WHSmith considers increasing presence in overseas airports

The retailer, which last week revealed a better than expected 5 per cent dip in first-half profits, is considering adding to its existing international airport stores in Copenhagen and Shannon, Ireland, which it opened this year.

Sources close to the retailer said it is “very early days” for these shops and that WHSmith is “trialling different ways of running its stores”.

It is thought the retailer is examining the cost and potential of opening stores more widely in Europe, as well as outside the continent, although any expansion would be small scale to begin with. In the second half, WHSmith plans to open a further 24 travel stores and six high street stores in the UK.

The retailer is also in the process of rolling out the pick ’n’ mix offer that it launched after Woolworths’ demise to 200 stores.

Pre-tax profit dropped to £61m in the six months to February 28 and group operating profit was flat at £67m. Group sales were also flat at £731m, and like-for-likes fell 5 per cent. High street like-for-likes dropped 6 per cent and travel fell
1 per cent.

Gross margin improved 170 basis points. Half the margin growth came from the retailer’s continued focus on stationery, books, newspapers and magazines while shifting away from entertainment products, which slumped 33 per cent on a like-for-like basis.

WHSmith chief executive Kate Swann said: “Our markets remain challenging. However, we have planned accordingly and are confident in the outcome for the year.”

Singer Capital Markets analyst Matthew McEachran said: “The business is well managed and the low-ticket defensive product offer, the continued growth potential in the travel business and the margin/cost-led strategy offers a resilient platform. Strong cash generation and a strong balance sheet are also key positives. Full-year numbers are likely to edge up from £78m to £80m.”

Investec analyst David Jeary said the retailer had “again produced a solid set of results”. He said there is “substantial potential in hospital stores – WHSmith has less than 100 such shops at present but sees potential for 1,000.