Bookish Boost For WH Smith With Interim Results?
Spreadex | Apr 05, 2019 12:34
After a very disappointing 2018, one that took the company from £23-crossing all-time highs to sub-£17, 18-ish month low, the retailer has gotten off to an excellent start to 2019. Opening at £16.92, the stock has only recently cooled off, not before hitting a 14-month peak of £21.77 towards the end of March. WH Smith PLC now sits at a current trading price of £21.45 (Spreadex, 05/04/2019).
The firm’s January 23rd update played a big part in its recent rise. There is now always a relative sense of predictability about WH Smith’s statements: Travel does well, High Street doesn’t. The nuance tends to lie in how good and how bad.
For the 20 week period to January 19th, total sales at the Travel business were up a very healthy 16% following the acquisition of the US travel retailer InMotion, with like-for-likes rising 3%; High Street, meanwhile, saw total sales tumble a manageable 1%, alongside a 2% dip in comparable sales. This left WH Smith with a 6% increase in overall sales and a flat LFL performance.
A similar set of figures on Thursday may be enough to satisfy investors, while they’ll want to hear further details of the InMotion integration and plans for the US as a whole. And for reference, at the midway point last year, WH Smith posted a 1% decline in group pre-tax profit to £82 million, so an improvement on that could be the key if the stock wants to keep climbing towards £23-plus all-time peak.
WH Smith PLC (LON:SMWH) has a consensus rating of ‘Buy’ alongside an average target price of £22.42.
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