WH Smith raised its dividend yesterday after a jump in first-half profits.
The newspaper, books and stationery retailer reported a profit of £70m for the six months to 28 February, up four per cent. It hiked its dividend by 13 per cent to 6.1p.
WH Smith’s first-half sales fell two per cent to £716m, while sales at stores open over a year were down four per cent. However, gross margin improved by 160 basis points.
The company which has shops in stations, airports and hospitals as well as on the high street has cut costs in the past year as consumer spending slumped.
The company said it had overcome the decline in the number of air passengers using its stores and was enjoying better margins.
Chief executive Kate Swann said: “We have delivered a good performance. The interim dividend is up 13 per cent, demonstrating the board’s confidence in the future prospects of the group and its continued cash generative nature.”
Swann’s game plan has been to concentrate on the stores big selling lines to breathe new life into the firm. She has rebalanced WH Smith’s mix of products towards core categories and away from entertainment products such as CDs and DVDs.
The firm has a low average transaction value of about £5 in its high street stores. Swann said the profit hit to its airport stores from last week’s volcano ash cloud related disruption was unlikely to be material.