WH Smith (SMWH) H1 2025 earnings summary

Executive summary

• Completed sale of UK High Street business, transforming into a pure-play global travel retailer focused on growth, profit, and cash flow opportunities in travel markets.

• Travel divisions now represent 75% of Group revenue and 85% of trading profit, with annualized profit growth over 10% in the past decade.

• Strong platform established through US acquisitions and ongoing UK travel division strength, with operations in 32 countries.

• Over 30 new stores opened in H1, with a pipeline of 90+ stores globally, including 70+ in North America.

• Major contract win at a US East Coast airport and significant international opportunities.

Financial highlights

• Group revenue up 3% to £951m; Travel revenue up 6% to £712m; High Street revenue down 7% to £239m.

• Travel trading profit increased 12% to £56m; profit margin improved by 40bps to 7.9%.

• Group headline profit before tax at £45m, broadly flat year-over-year; headline EPS down 2% to 23.8p.

• Interim dividend of 11.3p per share declared; £27m of £50m share buyback completed.

• Capex £50m in the half, with full-year guidance of c.£110m; net debt at £454m, expected to fall to £400m by year-end.

Outlook and guidance

• Trading in line with first half performance; full-year outlook unchanged despite economic uncertainty.

• Confident in continued growth, with a strong new store pipeline and focus on spend per passenger to offset potential passenger number declines.

• Targeting 20% North American market share by 2028, with 500 stores and air business comprising 85% of the division.

• Capex for FY25 expected to be around £110m; net debt expected to be around £400m at year-end.

• Well-positioned for substantial growth, leveraging global passenger growth and airport infrastructure investment.