WH Smith has delivered strong first half results, with profit and earnings up double-digits and an improvement in high street sales.
But investors appeared unimpressed: WH Smith's share price was down 4.1 per cent in morning trading.
The stationer reported group pre-tax profit of £80m for the six months to 29 February, up 11 per cent from the same period in 2015. Diluted earnings per share were up 13 per cent to 57.4p.
Travel trading profit was up nine per cent to £35m, while high street trading profit climbed six per cent to £53m, taking group total up seven per cent to £88m.
Why it's interesting
The group - which has already raised its full-year profit guidance - appears to be having a run of better performance than its recent past.
Encouragingly, high street like-for-likes were flat over the period, marking WH Smith's "best performance in years", thanks to a particularly strong Christmas.
It comes on the back of an improved full year performance last year, in which adult colouring-in books were singled out a huge trend. "Colour therapy", as WH Smith refers to it, continues to be a huge driver of sales.
What WH Smith said
"The travel performance reflects our ongoing investment in the UK business and growing passenger numbers while internationally we have now secured over 200 stores, including our first airport shops in Spain and Germany," Stephen Clarke, group chief executive, said. "In high street, the flat like-for-like sales - our best performance for many years - were driven by a very strong performance of seasonal products over the key five week Christmas period.
"Stationery sales were particularly strong, driven by investment in new product ranges and both our stationery and books business continue to benefit from strong sales in adult activity books, such as colour therapy, extreme dot-to-dot and querkles.
"The strong performance is only possible through the hard work of the entire team in all parts of our business. I am very grateful for their support. Looking ahead, we will continue to focus on profitable growth, cash generation and investing in the business to position us well for the future."
What analysts said
"The WH Smith investment case continues to evolve," said analysts at Peel Hunt.
"The interims were solid (no upgrade to our top of the range numbers) but there are reasons to be very interested in both silos’ prospects here.
"On the high street, investment into service aided like-for-like growth and winning 60 Post Office contracts is a major coup. Travel profit delivery was strong but international is key to the valuation and management is delighted to have won contracts in Germany and Spain.
"The shares are not cheap but have a genuine growth angle and we upgrade our target price to 1,900p."
WHSmith continues to propel itself from its period of underwhelming performance.