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WH Smith has swung back into the black as its travel division experienced a significant recovery from the pandemic, pushing group revenues to the highest level since its creation in its current form in 2006.

Group revenues soared 58% to £1.4bn in the year ended 31 August 2022 as its travel stores in airports and train stations registered growth of 131% to £927m.

Despite disruption from the Omicron at the end of 2021, the travel division returned to above pre-pandemic levels, with total sales 30% higher than 2019 and just 8% shy on a like for like basis.

WH Smith said the momentum in travel had continued into the new financial year, with revenues in the 10 weeks to 5 November 48% ahead of 2019 levels and a new store pipeline of 150 outlets yet to open.

Growth was offset slightly by a 2% decline in sales on the high street to £473m as the group shut a number of stores and online greeting card business Funkypigeon.com was hit by a cyber attack.

As a result of the recovery in travel, the group swung from a pre-tax loss of £104m a year ago to a profit of £61m.

Trading profits at the travel arm came in at £89m, versus a £39m loss in the prior year, while trading profits from the high street increased from £19m to £33m.

WH Smith also announced a resumption of a final dividend for shareholders of 9.1p per share, which it said reflected confidence in the future and strong current trading.

CEO Carl Cowling called 2022 “a successful year” for the group and said the company entered the new financial year in “its strongest ever position as a global travel retailer with multiple growth opportunities across the world”.

“The achievements of the last year are due to the tremendous efforts of the entire team around the world for which I am sincerely grateful.

“The resumption of the dividend announced today reflects our strong current trading and the board’s confidence in the future prospects of the group.”

Shares in WH Smith jumped 4.5% to 1,345p as markets opened this morning.

Morning update

Sales at B&M have gathered momentum as shoppers turn increasingly to discounters to manage under-pressure household budgets.

Group revenues increased 1.8% year on year to £2.3bn in the six months to 24 September, which represented a step up in sales in the second quarter, rising 6.3% compared with a 2.3% decline in Q1.

Like-for-like sales in the UK operation decreased 3.9% in the half to £1.9bn, driven by a 9.1% fall in the first quarter as it lapped strong figures from the prior year, but Q2 sales were up 2%.

B&M said the momentum had continued into the third quarter, with like-for-like sales in the UK up 2.5% in the first six weeks of the ‘golden quarter’, representing a significant increase on pre-Covid levels.

The group added it remained well positioned to benefit from consumers trading down in grocery and non-grocery.

“As some customers experience our value for money offer for the first time, so would we expect to retain many of these consumers into any economic recovery. We will continue to focus on building long term relationships and loyalty with our consumers and will not sacrifice hard-won, long-term positioning for short term gains.”

Sales at the Heron Foods business increased 14.6% to £233m as more consumers visited the convenience discount stores.

Group pre-tax profits slipped back in the half to £201m, down from £241m a year ago, as margins reduced, which B&M blamed on higher markdowns in the gardening category resulting from the late arrival of warm weather.

CEO Alex Russo said: “Sales momentum is good as we enter a difficult period for the economy and consumers. Our value-based approach is winning with existing and new customers, and we will do our very best to help them weather the cost-of-living crisis.

“We are well positioned as we trade through the golden quarter and our strategy remains unchanged - a relentless focus on price and product.”

Consumer health giant Haleon has reported “another strong quarter of growth” in Q3 as it lifted prices for its range of products, which include Advil, Sensodyne, Panadol and Centrum supplements.

Revenues increased 16.1% in the three months to 30 September, with organic growth of 8.1%, made up of a 5.5% rise in price and 2.6% lift in volumes. Its power brands registered organic revenue growth of 7.4% in the quarter.

Reported operating profits rose 12.2% to £569m as pricing and increased efficiences fully offset inflationary pressures, but standalone costs and currency headwinds pushed margins down.

CEO Brian McNamara said: “Overall Haleon is demonstrating its strength in a challenging market environment.

“Whilst macroeconomic conditions remain volatile and uncertain, we remain confident that the quality of our portfolio, disciplined execution of our strategy, and continued investment will enable Haleon to deliver on medium-term guidance.”

Haleon upgraded its full-year guidance, with organic growth now expected to be in the range of 8% to 8.5%.

Revenues at Tate & Lyle have increased 20% to £849m in the six months to 30 September, while adjusted operating profits rose 29% to £137m.

The group said it was managing the impact of cost inflation through strategic mix management, pricing, productivity and cost discipline.

CEO Nick Hampton added the strong first-half results represented “an excellent start” to Tate & Lyle’s first full year as a growth-focused, science-driven, speciality food and beverage solutions business.

“The strategic re-positioning of Tate & Lyle to focus on speciality food and beverage solutions has significantly enhanced the quality and resilience of our business,” he added.

“Despite the uncertain economic outlook, we remain confident that the strength of our ingredient portfolio across attractive categories and regions, our focus on serving our customers, and the expertise and commitment of our people will enable us to successfully deliver our growth-focused strategy.”

Domino’s Pizza has continued to gain share in the UK takeaway market and is set to roll out on Just Eat following a “very successful trial”.

UK takeaway share rose to 7.2% in the third quarter, up from 6.4% a year ago. Like-for-like sales in the quarter rose 2.4%, up from 0.9% in the second quarter.

Total orders in the year to date increased 0.7%, but were down 1.9% in Q3 as it lapped tough comparators.

Interim CEO Elias Diaz Sese said the company was looking forward to the busiest weeks of the year with the football World Cup and the festive season.

The FTSE 100 started the day down 0.3% to 7,275.61pts.

Shares in B&M slumped 6.2% to 350.3p, Haleon rose 0.9% to 288.8p, Tate & Lyle is up 1.7% to 726.4p and Domino’s Pizza Group increased 0.8% to 246.2p.

Risers also included Bakkavor, up 4.4% to 95p, Devro, up 3.2% to 183.9p, and Just Eat Takeaway, up 2.3% to 1,854.4p.

Aside from B&M, other fallers included Naked Wines, down 5% to 95.1p, M&S, down 3.4% to 109.2p, and Sainsbury’s, down 2.9% to 212p.

Yesterday in the City

The FTSE 100 dropped 0.2% to 7,291.21pts yesterday.

M&S saw shares fall 2.4% to 114.3p despite a strong showing for its resurgent clothing & home business and sales gains for the food operation. However, investors are jittery around the group’s warnings of even more challenging conditions facing the retail sector in 2023.

Other fallers included Naked Wines, down 6% to 101.8p, Science in Sport, down 6.7% to 14p, and Cranswick, down 1% to 2,966p.

Hilton Food Group rebounded 2.6% to 552p following Tuesday’s drubbing on the latest profit warning.

Risers included Glanbia, up 5% to €11.02, Virgin Wines UK, up another 4% to 71.3p, Associated British Foods, up 3.5% to 1,508.5p, and Haleon, up 2.7% to 285.7p.