WHSmith high street profit plunges ahead of sale

WHSmith’s High Street business saw its trading profit plunge more than 30% ahead of its sale to Hobbycraft owner Modella Capital.

The retailer’s division delivered a profit of £15m in the six months to 28 February, down from £22m the same time last year. Sales dropped a further 7% to £239m.

WHSmith announced it had sold its 482 stores High Street business to private equity firm Modella at the end of last month in a £76m deal to focus solely on its fast-growing travel retail division.

The retailer’s travel arm delivered a 12% increase in trading profit to £56m in the half, as sales rose 6% to £712m.

WHSmith said it has a pipeline of over 90 stores and expects to open 60 new stores this financial year, the majority of which will be in North America.

Across the wider group, pre-tax profit slipped 2% to £45m despite sales edging up 3% to £951m.

WHSmith chief executive Carl Cowling said: “The group has had a good first half with consistent like-for-like growth across all our travel businesses, and we are well-positioned for the peak summer trading period.

“Our UK Travel business has had a strong half with trading profit 8% ahead of last year. In North America, we are beginning to see the benefits of our work to re-engineer our space and improve our retail offer, with like-for-like revenue growth of 3% in the period.

“The second half of the financial year has started well, and we remain on track to deliver full year results in line with market expectations.

“We are mindful of the increased level of geopolitical and economic uncertainty, however given the resilient nature of our business, we are well-positioned to benefit from the growth opportunities in global travel retail.”

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