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A strong rebound in UK and international travel has boosted first-half sales at retail group WH Smith, which plans to open 120 more travel stores to tap this growth.

Announcing its results for the six months to 28 February, the retail group said total revenues had jumped 41% to £859m in the period.

This was driven by its travel division, which saw a strong performance across all markets and a marked rebound in profitability.

Total travel revenues for the first half were up 48% versus 2019 and up 1% on a like-for-like basis.

This was driven by strong performances in all three travel regions, with the UK up 19%, North America up 22%, and ROW up 31% on 2019.

In UK travel, air was saw like-for-like sales up 4% versus 2019, despite passenger numbers still around 15% behind 2019 during the period. In North America, TSA data shows passenger numbers in the half down 4% versus 2019.

Compared with last year, revenue in travel was up 75% in total, with Travel UK up 66%, North America up 53% and ROW up 209%, driven by the strong recovery in passenger numbers.

Its high street division saw a “good” performance in the period, with the important Christmas trading period flat year on year on a like-for-like basis.

Total high street sales were down 1% to £266m.

For the six-month period, its travel delivered a headline trading profit of £47m up from £10m, while the high street headline trading profit edged back to £24m from £26m.

Therefore, headline group profit from trading operations for the period was £71m, almost double the £36m of last year, with headline group profit before tax and non-underlying items at £45m, up from £14m.

CEO Carl Cowling commented: “We have seen a strong performance in the first half of the year, further strengthening our confidence in the prospects of our global travel business. We expect Travel to represent over 70% of group revenue and around 85% of group profit from trading operations by the end of this financial year.

“Looking ahead, we are very well positioned to capitalise on the substantial growth drivers across our markets and we expect to make further good progress in the years ahead. Current trading is strong and we are ahead of expectations for the full year.”

WH Smith said it was “pleased” with its start to the second half. In the seven-week period to 15 April 2023, travel revenue was up 59%, with all three divisions continuing to perform well.

So far this year the group has opened 60 new stores, including 11 in Canada.

In total, it has a new store pipeline of over 120 stores planned and yet to open in travel, including 60 in North America.

Morning update

Deliveroo has posted 4% growth in first quarter revenues, despite a drop in order numbers and transaction values.

The first three months of the year saw the group’s revenues rise 4% to £512m despite a 1% drop in gross transaction values over the period.

Revenue growth again outpaced GTV growth due to the annualised impact of consumer fee optimisation during 2022 and growing contribution from advertising revenue.

GTV growth exceeded order growth with GTV per order up 8% in constant currency reflecting the continued impact of food price inflation.

Average monthly active consumers dropped 7% year-on-year to £7.1m while order frequency was flat.

UK revenue and GTV were up 11% and 6% in constant currency, respectively, with growth underpinned by further improvement to the consumer value proposition, including enhanced selection in restaurants and grocery.

However, international revenue and GTV down 5% and 9% in constant currency, driven by more stringent Covid-related restrictions in Asian markets in early 2022, which made for a tougher comparison base, and continued market-wide weakness in France.

The results were in line with expectations, with full-year guidance maintained.

GTV growth is anticipated to be low- to mid- single digits (in constant currency) with growth improving through the year as the comparison base eases;

Adjusted EBITDA expected to be in the range of £20m-£50m, weighted towards the second half.

Will Shu, founder and CEO of Deliveroo, said: “Revenue growth of 4% and broadly flat GTV (both in constant currency) represents a resilient performance, particularly in the context of inflationary pressures and the ongoing cost of living crisis and against a challenging comparison base.

“Against this backdrop, I’m particularly pleased with our performance in UKI, reflecting a further improvement in our offering to consumers. We remain confident in our ability to deliver on our plans to drive profitable growth and sustainable cash generation.”

Elsewhere this morning, consumer health group Haleon has issued a trading update ahead of its AGM.

Trading in the first quarter of 2023 has been strong with organic revenue growth of 9.9%, with price up 7.1%, and also volume mix up 2.8%.

Growth was seen across respiratory health, pain relief, oral health and digestive health and ‘other’.

Respiratory health revenue was particularly strong given a continued strong cold and flu season, as well as some re-stocking in EMEA and Latin America, and North America given the particularly low inventory levels at the end of last year. In VMS revenue declined largely due to the strong comparative for Emergen-C in the US during the Omicron wave in Q1 2022. Centrum was up high single-digit.

By geography performance was strong, with double-digit growth in both EMEA and LatAm, and Asia Pacific, and mid-single digit growth in North America. Asia Pacific was boosted by strength in China, particularly in Pain Relief as lockdowns ended, combined with elevated Covid-19 and cold and flu incidence.

Performance in North America was impacted by the decline in Emergen-C, which partly offset very good growth in respiratory health and pain relief.

As a result of the strong start to the year, FY 2023 organic revenue growth is now expected to be towards the upper end of the 4%-6% guidance range.

On the markets this morning, the FTSE 100 is down 0.2% to 7,884.9pts.

Risers include Hotel Chocolat, up 5.7% to 185p, Finsbury Food Group, up 2.8% to 101.8p and Haleon, up 2.2% to 351.2p.

Fallers include WH Smith, down 2.2% to 1,589p, DS Smith, down 1.3% to 322.2p and Fever-Tree, down 0.9% to 1,270p.

Yesterday in the City

The FTSE 100 edged back 0.1% after eight consecutive days of rises, to close yesterday at 7,898.8pts.

THG rebounded 10.7% back to 85p after its annual results had temporarily derailed Monday’s strong share price rally, driven by the news that Apollo Global Management is exploring a buyout.

Other risers included Coca-Cola Europacific Partners, up 3.6% to €57.00, British American Tobacco, up 3.4% to 2,930.5p, Naked Wines, up 2.9% to 99.8p, Bakkavor, up 2.1% to 98p, Cranswick, up 1.7% to 3,072p, Deliveroo, up 1.6% to 103.7p, Hilton Food Group, up 1.5% to 675p and Premier Foods, up 1.3% to 124p.

Just Eat Takeaway ended the day up 0.1% to 1,438p after upgrading its profit expectations for the year despite a big drop in orders in the first quarter.

The day’s fallers included Hotel Chocolat, down 2.8% to 175p, Marks & Spencer, down 2.5% to 165p, Wynnstay, down 2.4% to 440p, Ocado, down 2.2% to 519.6p, Nichols, down 1.1% to 1,117.5p and Domino’s Pizza Group, down 0.9% to 277p.

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