WH Smith shrugs off sluggish sales

NEWSAGENT and bookseller WH Smith has assured investors it is trading in line with expectations, despite a 4 per cent fall in like-for-like sales at its high street division.

Underlying sales at travel stores – based at airports, railway stations and motorway service areas – were flat but the group said this represented a good performance given a downturn in the number of people using airports.

Total sales, which take into account new store openings, lifted 4 per cent in the first ten weeks of the company's financial year. Takings were given a boost by the recent acquisition of 23 stores from Alpha Retail.

The group said trading conditions were likely to remain competitive over Christmas, but added its financial year had started as it expected.

Freddie George, an analyst at stockbroker Seymour Pierce, said the update reflected WH Smith's defensive qualities.

"The travel business, which has substantial value and has achieved profit growth of over 20 per cent a year in the last three years, is forecast to see further strong growth and will account for almost 50 per cent of earnings in 2008-9," he said.