WH Smith (SMWH) H2 2024 earnings summary

Executive summary

• Group profit rose 16% to £166m and revenue increased 7% to £1.9bn for the year ending 31 August 2024, driven by strong performance in Travel, especially the UK division, and new store openings globally.

• Opened 106 new travel stores across all divisions, with a pipeline of 90+ stores due in the next three years; the board proposed a 16% higher full-year dividend and initiated a £50m share buyback.

• The business transformation to a one-stop shop for Travel Essentials is progressing, with significant growth opportunities in space, categories, and passenger numbers.

• High Street remains profitable but is a shrinking part of the group as travel grows.

Financial highlights

• Revenue up 7% year-over-year to £1.9bn; headline profit up 16% to £166m; EPS up 11% to 89.3p.

• Free cash flow was £53m, with leverage dropping to 1.1x EBITDA after a £75m pension fund cash return.

• Travel now accounts for over 75% of group revenue, with travel revenue up 12% year-over-year on a constant currency basis.

• Dividend proposed at 33.6p per share, up 16% year-over-year.

• Headline group profit from trading operations up 13% to £221m.

Outlook and guidance

• Confident outlook for the new financial year, with strong trading at the start and continued investment in growth.

• Expectation to open around 60 new stores and close about 20 in FY2025, focusing on quality and profitability.

• Ongoing cost savings in High Street and further profit growth anticipated in Travel UK.

• Ongoing focus on capital allocation, with c.£125m capex planned for FY25 and progressive dividend policy.