Retailer WH Smith has said it continues to put faith in plans to boost stationery sales to help offset under-pressure high street trading after half-year profits fell.
The chain posted a 1 per cent drop in half-year pre-tax profits, to £82 million, after earnings slumped 6 per cent at its high street business to £50 million.
This was only partially offset by a 5 per cent rise in trading profits to £41 million at its burgeoning travel arm, which is now the biggest part of the business.
WH Smith said like-for-like sales fell 4 per cent across its 610-strong high street chain in the six months to February 28th in the absence of any new publishing craze as the boom in demand for spoof humour titles came to an end.
But it said like-for-like stationery sales provided a bright spot, up 3 per cent, and hailed recent trials devoting more space to this category as successful.
It has extended trials boosting stationery to another five stores - Winchester, Cheltenham, Thurrock, Salisbury and the Trafford Centre in Manchester - as part of a plan to ramp up investment in the category, which now accounts for half of all its high street sales.
It also bought online pen specialist Cultpens.com during the first half and has struck a new stationery supply deal with the Post Office, building on an existing tie-up that has seen 168 post offices open in WH Smith stores.
Stephen Clarke, group chief executive of WH Smith, said: “Our high street business delivered a good first-half performance, despite no publishing trend to match last year’s strong sales of humour books over Christmas.
“Stationery performed particularly well in the period, including our seasonal categories over Christmas and our 2018 fashion ranges.
“While there is some uncertainty in the broader economic environment, we have made a good start to the second half of the financial year.”
WH Smith continues to cut costs to offset flagging high street sales, with full-year savings of £12 million expected.
The group’s travel division saw comparable store sales lift 3 per cent over the first half, with total sales 7 per cent higher as it continues to expand the division in the UK and abroad.
It now has 839 travel stores - including 258 overseas - at train stations, airports and transport hubs, as well as an increasing number in hospitals.
The firm plans to open another 15 to 20 travel stores in the UK this year.
WH Smith confirmed a 10 per cent rise in its interim dividend to 16p a share alongside the results.
George Salmon, an equity analyst at Hargreaves Lansdown, said: “While its high street business is in managed decline, the group has still been able to hold profits broadly flat, increase the dividend 10 per cent and make some pretty encouraging noises about the future.
“The key is the travel division, which continues to deliver robust growth.” – PA
