Thursday 17 October 2019 9:18 am

WH Smith ramps up overseas drive with $400m US deal

WH Smith has revealed plans to snap up a US travel company for more than £300m as the retail giant looks to broaden its scope beyond the UK high street.

In a deal that will double the size of the firm’s international business, WH Smith is buying Marshall Retail Group for $400m (£312m) to ramp up its travel operations and tap into growth within the airports market.

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The deal, which will be financed through a combination of new debt and equity, was cheered by investors after the opening bell as shares climbed almost five per cent.

The planned acquisition of the Las Vegas-based firm will add 170 new locations, including 59 at airports.

Peel Hunt analysts Jonathan Pritchard and John Stevenson call today a “watershed moment”, with the acquisition expected to “completely galvanise the travel side of WH Smith, making it a major player in the States and now one of the serious names in global travel retail”.

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Departing chief executive Stephen Clarke also raised the dividend after posting a rise in profit and revenue.

The newspaper, books and stationery retailer reported a seven per cent rise in annual pre-tax profit to £155m.

Group revenue edged up one per cent to almost £1.4bn, boosted by a 22 per cent revenue rise in its travel division.

Donald Brown, senior investment manager at Brewin Dolphin, added: “WH Smith continues to be a tale of two businesses. Despite the challenging retail backdrop, the group is delivering strong growth at its travel division, where its 1,019 units delivered a 22 per cent rise in sales.”