WH Smith PLC will today commence its pre-close season analyst meetings ahead of its year end on 31 August 2003.
In the second half, like for like sales in the High Street business will be flat due to a highly competitive sales environment and the recent hot weather, which has reduced footfall. Gross margin in the second half of the year will fall by approximately 60 basis points, primarily as a result of margin decline within the Entertainment category. However, gross contribution from Books, Stationery and News and Express will be satisfactory. Overhead costs have been tightly controlled.
The impact of the Iraq war and SARS on airport passenger numbers have led us to reduce our forecasts for the UK Travel Retail business.
As a result of the above, the UK Retail business will deliver results below market expectations.
The remaining businesses in the Group have traded broadly in line with expectations.
Despite the slowdown in the UK Retail business in the second half of the year, the cash generation of the UK businesses remains solid.
The Group is continuing to review all its options in respect of the US Travel Retail businesses and anticipates being in a position to update the market in the near future.