WH Smith PLC
The global travel
retailer
Pre-close Trading
Update
11 September
2024
Strong peak trading
period; announcement of a capital return with a £50m Share
Buyback
Prior to entering its close period
ahead of reporting its preliminary results on 14 November 2024, WH
Smith PLC announces:
· Delivery of strong Q4 results through the peak trading
period
· Outcome for the year to 31 August 2024 to be in line with
expectations
· £85m
return to the Company post buyout of the pension scheme
·
£50m Share Buyback announced and an intention,
subject to other requirements for capital, to return surplus cash
to investors, in line with our capital allocation policy
Carl Cowling, Group CEO commented:
"We have ended the financial year in a strong position,
delivering a performance in line with our expectations with good
growth across our Travel businesses. Our UK division performed
particularly well over the peak summer trading
period.
"We are also today announcing the launch of a £50m share
buyback, which reflects strong ongoing cash flow, the receipt of
the pension fund buyout cash return, as well as the strength of our
balance sheet, with leverage now within our target
range.
"Our colleagues have worked extremely hard to deliver these
results over what has been a very busy summer, and I would like to
thank them for their contribution to the Group's
success."
Group
Revenue
Group revenue was up 7%1
for the year versus 2023, driven by Travel which was up
10%1. Travel performed well over its peak trading period
in the second half, driven by our key initiatives and strong
passenger numbers.
Group revenue compared to 2023 has
been:
|
|
Total vs
20231
|
|
LFL2
vs
20231
|
|
|
H1
|
Q3
|
Q4
|
Full Year
|
H1
|
Q3
|
Q4
|
Full Year
|
|
Travel UK
|
15%
|
9%
|
9%
|
12%
|
13%
|
8%
|
8%
|
10%
|
|
North America
|
7%
|
3%
|
4%
|
6%
|
-%
|
-%
|
1%
|
-%
|
|
Rest of the World
|
19%
|
15%
|
13%
|
15%
|
12%
|
7%
|
7%
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Travel
|
13%
|
8%
|
9%
|
10%
|
|
10%
|
5%
|
6%
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
High Street3
|
(4)%
|
(4)%
|
(6)%
|
(4)%
|
|
(2)%
|
(1)%
|
(3)%
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Group
|
8%
|
5%
|
6%
|
7%
|
|
6%
|
4%
|
4%
|
5%
|
1 Unaudited
2 At constant currency
3
Includes internet businesses
Travel
In Travel, we delivered strong growth during the year, driven by the
broadening of our categories and enhancing our ranges, most notably
in food and drinks, health and beauty, and technology.
In the UK, our strategy to create a
one-stop-shop for travel essentials is delivering strong results
and our focus on category development continues. Ahead of the peak
trading season, we launched a new food-to-go offer branded
Smith's Family Kitchen
which is performing ahead of expectations and, more recently, we
opened our first own-brand Smith's Kitchen café at Princess Anne
Hospital, Southampton.
Our businesses in North America and
the Rest of the World continued to show good momentum. In North
America, our initiatives are starting to deliver an improvement in
trading, and this positions us well for future growth.
Our Rest of the World division is
performing well as passenger numbers continue to improve across
these markets.
High Street
Our High Street business has
performed in line with expectations. During the second half, we
have successfully opened 30 Toys "R" Us shop-in-shops within our
stores and we expect to open a further 37 Toys "R" Us shop-in-shops
ahead of Christmas 2024, taking us to a total of 76.
Pension buyout returns £85m
to Company
Further to our announcement on 8
August 2022 which referred to the Buy In of the Group's defined
benefit pension scheme, the Buy Out of the defined benefit scheme
has now been completed. As a result, there will be no further cash
contributions required from the Group. In addition, the Buy Out has
resulted in a cash refund to the Group of c.£75m and the transfer
to the Group of an investment fund of c.£10m which will convert to
cash over the next two years.
Share
Buyback
We remain committed to our capital
allocation policy which focuses on four main areas: to invest
organically in the business, a commitment to a progressive dividend
policy, where appropriate to deliver value accretive acquisitions,
and to return any surplus cash to shareholders.
In line with that policy, we are
today announcing a £50m Share Buyback. The leverage of the Group as
at 31 August 2024 was c.1.4x1, and including the
proceeds of the pension refund announced today, we estimate that
the proforma leverage would have been c.1.1x1.
Following today's announcement, it is
our intention, subject to other requirements for capital, to return
surplus cash to investors in line with our capital allocation
policy, which includes our targeted leverage range of
0.75x-1.25x.
2024 Preliminary
Results
The Company will announce its
preliminary results for the year ending 31 August 2024 on 14
November 2024.
Enquiries:
WH
Smith PLC
Mark
Boyle
Investor
Relations
07879 897687
Nicola Hillman
Media Relations
01793 563354
Brunswick
Tim
Danaher
020 7404
5959