WH Smith reports on second quarter

WH Smith reports on second quarter


WH Smith is to update the market with a trading report for its second quarter

WH Smith will reveal how its business stood up to December’s Arctic weather when it updates the market on Wednesday with a trading update for its second quarter.

Before the snow fell, City forecasts predicted that like-for-like sales at its high street and travel hubs would decline by 5% and 1% respectively.

WH Smith has moved away from selling higher priced, lower margin goods, such as CDs, and has focused on selling confectionery, books and stationery. Its like-for-like sales have declined as a result of this shift in strategy, but profits have been creeping up.

The group achieved a 9% hike in full-year profits to £89 million in the year to August 2010 despite a 4% drop in like-for-like sales. It followed that with a solid performance in the last quarter when like-for-like sales in its travel shops dropped 1%, while the high street declined 4%.

Meanwhile shareholders in Britain’s biggest shopping centre group are to vote on controversial plans to buy the Trafford Centre in a £1.6 billion deal on Wednesday.

Capital’s plans to buy the centre sparked a rebellion from 5% shareholder Simon Property Group, which complained that too many shares were being offered to finance the deal.

But analysts expect the transaction to go through because it is reported to have the backing of major shareholders, including the South African businessman Donald Gordon, who owns a 13.3% stake.

Imperial Leather soap maker PZ Cussons has already guided towards a marginal profit rise for Tuesday’s interim results, but its tone for the year ahead has been cautionary.

The firm pointed to challenging consumer markets, high promotional activity and rising commodity inflation in its last trading update. Its half-year figures will also have seen it come up against tough comparatives from a year earlier, when the swine flu outbreak saw sales of its Carex anti-bacterial handwash soap soar.

Investec Securities analysts are pencilling in first half pre-tax profits growth of 2.2% to £45.7 million for the six months to November 30. They said ongoing growth in Asia will have offset lower profits in the UK and Europe, where the eurozone debt crisis loomed large.

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