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UPDATE - WH Smith hikes divi as cost cuts and travel stores help profits

Published: 10:31 16 Apr 2015 BST

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--updates share price, adds broker comment--

WH Smith (LON:SMWH) upped its dividend today after cost cuts and a growing travel business helped it meet half-year profit targets.

The magazine and books retailer reported a pre-tax profit of £72mln in the six months to 28 February – in line with analyst forecasts – and said it would hike its interim dividend by 12% to 12.1p per share.

Margins improved 1.2% for the company, which has a joint strategy of expanding its travel operation and lowering costs at its high street stores.

Sales of books and stationery at its high street shops declined in the period but costs savings of £6mln helped that side of the business make a profit of £50mln.

A further £5mln worth of cost savings at high street stores have been identified for the next six-month period.

Its travel outlets, which sell food and newspapers in airports and train stations, saw sales climb 7% with the division making a £32mln profit.

Stephen Clarke, chief executive, said that the retailer was also seeing "improving trends" across the travel business.

"Looking ahead, we will continue to focus on profitable growth and cash generation while investing in new opportunities in both Travel and High Street that position us well for the future."

Investec kept its ‘buy’ stance on the business.

“An in line set of interims does not reflect the underlying momentum building,” said the broker.

Shares were 19p lower at 1383p during mid-morning trade.

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