WH Smith ‘burning up to £20m a month in latest lockdown’

WH Smith revealed today that it expects to burn £15 to £20 million per month during the latest lockdown.

The newsagent, which has a large contingent of sites at airports and other transport hubs, said 2021 sales are so far just 46% of those seen in January 2020.

In December, revenues at the chain’s travel business plunged to 36% of those seen in the same period in 2019.

But the firm said today in a trading update that Christmas sales had beaten expectations, and that the company ended the year with £340 million in cash and available credit - ahead of plans.

Boss Carl Cowling said the firm’s High Street business saw “sales in December at 92% of 2019 levels”.

The firm also said that its online business “continued to deliver significant year on year growth”, as it announced the appointment to its Board of former founding MD of digital giant comparethemarket.com Kal Atwal.

Firm chairman, Henry Staunton, said that Atwal’s “marketing and digital expertise and entrepreneurial approach to business” will make her a “valuable member of the Board”.

Cowling said in the travel sector the firm has seen a “quicker recovery versus the rest of the world” in the US.

He said: “We remain focused on average transaction values which continue to grow, cost control, and operational efficiencies and I am pleased with the progress we are making, particularly given the backdrop of significantly reduced passenger numbers.”

WH Smith said it is currently trading from the majority of its High Street Stores - including 200 travel stores and around130 hospital stores serving frontline NHS workers - and that it has not experienced any disruption over the period due to the UK’s exit from the European Union.

It comes after the firm revealed in November that it recorded a statutory pre-tax loss of £226 million for the year to August, compared to a £135 million profit the previous year. The underlying loss was £69 million, better than analysts had expected.

Since the pandemic hit the company has taken a number of actions to focus on cost and cash management.

They have included working with landlords to significantly reduce or remove rent payments and to link, as far as possible, with revenue.

Shares were up 5.87% in early trading