WH Smith fails to impress as shares slump despite boom in travel arm
Shares in WH Smith were down by almost seven per cent in early trade, despite the business telling markets it has high hopes for a strong summer of trade as demand for travel booms.
Analysts at Peel Hunt said current trading at the newsagent is not “eye-catching” and its financial guidance for the year is flat.
WH Smith, which trades from 1,100 stores across the UK, said its total travel profit before tax grew by around three million pounds to £50m in the six months to the end of February.
However, its high street offering saw profit dip by around £2m to £22m over the same period. Its shares were down by just under five per cent at 10am.
The business, which employs over 14,000, said it expects to open over 110 stores across airports and railway stations, including 50 in North America.
Carl Cowling, group chief executive, said: “In North America, it has been a very active period where we have opened a further 13 stores.
“We have also now fully integrated InMotion into our core airport business. This will allow us to sell tech accessories more effectively across our North American airport estate and generate operational efficiencies.”
He added: “None of this would be possible without the exceptional efforts of the entire team and I am extremely grateful for their ongoing commitment and hard work.”
Analysts at Peel Hunt rated the business an ‘Add’ on Thursday.
They said: “WH Smith is a fine, well-managed company and has an interesting medium- and long-term growth profile.
“However, forecasts do not look like rising any time soon and whilst the shares are not extravagantly valued, they are more for patient money than fast bucks right now.”
Shares in WH Smith fell by seven per cent when markets opened but recovered to -3.5 per cent.