WH Smith expects £20m monthly cash burn as restrictions continue
WH Smith expects a monthly cash burn of £15m to £20m from January to March 2021, assuming Covid-19 restrictions stay as they are.
Trading at the book and stationary chain was ahead of plan toward the end of 2020, so the business had some £340m of available cash and facilities at the end of December 2020 – more cash than it anticipated.
WH Smith’s retail business performed well over Christmas, but revenue on the whole is significantly down at the company, with Covid restrictions particularly affecting its travel business.
Revenue from WH Smith’s retail business in December 2020 stood at 92 per cent of revenue in December 2019, even with coronavirus restrictions in place.
But WH Smith’s travel business has weighed heavy on the firm, with December 2020 revenue at just 36 per cent of revenue in 2019, meaning overall revenue in December was down 46 per cent on last year.
In the 20 weeks to 16 January 2021 the picture was largely the same. The high street brand performed relatively well, with revenue at 87 per cent of 2019 despite ongoing restrictions and a national lockdown in November.
But the travel business for the period suffered, drawing in revenue of just 37 per cent on last year, and leaving the business with revenue of 59 per cent of 2019 overall.
CEO Carl Cowling said he was pleased the Christmas period was better than expected.
“We generated cash during November and December and ended December with a stronger cash position than anticipated with liquidity of £90m, which is materially ahead of our original plan.
“We remain well placed to navigate our way through this ongoing period of uncertainty and benefit from the recovery of our key markets in due course.”
New non-executive director
Elsewhere WH Smith has appointed Kal Atwal as a non-executive director, with effect from 1 February 2021.
Atwal spent 16 years at BGL Group and held several roles, including founding managing director of comparethemarket.com and group director responsible for brand-led businesses, group strategy and corporate communications.
She is currently a non-executive director at Royal London Asset Management, Admiral Financial Services, a subsidiary of Admiral Group Plc, and chair of Simply Cook, a tech-enabled meal kit subscription service.