WH Smith PLC surged on Wednesday after detailing strong trading within its now core travel business.
Having unveiled plans to sell its 500-store-strong high street wing earlier in the week, analysts noted it was “no coincidence” WH Smith had solid travel figures in the locker.
“It needed the core business going forward to be firing all cylinders in order to justify the strategic shift,” AJ Bell’s Russ Mould said.
Group revenue ticked up 3% in the 21 weeks to January 25, as a 7% increase in travel sales offset a 6% decline across high street shops.
Peel Hunt noted the travel business figures had been “particularly strong,” as both US and UK like-for-like sales grew, but held estimates on commentary alluding to full-year consensus profit-before tax at £179 million.
“The shares are not expensive, and this is a good statement, but we believe they are unlikely to be a top performer until forecast momentum reemerges: nevertheless, we like the fundamentals a lot.”
Mould added: “The future of WH Smith now rests with getting travellers to pay the price for convenience.
“Once the UK operations are sold, WH Smith’s management should have a sharper focus on the remaining business and potentially new energy across the group to take advantage of growth opportunities.”
Shares climbed 6.8% to 1,271.29p.