WH SMITH cheered investors yesterday after the books and stationery retailer posted an improvement in profit margins despite sales continuing to fall.
Chief executive Kate Swann said the group had delivered a “resilient” performance in a challenging market after like-for-like sales fell five per cent for the 21 weeks to 21 January.
The FTSE 250 firm, which has 612 high street shops and 561 in travel locations, said sales were hit by a lack of strong titles this Christmas compared with last year, when Jamie’s 30-Minute Meals and Tony Blair’s biography flew off the shelves.
At its high street division, like-for-like sales fell six per cent as consumer confidence remained weak.
Under Swann’s leadership, the company has been focusing on offsetting shrinking sales with higher margin products and cutting costs, which has led to an increase in profits over the past seven years.
She has also rebalanced WH Smith’s high street and travel businesses and the firm’s mix of products away from entertainment products such as CDs and DVDs, which now count for less than five per cent of its sales.
“As a result of this, the months of November and December now represent less than half of annual group profit compared to over 90 per cent of group profit six years ago,” Swann said.
Shares rose 4.32 per cent to 554p.