.

Interim Results

Strong performance across the Group with EPS up 11% and interim dividend up 13%


KEY POINTS

· Total Group profit before tax up 5% to £69m (2012: £66m)

· Group profit from trading operations[1] up 4% to £77m (2012: £74m)
o Strong performance from Travel with trading profit1 up 7% to £29m (2012: £27m)
o Further growth from High Street with trading profit1 up 2% to £48m (2012: £47m)

· Earnings per share[2] up 11% to 44.2p (2012: 40.0p)

· Interim dividend of 9.4p, up 13% on the prior year

· Good progress with return of cash to shareholders through on market share buyback programme. As at 10 April, we have purchased 4.2m of shares and returned £28m of cash to shareholders

· Strong balance sheet and cash generation
o Strong free cash flow[3] of £58m
o Net cash of £41m as at 28 February 2013

· Group total sales down 4% with like-for-like (LFL) sales down 5%
o Travel total sales flat with LFL sales down 4%
o High Street total sales down 6% with LFL sales down 5%

· Gross margin improved by 160 basis points

· Further progress in Travel's growing international channel with 121 units now open or won, and a further 30 kiosks won in China

· High Street delivered cost savings of £9m in the period, with a further £8m identified for the second half, in line with latest guidance; on track for £17m of cost savings for the full year

Citywire.......

WH Smith to benefit from high street progress
Improvements on the high street and in travel will benefit WH Smith (SMWH.L) according to Investec, which has increased its target price for the stock from £12.00 to £14.00.

Analyst Kate Calvert reiterated Investec’s ‘buy’ recommendation on anticipation of strong first half results for the newsagent and further indication of franchising plans. She said she was also expecting more detail from management on its personalised card business Funkypigeon.com.

‘We expect management to say more on WH Smith newsagent franchising and potentially on Funkypigeon, which could be a hidden gem if the Photobox (owners of Moonpig) valuation being talked about in the press is anything to go by,’ she said.

Calvert expects profits for the first half of the year before tax to fall slightly due to pension commitments with second half profits becoming stronger following ‘steady progress’ from the high street and as travel continues its cyclical recovery

JP Morgan Cazenove retains overweight on WH Smith, target raised from 1310p to 1520p.

RBC comment:
"WH Smith remains one of our Best Ideas in General Retail for exposure to strong global travel trends, active space management, favourable mix impacts on margin and ongoing cost savings and cash returns (additional £50mn share buyback announced today).
Our view: Outperform, 2000p price objective
We favour WH Smith for a) Its strong Travel rollout story b) further High Street gross margin upside, c) its strong cost saving culture, c) its strong track record of cash returns, and d) its rating of 14x CY17E P/E with a 3% dividend yield and £50mn share buyback, we think this makes a strong case for owing the shares and we reiterate our Outperform rating with a £20 price target."

StockMarketWire.com
Book and convenience chain WH Smith said it had agreed to acquire airport retailer InMotion for $198m (£155m), expanding its presence into the US market.

The deal would double the size of WH Smith's international travel business, which it has been growing to offset pressure on the UK high street.

The agreed acquisition price represented an implied multiple of around 9.9 times Ebitda.

'InMotion is a highly successful pure play travel retailer in the world's largest travel retail market,' chief executive Stephen Clarke said.

'The travel retail market in North America for digital accessories offers significant growth potential.'

'In addition, InMotion provides us with a scalable platform to launch the WH Smith airport format into the US, the world's largest travel retail market for news, books and convenience products.'

Also providing a trading update, WH Smith said it had made a 'good' start to the year, with travel revenue up 10% in the first eight weeks, and up 4% on a like-for-like basis.

High street total revenue was down 1%, and down 2% on a like-for-like basis.

Total revenue for the group was up 5%, or 1% on a like-for-like basis.