Covid-19 decimates WH Smith bricks-&-mortar retail, but online sales soar

WH Smith

WH Smith, the Swindon-headquartered national newsagents and retailer, has reported a significant impact on its current trading, with the slump in passenger numbers through rail and airports as a result of travel bans leading to the closure of a majority of its stores at travel hub. In April Group total revenue was down by 85 per cent on the same period last year, with travel hub stores revenue down 91 per cent and high street revenue down 74 per cent.

The retailer’s 130 or so stores in NHS hospitals remain open, along with 203 stores which include Post Office services.

However, WH Smith’s online businesses have performed strongly, particularly in books where it saw a 400 per cent increase in sales during the past month.

The company says its plans are on track for phased re-opening of stores in the second half of its financial year.

For the six months to February 2020, Group revenue was up seven per cent, with like-for-like revenue down one per cent. The Group reported strong profit growth in travel, with revenues up 19 per cent, up two per cent on a like-for-like basis and trading profit up 11 per cent to £49 million.

Carl Cowling, Group Chief Executive, said: “The emergence of Covid-19 and the associated global pandemic has affected all of us in ways that were unimaginable only a short while ago. I have enormous admiration for how our colleagues across WH Smith have responded to these unprecedented times and I would like to thank them all.

“Our primary focus over the past eight weeks has been to protect our colleagues across all areas of our business and our customers.  We have supported many good causes and we have kept over 300 stores open to serve the communities that most need our services at this critical time, including the NHS and the communities that rely on the Post Office services we provide on the high street.

“There was very little impact of Covid-19 on our first half results, however inevitably the performance in the second half will be very different. During the first half, we continued to see strong sales growth in our Travel business with total revenue up 19%, driven by our ongoing investment and initiatives in our UK business and our growing international businesses.  Trading profit in the first half was up 11%.  Our recently acquired US business, MRG, continued to perform well and maintained its momentum of securing significant tender wins across major US airports.  Our High Street business also performed well delivering Trading profit of £44m in the period.

“Since March, we have seen a significant impact on our business as a result of Covid-19, with the majority of our stores closed around the world.  We were fast to react to the situation and issued new equity via a placing, raising c.£162m on 6 April 2020. We also secured an additional £120m of bank funding.

“We are a resilient and versatile business and with the operational actions we have taken including managing costs and the new financing arrangements, we are in a strong position to navigate this time of uncertainty and are well positioned to benefit in due course from the normalisation and growth of our key markets.”