Cautious WH Smith announces special £60m dividends
Retail giant WH Smith has announced that Christmas performance was "in line with expectations" and unveiled plans to return £90 million to shareholders.
The Swindon-based retailer said that it would be returning £60 million in special dividends of 33p per share, and another £30 million in buybacks.
"The cash return to shareholders reflects our confidence in the cash generative nature of our business and our commitment to maintain an appropriate capital structure," said the retailer's chief executive Kate Swan.
Group like-for-like sales over the crucial Christmas trading period were up by one per cent according to the quarterly announcement.
"While the environment is tough we tend to be less impacted than other retailers as our transaction value is less than £5," Ms Swan said.
"We are not immune to a slowdown but while people may cut back on buying a fridge they will still buy a newspaper."
High street like-for-like sales fell by three per cent in the 21 weeks to January 26th - a trend experienced by many other retailers following the US mortgage meltdown and ensuing credit crunch.
Lower consumer spending hit many retailers as rising energy costs encouraged many shoppers to go online to buy gifts instead of making the trip to High Street.
"As we anticipated, trading conditions on the high street were competitive over the Christmas period," said Ms Swan.
Ms Swan added that the group remained cautious about consumer spending in retail markets for the year ahead.
Apparently unexcited about the dividend announcement, investors have decided to sell holdings this morning.
Shares in the UK retailer have shed 16.75p, or 4.8 per cent, to 332p in early trading today in London after opening above 348p.