WH Smith pre-tax profits up 8% despite drop in sales
WH Smith has reported an eight per cent rise in pre-tax profit to £64 million for its first half despite a drop in high street sales.
The retailer said better cost control and an improved product mix helped lift profits in the six months to February 29th 2008.
WH Smith is focussing on selling books rather than CDs and DVDs to increase its margins.
The entertainment and stationery retailer said high street total sales were down two per cent, with like-for-like sales down three per cent.
The company's travel business, which operates stores in airports, railway stations and motorway services delivered a strong performance with profit increasing by 13 per cent to £17 million.
Gross margin improved by 70 basis points year on year.
Kate Swann, chief executive, said: "We have delivered another period of good profit growth, with group profits up eight per cent.
"We have seen further strong performance from travel with substantial progress in new business development in the hospital, air and motorway channels. In the high street, we successfully continue to deliver our strategy to rebuild our authority in our core categories.
"The economic environment remains uncertain and, whilst we continue to be cautious, we are confident in the outcome for the full year."
WH Smith said it is recommending an interim dividend of 4.6p, up 24 per cent on last year.