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Swann to bow out with solid WH Smith profit growth

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(Globalpost/GlobalPost)

LONDON (Reuters) - British books and stationery retailer WH Smith <SMWH.L> posted a 5 percent rise in pretax profits in the first half of 2013, with cost cuts helping to improve gross margin and offset falling sales, the company said on Thursday.

Pretax profit for the group hit 69 million pounds for the 6 months ending 28 February, as the company's travel operations in airports, railway stations and motorway service areas posted profits up 7 percent.

That outperformed the high street part of the business where pretax profit grew just 2 percent.

Overall, group total sales on a like-for-like basis were down 5 percent but gross margin improved 160 basis points, helped by cost cutting.

"We expect the trading environment to remain challenging however the business is in good shape and is well positioned for continued growth in both the UK and internationally," said Kate Swann, making the last results announcement before she stands down as chief executive in July.

Swann, 49, is credited for turning around the business, streamlining operations and initiating buyback programmes that have helped WH Smith win favour with investors and analysts. Shares in the group are up 51 percent in the last three years.

Steve Clarke, managing director of the company's High Street division will take over as chief executive on July 1.

The company has also gained a foothold in the Chinese market - it is set to open 30 kiosks in China, as part of a total of 121 units either opened or won in its international division.

Shares in the firm opened 2.2 percent higher, valuing the business at around 945 million pounds.

(Reporting By Dasha Afanasieva; editing by Kate Holton)

http://www.globalpost.com/dispatch/news/thomson-reuters/130411/swann-bow-out-solid-wh-smith-profit-growth