WH Smith in earnings rise but sales fall

WH Smith yesterday reported a 4.5 per cent rise in annual profits, with cost cutting helping to offset a fall in sales.

The newspapers, books and stationery retailer made a pre-tax profit of £93m in the year to 31 August, compared with £89m a year earlier.

But like-for-like sales at stores open more than a year fell five per cent. The company said cost savings of £14m were delivered, while its margins improved.

Chief executive Kate Swann said: “We don’t expect any short-term improvement in customer spending. Consumer spending is clearly challenged at the moment, though we planned for it to be tough and we’re well used to operating in tough markets.”

The company, which also has 532 travel stores at airports, train stations, hospitals, workplaces and motorway service areas, said sales fell three per cent to £1.27bn.

Annual sales of books at the retailer were down by four per cent.

KOBO E-READER | STEVE DINNEEN

WH Smith yesterday announced a partnership with Kobo to sell eReaders in its 750 stores, in a major push into the digital market. The retailer is entering the industry at a difficult time. Amazon, which has built up a commanding lead in the nascent market, has improved its line-up with cheaper, smaller models and its new Kindle Fire tablet. But the Kobo is a surprisingly adept challenger. The first impression on pulling it out of its box is its size and weight – it’s tiny. With its six inch screen, it fits easily in a suit jacket pocket. The second thing you notice is its quilt-effect back, made from a matt rubber: it sounds awful but somehow it works. It features a touch screen and uses e-ink similar to the Kindle, meaning it’s easy on the eyes. Page load times seem to be a fraction of a second off the Kindle but not enough to really set them apart. Where the Kobo falls short is the store, which lacks the finesse of Amazon’s. You can access it via wi-fi or through a computer and setting up an account is easy (payments are processed through PayPal). The Kobo Touch will set you back £110.