to open this year, including a further five for its Funky Pigeon cards brand following the opening of the first four. The company now has 60 international travel stores.
The high street business opened 39 stores during the year, most acquired from the failed British Bookshops chain, taking the total to 612.The high street busines delivered £14m of cost savings during the year, £3m ahead of plan, and a further £11m of savings have been identified over the next three years. The company said the book market continues to be soft but that it will launch WiFi e-reading devices with access to 2.2 million titles from October.