WH Smith profits up despite tough climate

WH Smith posted an expected 4.5 per cent rise in year profit as its strategy of cutting costs and improving margins, rather than driving top-line sales, paid off in a tough market.

"The economic conditions remain challenging, however we have planned accordingly," chief executive Kate Swann said.

The 219-year-old group made a pretax profit of £93m in the year to 31 August.

That compares with analysts average forecast of £93.3ms, according to Thomson Reuters data, and 89 million pounds made in 2009-10.

WH Smith, which trades from over 580 high street stores and more than 530 outlets at airports, train stations, hospitals, motorway service stations and work places said sales fell three per cent to £1.27bn.

Sales at stores open over a year fell five per cent but gross margin improved by 150 basis points year on year.

Swann has cut costs and improved margins by focussing on more profitable products, better sourcing and better control of markdowns.

WH Smith, which ended the period with net cash of £41m, is paying a dividend of 22.5 pence, up 16 per cent.