WH Smith ups its dividend as profits rise

WH SMITH, the stationers and bookshop, increased its dividend yesterday after reporting an eight per cent rise in its annual profits.<br /><br />Pre-tax profit for the 217-year-old group hit &pound;81m for the year to 31 August, up from &pound;76m last year, despite sales dropping to &pound;1.34bn from &pound;1.35bn year-on-year.<br /><br />WH Smith will pay a final dividend of 11.3p to investors on 4 February. The full-year dividend for the whole year will now be 16.7p, an increase of 17 per cent from last year.<br /><br />The group also unveiled plans to return &pound;35m to investors via a share buyback programme. <br /><br />The group&rsquo;s travel arm &ndash; which includes stores in airports, train stations and service stations &ndash; saw operating profits grow 17 per cent to &pound;48m, while high street operating profits went up by &pound;2m to &pound;49m.<br /><br />Chief executive Kate Swann has been shaking up the company and focusing on book and stationary sales, while winding down its entertainment that sells CDs and DVDs. <br /><br />She is also expanding the company internationally. WH Smith used its results yesterday to announce it would open six units at Delhi airport in India next year.<br /><br />The group already has trial stores in Shannon in Ireland, Copenhagen, and Stockholm-Arlanda, which were all opened earlier this year.<br /><br />&ldquo;These trials really provide us with a very low risk way of seeing what opportunity there is,&rdquo; Swann said.<br /><br />&ldquo;Whilst trading conditions are challenging, we have planned accordingly and the group is well-positioned to benefit when consumer spending recovers,&rdquo;she added.<br /><br />The company also said yesterday it had identified a further &pound;14m of cost savings it could make in its high street business. Its stock gained four per cent to close at 517.5p.