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WH Smith PLC (LSE:SMWH) has announced a £50 million share buyback program following a strong performance in its financial year and the successful completion of its pension fund buyout. The FTSE 250 retailer reported a positive full-year outcome, aligning with earlier projections.
The pension fund buyout yielded an £85 million cash return, contributing to robust cash flow generation. A portion of this cash will be utilized for the share buyback, with plans to distribute additional surplus cash in the future.
Chief Executive Carl Cowling highlighted the company’s strong finish to the financial year, noting solid growth across the Travel segment and particularly strong performance in the UK division during the peak summer trading period. In the fourth quarter, group revenue increased by 6% year-over-year, surpassing the 5% growth recorded in the third quarter and resulting in an annual revenue growth of 7%.
The Travel division, which includes stores in stations and airports, saw a 9% rise in sales for the fourth quarter and a 10% increase for the year. Conversely, the high street segment experienced a 6% decline in sales, reflecting its ongoing ‘managed decline.’ Group like-for-like sales were up 4% in the fourth quarter, maintaining the same growth rate as in the third quarter and resulting in a 5% increase for the year.
With the completion of the pension scheme buyout, WH Smith is no longer required to make cash contributions to the scheme. The company received a cash refund of approximately £75 million and an investment fund of about £10 million, which will convert to cash over the next two years. These financial maneuvers underscore WH Smith’s enhanced financial flexibility and strategic positioning.
