WH Smith PLC (LSE:SMWH) shares rose 3% after it unveiled a final dividend that was stronger than expected as it hailed strong cash generation for the past year and said it is confident about "multiple growth opportunities" in the near future.
The retailer, which specialises in airports, railway stations and high streets, reported revenue up 28% to £1.8 billion and headline profit before tax (PBT) up 96% to £143 million for the year to 31 August 2023, in line with a pre-close update in September.
A final dividend of 20.8p per share was proposed, making a full-year dividend of 28.9p per share. A dividend of 9.1p was paid the prior year.
Net debt inched up to £330 million from £296 million as working capital outflow increased to £64 million from £10 million due to investment in new stores and the recovering Travel business.
This year, the group expects an increase in free cash generation, and net debt to increase to around £310 million.
A "strong start" was reported for the new financial year with UK Travel revenue up 13% in the first nine weeks to 4 November, up 15% in North America and up 27% in the Rest of the World.
Broker Peel Hunt said WH Smith had pretty much pre-announced its numbers and £143 million of PBT was where the market had alighted.
"The dividend was a shade better than consensus, but in general FY23 was in line.
"Current trading is steady, but we do not expect analysts to change numbers today: consensus is £168 million for FY24E; we are on £173 million but expect little to change."