REG - WH Smith PLC - Pre-close Trading Update

WH SmithAnnouncement

11/09/2024 07:00

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RNS Number : 6366D  WH Smith PLC  11 September 2024

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 2023(1)                    LFL(2) vs 2023(1)
                    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 Street(3)     (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.1.4x(1), and including the
proceeds of the pension refund announced today, we estimate that the proforma
leverage would have been c.1.1x(1).

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

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