WH Smith today announced their preliminary results for the year ended 31 August 2012. The posting is here.
The results tell a comparable story to those I analysed last year (the analysis is here). There is again plenty of good news. Group pre-tax profit, earnings per share, and dividend are all up. Perhaps best of all, the group continues to generate cash.
For book publishers, though, the news is more mixed. Though WH Smith improved their margin on book sales, like-for-like sales of books were down 7%. The statement on e-books is again disappointingly vague (“We continue to develop our presence in the eBooks market”).
Overall, WH Smith is clearly brilliant at driving down costs. Though on a personal level I dislike their self-checkouts, I can see that they reduce store costs. But again the question arises: how sustainable is the growth in profits? Total group sales were down 2%. There will come a point where, if Smiths are to keep growing the bottom line, they will need to grow the top line too.