WH Smith raises dividend after increasing profit

Kasmira Jefford
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STATIONER and bookseller WH Smith yesterday raised its dividend to shareholders, reflecting its confidence in future prospects after it posted a three per cent rise in first-half profit.

The group, which has over 1,200 stores primarily in the UK as well an increasing presence overseas, said headline pre-tax profit for the six months to the end of February rose to £70m compared with £68m the previous year.

It has proposed a half-year dividend of 10.8p, up 15 per cent on the prior year, on top of the £47m returned to shareholders in the first half through the dividend and share buyback announced in October.

Despite an improvement in profit, total sales and sales at stores open over a year fell four per cent, in a long running theme for the group. But its gross margin rose by 190 percentage points due to a more profitable product mix and cost control.

Chief executive Stephen Clarke has been continuing with the cost-cutting strategy laid out by his predecessor Kate Swann and stepping up expansion overseas to offset declining footfall at home.

Clarke said its sales across its travel division, which includes outlets at airports, hospitals and train stations, rose two per cent thanks to new store opening and a pick-up in people travelling.

High Street sales fell seven per cent with like-for-like sales down six per cent.

However, Clarke said it continued to focus on profits rather than sales, pointing to £9m of cost savings made across its high street arm in the half year. The group has outlined a further £5m of cost savings for the second half.