WH Smith Cuts Profit Forecast but Reports 2% UK Sales Growth and Plans Equity Raise
The retailer cut its pre-tax profit outlook to £75-90 million and will issue up to 26 million new shares after citing fewer passengers at travel hubs and weaker consumer demand.
The IndependentWH Smith lowered its full-year pre-tax profit guidance to between £75 million and £90 million, down from the previous range of £90 million to £105 million. The company said the revision marks the second time this year it has reduced expectations. The retailer attributed the change to fewer passengers moving through its travel locations because of the Middle East conflict and to consumers tightening their budgets.
In the 14 weeks to June 6, revenues at UK airport shops fell 1 percent on a like-for-like basis compared with the same period a year earlier. The company linked part of the drop to flight cancellations and disruptions affecting Middle East routes. Hospital shop revenues rose 7 percent year-on-year over the same 14-week period, while rail revenues increased 2 percent.
The gains offset the airport decline and produced 2 percent overall sales growth in the UK. WH Smith also announced plans to raise equity by issuing up to 26 million new shares, equal to about 20 percent of its existing share capital, together with a separate offer open to retail investors in the UK. The company said the proceeds will strengthen its balance sheet and support investment plans.
73 million in total. ” Quinn added that the company had been taking steps to “sell, exit or renegotiate loss-making or low-returning situations,” including replacing some company-owned shops with franchises. Last year WH Smith sold its high street chain to private equity firm Modella Capital; the business was later rebranded TG Jones.
