WH Smith issues mixed trading update as investors digest good news/bad news combo

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Continued doubts ove the return to “normal” levels of travel means the retailer currently anticipates the levels of profitability for the current fiscal year will be at the lower end of market expectations.

() tempered some good short-term news for shareholders with a more downbeat 2022 outlook.

The group said it expects the outcome for the year to the end of August to be slightly ahead of previous guidance issued on 8 July, however, profitability for the year ending August 2022 is expected to be at the lower end of market expectations.

The retailer said revenue from its high street stores in the eight weeks to 28 August was 84% of the level seen in the corresponding (pre-pandemic) period of 2019 while its stores located in travel hubs such as railway stations and airports racked up just 64% of the revenue seen in the same period of 2019.

The group as a whole saw revenues running at 71% of pre-pandemic levels in the period.

The retailer said trading continues to be affected by the pandemic but the trends continue to improve.

Outside of the UK, its North America business “performed well” in July and August, the company said, with sales at 93% compared to 2019 levels.

“We remain confident in the strength of our North American business and in winning further stores in this market,” WH Smith said.

As at 28 August 2021, the group had cash on deposit of £107mln while its £250mln revolving credit facility remains undrawn.

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