Shares in retailer WH Smith slumped more than 13 per cent in trading today, after its preliminary annual results revealed plans to restructure its high street business amid a challenging trading environment.
Its share price fell to a low of 1,748p this morning, crashing down from its opening price of 1,963p.
The group said that while its profits on the high street was its third highest in 15 years, the retailer will be winding down some non-core initiatives including WH Smith Local and its greetings card chain Cardmarket.
It will also restructure some of its operational activities, and close around six high street stores.
In the financial year ending August 2018, WH Smith's group revenue rose two per cent overall to £1.26bn, up from £1.23bn in 2017. This was largely powered by an eight per cent growth in revenue at its travel locations, while high street losses led to a three per cent decrease year-on-year.
Richard Hunter, head of markets at Interactive Investor, said: "The high street business remains a thorn in the side, with revenues and trading profit both down. Cost savings and a sharp focus on margin management are the main constituents of a defensive strategy as the wider retail sector has shown signs of buckling under pressure. In the meantime, the cost of a review of this division is an additional weight.
"The 13 per cent increase in the final dividend will add some attraction to a currently light yield of 2.4 per cent, whilst the share buyback should give at least some support. However, today’s wider market weakness and general valuation concerns are clearly taking precedence over any rays of light which the company is displaying."