General merchandise retailer WHSmith's foreign business is still suffering in the aftermath of September 11, but there is 'real momentum' in the UK, according to the retailer.
The store group, which released preliminary figures last week, also said it had been hit by a higher than expected pension charge.
Like-for-like sales at WHS's 736 British stores increased by 4 per cent in the year to August 31. DVDs, news and magazines performed well. Overall sales in UK Retail were up 6 per cent to£1.5 billion.
For the six weeks to October 12, comparable UK Retail sales rose 1 per cent against a tough comparative of 9 per cent for the same period last year.
UK Retail managing director Beverley Hodson said: 'The last six weeks are a relatively quiet period for us following the busy back-to-school period.'
She said WHSmith is entering its busiest weeks and that next month there will be big promotions, such as a two books for£10 offer.
However, pension charges have become an issue. Under accounting standard FRS17, pension charges will be restated this year from£0 to£5 million and are expected to hit£16 million next year.
The US travel retail business still faces a tough environment. 'Operational progress across the group has been overshadowed by a material loss in the US business,' said group chief executive Richard Handover. Sales in the US fell 12 per cent to£216 million.
Group sales were£2.9 billion. Pre-tax profit was down 8 per cent to£122 million.