Adult colouring-in books helps WH Smith to another year of growth
WH Smith's share price jumped this morning after reporting a surge in profits thanks, in part, to the phenomenon of "colouring therapy", which has been sweeping the country this year.
The figures
Prelims for the year to 31 August suggest each part of the stationer has performed well, giving the group pre-tax profit an eight per cent lift to £121m. Total group revenue was up one per cent.
Travel was the strongest arm, with revenues up four per cent and trading profit up 10 per cent to £80m. While revenues in the high street division dropped four per cent on a total basis and three per cent on like-for-likes, profit was up two per cent to £59m.
Group profit from trading operations rose six per cent to £139m.
WHSmith has increased its dividend by 13 per cent to 39.4p per share.
Its share price was up three per cent in early trading.
Why it's interesting
Two years on from the departure of Kate Swann, who transformed the business over a decade at the helm, WHSmith is still growing and at a time when life on the high street is ever more challenging.
Thanks to WHSmith's dominance in airports, travel is crucial to its continued success and there are also signs of growth internationally.
But one of the most interesting tidbits from today's update is a key line that has been driving growth in its high street division – the emergence of colouring-in books for grown-ups, which was singled out as having made a strong contribution to the stationer's second half.
WH Smith's isn't the only one to experience a boom in this field: Amazon revealed in August that colouring-in books for adults were among the most popular purchases made by Londoners.
What they said
Chief executive Stephen Clarke said: "The group is highly cash generative delivering a free cash flow of £109m and we have today announced a further share buyback of up to £50m and a 13 per cent increase in the final dividend.
"This performance would not be possible without the ongoing hard work and commitment of all our colleagues across the business and I'm grateful for their continued support.
"Looking ahead, our focus will remain on profitable growth, cash generation, investing in new opportunities and evolving our customer proposition, all to ensure we are well positioned for the future."