LONDON (ShareCast) - (Sharecast News) - WH Smith said on Thursday that sales tumbled in April as the retailer's travel segment was hit by coronavirus lockdowns, and warned the second half will be dented by the pandemic.
Group total revenue slid 85% last month compared to April 2019, with travel revenue down a whopping 91% and High Street revenue 74% lower. The company said it had seen a "significant" decline in passenger numbers as a result of travel bans, while the vast majority of its stores at airports and railway stations have been temporarily closed.

Still, the online business performed "strongly", it said, particularly in books, where it has seen a 400% surge in sales in the past month.

For the six months to 29 February, group pre-tax profit nudged down to ?63m from ?65m, with revenue up 7% to ?747m.

Chief executive Carl Cowling said: "There was very little impact of Covid-19 on our first half results, however inevitably the performance in the second half will be very different. During the first half, we continued to see strong sales growth in our travel business with total revenue up 19%, driven by our ongoing investment and initiatives in our UK business and our growing international businesses.

"Since March, we have seen a significant impact on our business as a result of Covid-19, with the majority of our stores closed around the world. We were fast to react to the situation and issued new equity via a placing, raising c.?162m on 6 April 2020. We also secured an additional ?120m of bank funding."

At 1320 BST, the shares were down 5.3% at 867.50p.

Russ Mould, investment director at AJ Bell, said: "WH Smith has had the rug pulled out beneath its feet. Before coronavirus it astonished the world by proving it was capable of maintaining a profitable operation despite operating in a struggling channel (the high street) and selling products in a declining market (newspapers and magazines).

"Coronavirus has now dramatically hurt WH Smith's business, as illustrated by half-year results which show what could be its final period of the old glory days before life changed for everyone. The figures show a very small dip in profit but they are irrelevant because the reporting period is pre-lockdown for its main operating countries.

"Comment on the start of the second-half period is more important. The 91% sales decline in April for its travel arm shows the extent of the damage to its business. To get back on its feet WH Smith needs airports and train stations to be busy and global travel to be whirring back into action. It suggests that could start to happen in the autumn but this could prove to be over-optimistic.

"For now, it must simply rely on people buying books through its website, steady sales through its hospital stores and Post Office concessions luring people into its stores in the hope they also pick up a few more products."

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