WH Smith upbeat over recovery

Uk retail chain WH Smith today said its recovery drive was on track despite high street conditions remaining tough in recent months.

The group, which has 667 stores and a news distribution arm, said in an update ahead of full-year figures that results should be in line with expectations.

Although WH Smith gave no details on the success of individual products, the recent release of the latest Harry Potter title is expected to have contributed to the improvement.

Analysts have pencilled in pre-tax profits of around £71m (€105m) for the year to August 31, after the struggling firm posted losses of £135m (€199m) last time.

Tough competition from supermarkets and internet retailers for its core sales of books, records and DVDs have hit WH Smith hard in recent times as it struggles to hold its once dominant position.

Under the leadership of chief executive Kate Swann, the group launched a recovery scheme last year, including a three-year plan to drive cost savings of £30m (€44.1m) .

It has moved to simplify the business by selling a series of overseas operations and its book publishing arm, leaving it focused on UK retail and news distribution.

WH Smith said today: “As anticipated, trading conditions in the high street remained challenging during the second half of the year.”

However, the profitability of its high street retail business continued to improve through margin improvements and tight cost control. It added that the news distribution business made “steady progress”, while its airport outlets continued to perform well.

The firm is one of a number of retailers to have suffered from the tough retail environment, with one industry study claiming the high street suffered its worst July in a decade.

The company is due to report annual results on October 13.