WH Smith PLC (LSE:SMWH) said it expects to return to “meaningful profitability” in the current year with sales returning to 2019 levels after it reported full-year losses narrowed due to a recovery in its UK high street business and its North America operations.
Headline pre-tax losses for the year to 31 August 2021 shrank to £55mln from £69mln in the previous year on revenue down 13% to £886mln as trading was affected by restrictions relating to the Coronavirus (COVID-19) pandemic.
"The group has delivered a good performance in the evolving trading environment,” said chief executive Carl Cowling.
“Thanks to the outstanding efforts of all our colleagues across the business, we have continued to adapt successfully to the changing environment and we are now in a strong position to grow our business as our markets continue to recover, returning to meaningful profitability in the current financial year.”
WH Smith’s UK high street business turned a full-year profit of £19mln compared with a loss of £10mln in the previous year. Revenue rose 4% to £485mln as trading began to recover following the easing of lockdown restrictions. The online card business funkypigeon.com delivered a record performance with underlying profit of £14mln on revenue of £54mln.
Total losses in the Travel business grew to £39mln from £33mln, with revenue declining 27% to £401mln due to global travel restrictions. The company said its travel business has seen improving trends in recent months as travel restrictions are lifted, with total revenue now at 84% of October 2019 levels.
The North America business saw a good recovery which resulted in a £6mln trading profit, following new business wins at major US airports.
The company said it is making good progress on winning new space in airports and secured 30 technology stores in the UK during the year.
It also has a pipeline of 100 stores which are due to open in Travel over the next three years, the majority in North America.
"We are a financially strong and resilient group with significant opportunities to grow. While we continue to plan with caution, the group is well positioned to capitalise on the recovery in our key markets and take advantage of the many exciting opportunities ahead," said Cowling.
Shares in WH Smith were broadly flat at 1,614.50p mid-morning.