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WHS profits crash as revenue rises

Strong High Street sales but InMotion acquisition knocks half-year figures


HALF-YEAR profits at WHSmith have crashed by 21 per cent after their acquisition of US travel accessories retailers InMotion and a restructuring programme – but revenue rose.

In the interim statement released yesterday, Thursday, April 11, the British retailers revealed pre-tax profits dropped from £82million to £65m in the six months to February 28 having booked £9min costs linked to the deal to buy InMotion, and another £7m linked to restructuring.
Meanwhile, total group revenue sales rose eight per cent to £695m, a one per cent uplift on a like-for-like basis, while the travel division saw their total revenue rise 18 per cent including InMotion – eight per cent taking out the new arm – which was three per cent up on a comparable basis, while profit rose seven per cent to £44m.
Despite their second-best sales performance in a decade thanks to strong seasonal stationery sales, High Street total revenue fell one per cent, with like-for-like revenue down two per cent, but profits were in line with expectation at £48m.
“The group has delivered a strong performance in the first half of the financial year,” WHSmith chief executive Stephen Clarke said.
“High Street delivered one of our best trading performances in recent years, despite the widely reported challenges facing the UK High Street, with LFL sales down two per cent. This has been driven by good growth in seasonal stationery ranges including Christmas cards, wrap, diaries, calendars and our latest fashion and art and craft ranges.
“The integration of InMotion is progressing well. This acquisition doubles the size of our business outside of the UK, where we are now present in 99 airports and 30 countries. We won a further 21 units in the period, including two InMotion units in Australia and Spain, highlighting the potential of this business outside of the US.
“While there is uncertainty in the broader economic and political environment, we have made a good start to the second half of the financial year and the increase in the interim dividend by eight per cent reflects the board’s confidence in the outcome for the full year.”

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