REG - WH Smith PLC - Trading update for the 20 week period to 15 Jan 22

WH SmithAnnouncement

19/01/2022 07:05

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RNS Number : 8699Y  WH Smith PLC  19 January 2022

 

WH Smith PLC

19 January 2022

 

Trading update for the 20 week period to 15 January 2022

 

Good progress across the Group; further store wins in North America

 

 

Commenting on today's announcement, Carl Cowling, Group Chief Executive said:

 

"We are pleased with the progress the Group has made in the period.

 

"In Travel, we have focused on our strategic objectives of increasing customer
conversion, growing average transaction value and winning new space, all of
which continue to deliver good results. We have now opened 16 of the recently
won InMotion technology stores in UK airports and are pleased with their
performance. Our strong track record of winning new tenders in the US
continues, with a significant nine store win at Kansas airport.

 

"Our High Street business performed well, in line with our expectations, with
our online businesses delivering strong performances.

 

"As we enter our 230(th) year since the Company's founding in 1792, I would
like to thank our entire team across the globe. In particular, my thanks go to
our store colleagues who have worked tirelessly over the past number of weeks
throughout such a busy trading period. We have an exceptionally strong team at
WHSmith and we look forward to building on the strong foundations we have in
place.

 

"Looking ahead, although we are seeing a small impact from the Omicron
variant, we anticipate a resumption in the recovery of our Travel markets over
the coming months. We are well placed for the key trading period in Travel
this summer and the ongoing recovery in our markets."

 

Trading Update

 

The Group has delivered a good performance over the 20 week period. Prior to
the emergence of the Omicron variant of Covid-19, we saw a consistent and
encouraging recovery in our key Travel markets. In High Street, we adapted
well to the evolving trading environment and delivered a good performance,
despite reduced footfall.

 

For the 20 weeks to 15 January 2022, total Group revenue was 85% of 2019
revenue for the period.

 

Total Group revenue as a percentage of 2019 total revenue has been:

 

                              % of 2019 Revenue(1)
                 High Street  Travel                Group
 September 2021  89%          73%                   79%
 October 2021    87%          84%                   85%
 November 2021   85%          94%                   90%
 December 2021   90%          83%                   87%
 Year to date    87%          83%                   85%

(1) Equivalent month in 2019

 

 

Travel UK

 

In Travel UK, total revenue was 70% of 2019 revenue for the 20 week period.
Prior to the emergence of the Omicron variant in early December, we saw a
consistent and encouraging improvement in sales trends across all our channels
which was followed by a resilient performance in December. We welcome the
Government's relaxation of the testing regime for arriving passengers.

 

                 % of 2019 Revenue(1)
                 Air     Hospitals  Rail    Total
 September 2021  42%     87%        71%     60%
 October 2021    59%     92%        74%     71%
 November 2021   71%     91%        74%     78%
 December 2021   65%     94%        69%     74%
 Year to date    58%     89%        70%     70%

 

We have made good progress in opening our recently won InMotion technology
stores in UK air. We have now opened 16 of the 30 stores that we have won,
including stores at London Heathrow, London Stansted, Manchester and Edinburgh
airports. Initial reaction from customers and landlords has been very
positive. We anticipate opening the remaining stores, which include further
stores at London Heathrow and London Gatwick airports, prior to the peak
trading period over the summer months. In addition, we have opened our first
combined WHSmith pharmacy format in rail, at London Euston Station, and early
customer and landlord feedback has also been positive.

 

Our key initiatives continue to deliver. We have increased average transaction
values and expanded categories during the period, for example, in pharmacy and
tech accessories ranges. This puts us in a strong position ahead of our peak
trading period in the summer.

 

Travel - North America

 

In North America, we continued to see an improvement in air passenger numbers
over the period and through the holiday season with Transportation Security
Administration ('TSA') data for the week ending 1 January 2022 down 17%
compared to 2019. Our resorts business in Las Vegas also benefited from
improved visitor numbers. We have seen a small impact from the Omicron variant
in January but, as elsewhere, we believe this will be short-term.

 

Our strong track record of tender wins continues. In the period, we won a
further 13 new stores, including three InMotion stores and a significant
tender at the new Kansas City airport to operate nine stores for 15 years. We
now have over 60 stores won and due to open in North America over the next
three years.

 

Overall revenue in North America for the 20 week period on a proforma basis
was at 92% of 2019 levels.

 

Travel - Rest of World

 

Outside of the UK and North America, we have seen broadly similar trends to UK
air, with a good recovery over the period September to December 2021 in
Europe, with some softening thereafter following the impact of the Omicron
variant. Asia remains the slowest recovering region. We are on track to open
our first two InMotion stores at Dublin Airport in the spring.

 

High Street

 

In High Street, total revenue was at 87% of 2019 revenue for the 20 week
period, in line with our expectations. Our online businesses, funkypigeon.com,
cultpens.com and whsmith.co.uk performed strongly over the 20 week period.
Through the peak period, we maintained good stock availability and we exited
Christmas with a clean stock position. Our cost savings target for the full
year is on track and our gross margin has improved, driven by mix.

 

Liquidity

 

As a result of our trading performance, our cash generation for the first 20
weeks was ahead of plan. As at 31 December 2021, access to liquidity was
£345m being cash on deposit of £95m and the undrawn RCF of £250m.

Outlook

We have a very strong pipeline of store openings with over 30 new stores
opened in the period and 99 new stores won and due to open in Travel over the
next three years.

Although we are seeing a small impact from the Omicron variant since the start
of December 2021, we anticipate, subject to no further restrictions, our
Travel markets will recover further through the spring and we are well placed
for the key trading period in Travel over the summer and beyond.

Interim Results Announcement

 

WH Smith PLC will announce its 2022 Interim results on Wednesday 27 April
2022.

 

Enquiries:

 

WH Smith PLC

Nicola Hillman                         Media Relations
 
01793 563 354

Mark Boyle                              Investor Relations
 
07879 897 687

 

Brunswick

Tim
Danaher
 
020 7404 5959

 

 

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