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Travel recovery lifts WH Smith sales ahead of targets

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WH Smith said its sales for the past year are expected to be “slightly ahead” of expectations as its travel business continued its recovery in recent weeks.

However, shares in the company slipped after it said next year’s profits will be at the bottom of its previous guidance.

The retail group revealed that total sales in the six months to August 31 were 65% of pre-pandemic levels from the same period in 2019.

It said it was boosted by improvement in the last eight weeks of the period, with group sales at 71% of 2019 levels, after a lift in travel trade as airport and train station stores saw footfall recover more.

UK traveller numbers are still “significantly down” versus 2019 but the group highlighted the “gradual recovery” in activity in July and August.

The retailer said it will grow its UK travel arm despite uncertainty in the sector caused by Covid restrictions, with plans for four more stores in Scottish airports after previously announcing plans to expand its InMotion brand across 18 former Dixons Travel sites.

WH Smith said its North American business performed “well” over the past two months, with sales in July and August at 93% of pre-pandemic levels.

Meanwhile, the firm said its high street business reported revenues at 85% of 2019 levels for the half-year to the end of August.

The retailer also told shareholders however that finance charges linked to recent bonds mean it currently expects its profit for the next financial year to be “at the lower end of market expectations”.

In a statement, WH Smith said: “As previously stated, we remain confident in revenues returning to pre-Covid levels in the next two to three years.

“While there will be a return to good levels of profitability in the year ending August 2022, the trajectory of the recovery in travel remains uncertain.

“Although the pace of recovery varies across our markets, we are financially strong and well placed to capitalise on the multiple growth opportunities in our key markets.”

Shares dropped by 4.9% to 1,552.5p in early trading.

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