Commenting on the results, Richard Handover, Group Chief Executive said:
“Underlying operating profit for the group has increased by 9% demonstrating the resilience of the main UK businesses in difficult trading conditions.
“In UK Retail we grew profits and generated good cash flow despite disappointing Christmas sales. This reflects the strong margin and operational performance achieved in the business which we reported at the end of January.
“News Distribution continued its good recovery, driven by a strong magazine market, greater efficiencies resulting from the investment in SAP and the integration of Connect2U. A continued focus on delivering improved customer service to client publishers and retail customers is putting this business in a strong position for the future.
“Hodder Headline has had an excellent six months of sales and profit growth driven by frontlist consumer books. The recent acquisitions are trading well and are being successfully integrated.
“We have yet to see the anticipated upturn in our USA Travel Retail business. This business continues to experience difficult trading conditions reflecting the well publicised subdued US economy and specifically the challenging US travel market. As a result, we have written down our US assets by a further £35 million.
“We have closed a further 33 loss making hotel stores and following a review of our cost base have reduced our central costs by 25% on an annualised basis. However, we continue to review all our options in respect of our USA Travel Retail business, particularly in relation to hotels, and seek solutions that will benefit all our stakeholders.
“We are currently confident about the Group’s prospects for the rest of the year, and our cash flow remains strong. We are encouraged by current trading in the UK businesses, but are mindful of the uncertain economic outlook and resulting possible impact on consumer confidence.”
For a full copy of the results visit
http://www.whsmithplc.com/grp/downloads/interim2003.doc
