WH Smith has cut its annual profit outlook for the second time this year and announced plans to raise equity, citing a decline in passenger numbers at its travel hubs due to the Middle East conflict and weakening consumer demand.
Profit Forecast Lowered
The retailer, which operates shops in airports, train stations, and hospitals, now expects a pre-tax profit between £75 million and £90 million for the full year, down from its previous guidance of £90 million to £105 million. This marks a significant revision reflecting reduced footfall and spending.
Revenue Trends
In the 14 weeks to June 6, UK airport shop revenues fell by 1% year-on-year, partly due to flight cancellations and disruptions in the Middle East. However, hospital shop revenues rose 7% and rail revenues increased 2%, leading to overall UK sales growth of 2%.
Equity Raise Details
WH Smith plans to issue up to 26 million new shares, representing about 20% of its existing share capital, alongside a separate offer for retail investors. The proceeds aim to strengthen the balance sheet and support investment plans. Directors, including executive chairman Leo Quinn and the finance chief, intend to contribute approximately £1.73 million.
Strategic Moves
Chairman Leo Quinn acknowledged economic uncertainty affecting consumer spending. He described the equity raise as a proactive step to accelerate transformation, including selling, exiting, or renegotiating loss-making operations, and converting company-owned shops to franchises. Last year, WH Smith sold its high street chain to Modella Capital, now rebranded as TG Jones.
