WH Smith PLC (LSE:SMWH) promised a £50 million share buyback as it finished its financial year on the front foot and completed its pension fund buyout.
The full-year outcome is expected to be in line with expectations, the FTSE 250-listed retailer said.
It received an £85 million cash return as a result of the pension fund buyout and generated “strong” cashflow, of which it said part will be given out via a buyback and added that it intends a further payout of “surplus cash” in the future.
Chief executive Carl Cowling said: “We have ended the financial year in a strong position, delivering a performance in line with our expectations with good growth across our Travel businesses. Our UK division performed particularly well over the peak summer trading period.”
Group revenue for the fourth quarter was up 6% year-over-year, an improvement from the 5% growth in the third quarter and resulting in total revenue growth for the year of 7%.
The Travel business, referring to shops in stations and airports, grew sales 9% in the past quarter and 10% for the year, while the high street business continued its ‘managed decline’ with a 6% fall in sales.
Group like-for-like sales were up 4% in the fourth quarter, the same as the third, meaning the year saw LFL growth of 5%.
Having now completed the buy-out of its defined benefit scheme, WH Smith said it no longer needs to make cash contributions to the scheme and received a cash refund of roughly £75 million and an investment fund of around £10 million which will convert to cash over the next two years.
Shares in the company rose 13% to 1,383p on Wednesday morning, close to a 12-month high.
** Update: Adds share price **