LONDON (ShareCast) - (Sharecast News) - WH Smith said its US business was showing signs of recovery as it swung to a £280m full year loss due the impact of coronavirus restrictions on its outlets at airports and train stations.
The company on Thursday said the loss in the 12 months to the end of August compared to a £135m profit last year. It also said it was shutting 25 shops this year where leases expire to cut costs on top of the eight already shut. The business has a further 420 leases due to expire over the next three years.

Revenue from its travel outlets was down 32% as the division lost £27m compared with a £117m profit in 2019. High Street stores swung to a £4m loss from a £60m profit as stores were closed during the first lockdown imposed in March which kept workers at home and hammered commuter and air travel.

WH Smith also wrote down the value of its shops by £135m based on revenue losses during lockdown. On top of other impairment charges, including stock write-offs, the retailer has also incurred a £21 million charge from its decision to cut 1,500 jobs in August.

On a headline basis, which strips non-cash charges, the company reported a £69m loss compared to a £155m a year earlier.

Cash burn for the second lockdown in England that started last week was estimated at £20m.

Despite having to close many of its stores throughout the first lockdowns, particularly in airports, WH Smith reported that its US business was showing signs of recovery through an increase in domestic travel.

"In air, we expect a gradual improvement in domestic passenger numbers first, particularly in the US where around 85% of passengers are domestic, followed by international and inter-continental passengers," WH Smith said.

"In rail, as government restrictions are lifted, and more people return to work, we expect to see a gradual improvement in sales. Outside the UK, we will continue to focus on our key initiatives and we expect to see a continued improvement in passenger traffic in North America."

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