Resurgent travel drives WHSmith as Q3 revenue exceeds pre-pandemic levels

By Luke Barras-hill |

WHSmith Group’s revenue in the third quarter outpaced 2019 levels for the first time, the London Stock Exchange listed firm has reported.

In a trading update issued today (15 June), the news, books and convenience retailer’s Travel division reported Q3 revenue at 123% of 2019 levels.

The strengthening Travel division means the news, books and convenience retailer now expects its full-year performance to be at the higher end of analysts’ expectations. 

“We remain in a strong position to benefit from the significant growth opportunities across the global travel retail market and currently have over 125 stores won and yet to open,” read the trading statement. “In addition, there are a large number of ongoing tenders across our markets.”

UK TRAVEL: STRONG ATV & PENETRATION

Buoyed by recovering passenger traffic, the UK Travel business posted revenue at 104% of 2019 levels for the period with enhancements to ranges and categories nudging up ATV and penetration.

Revenue across the UK Travel business was led by air (at +114% of 2019 levels), followed by hospitals (+102%) and rail (+87%).

WHSmith has unveiled a number of new InMotion shops across its UK airports estate after winning contracts to run 30 shops at UK airports last year.

The largest InMotion unit globally is housed at Heathrow Terminal 5 and opened in April. WHSmith confirms that all of the units ‘are performing well’.

In North America, the business ‘continues to show strong momentum’ fuelled by healthy passenger numbers – at circa 90% of 2019 levels in May alone, says WHSmith citing Transportation Security Administration (TSA) data.

WHSmith’s Travel revenues enjoyed a 23% boost above 2019 levels in the 15 weeks to 11 June. Source: WHSmith Plc.

“During the period we have won further stores, including four stores at Chicago O’Hare airport,” continued the statement. “Las Vegas continues to perform strongly.”

The Group’s pipeline of more than 125 Travel stores includes 63 in North America.

“In our Rest of the World division, we are now seeing recovery across all our markets, including Asia and Australia, with the strongest recovery in Europe,” added the statement.

FIRST STORES WON IN SPAIN TENDER NOW OPEN

During the first half of 2021, the Group won a tender for 31 additional shops in Spain in locations such as Madrid, Barcelona, Majorca and Ibiza.

This takes WHSmith’s store footprint at Spain’s airports to more than 50, with the 31 directly operated shops expected to open by 2023.

“The first two stores (both in Majorca) from our recent tender win in Spain have now opened and are trading well,” read the statement. “We anticipate opening a further 20 of the 31 new stores won in Spain in time for our peak summer trading period this year.

The largest store in the InMotion estate (pictured) officially unveiled at Heathrow Terminal 5 in April; below: InMotion at Heathrow Terminal 3.

“We are in a strong position to capitalise on new space opportunities. We have a strong tender pipeline and are in active discussions regarding a number of tenders.”

While the current global economic outlook poses uncertainty, the Group remains ‘well positioned’ to capitalise on the continued recovery across key markets, including those related to its 125-store pipeline, while working on new formats and category development.

“Travel continues to perform strongly across all three divisions and we expect this to be maintained into the peak summer trading period,” said the statement. “As a result, we now anticipate the full-year outturn to be at the higher end of analysts’ expectations.”

In the Group’s six-month results ending 28 February, the Travel division recorded a trading profit of £10 million/$13.5 million (pre-IFRS 16) versus a £28m loss in 2021. Revenue increased by 139% to £189m compared with the six-month period to Feb 2021.

The Travel business, which includes Marshall Retail Group and InMotion, operates more than 1,000 units globally in excess of 100 airports.

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