WH Smith's high street sales have tumbled in the first half of the year over a lack of new publishing trends, but the retailer reported growth in its key travel unit.
Pre-tax profit fell one per cent to £82m due to a six per cent drop in high street profits. Travel trading profit rose by five per cent to £41m in the six months to February.
Total travel sales were up three per cent on a like-for-like basis while high street sales fell four per cent, sending group revenue down one per cent.
The firm increased its interim dividend by 10 per cent to 16p per share.
Shares in the company were down 1.26 per cent at 1,954p at the time of writing.
Why it's interesting
WH Smith's results last year were boosted by the rising popularity of spoof humour books, but the effects of that trend have now dissipated.
Chief executive Stephen Clarke said there was "no publishing trend to match last year's strong sales of humour books over Christmas", but he applauded the company's "good" high street performance on stationery and seasonal sales.
The UK's high street has been dealt one blow after another in recent months with stalwarts like Debenhams faltering and firms including Mothercare, Moss Bros and Carpetright issuing profit warnings.
But the group's travel arm, which is the largest part of WH Smith in terms of sales and profit, continued to see strong sales growth, which Clarke said was "driven by continued investment in our UK and international businesses and ongoing growth in passenger numbers".
“Yet again, WH Smith’s interim results have laid bare the ever widening wedge between its buoyant travel business and the group’s ever-struggling high street division," said Julie Palmer, partner at insolvency firm Begbies Traynor.
“It's clear that WH Smith has found a safe harbour in the storm that’s threatening so many other high street retailers today," Palmer said.
Clarke warned of "some uncertainty" in the broader economic environment.
What WH Smith said
We have also had a record period for tender wins internationally, with 26 new units won since the start of the year, including eight units in Madrid Airport and our first seven units in South America in Rio de Janeiro. We are now present in 48 airports across 27 countries.
While there is some uncertainty in the broader economic environment, we have made a good start to the second half of the financial year, increased the interim dividend by 10 per cent and are confident in the outcome for the full year.