WHSmith has revealed full-year pre-tax profit ahead of expectations, increasing 6% to £108m in the year to August 31.
But the stationery and bookseller’s total sales dropped 5% from £1.24bn to £1.19bn and like-for-likes also fell 5%.
In the period WHSmith generated a 4% increase in trading operations to £122m. The travel stores recorded a “good” performance with trading profit up 5% to £66m on flat sales, while like-for-likes fell 4%. High street stores delivered a 4% increase to £56m as total sales slumped 7% and like-for-likes dropped 6%.
WHSmith revealed that gross margin had improved 180 basis points and it has net cash of £31m. It added that the “strong” performance will mean a final proposed dividend up 15% to 21.3p and a further £50m share buyback following one last year.
WHSmith group chief executive Stephen Clarke said: “We continue to deliver on our strategy with a strong performance and good profit growth in both businesses. The group remains highly cash generative, enabling us to invest in our businesses and in new opportunities, whilst returning cash to shareholders, including a further £50m share buyback announced today.
“Looking to the year ahead, we continue to plan cautiously in an uncertain environment. However, we are a resilient business and are well positioned for continued growth in both the UK and internationally.”
WHSmith said it has increased its target cost savings to £22m in the next three years.
In the year WHSmith opened 30 new travel stores in the UK, including two Funky Pigeon and two Zoodle stores, taking the UK travel estate to 579. The retailer made “good progress” with its international travel stores, securing 40 shops in the year, bringing the total overseas estate to 141 shops with 47 yet to open.
It added that in the UK it has partnered with M&S Simply Food and convenience food supplier Musgrave, which owns Londis and Budgens, to strengthen its travel offer.
WHSmith opened four UK high street stores in the year, taking the total to 615. It revealed it has bought the ModelZone brand, after the retailer fell into administration earlier this year. The deal comes after it bought Past Times in April.