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WH Smith PLC (LSE:SMWH) has announced a £50 million share repurchase program as it closed its financial year on a positive note and completed the buyout of its pension fund.
The FTSE 250-listed retailer indicated that its full-year results are anticipated to align with market expectations. The completion of the pension fund buyout has resulted in an £85 million cash return. The company highlighted that it has generated substantial cash flow, part of which will be used for the share repurchase, with plans for additional distributions of "surplus cash" in the future.
Chief Executive Carl Cowling noted the company’s strong performance: “We have ended the financial year in a strong position, delivering a performance in line with our expectations with good growth across our Travel businesses. Our UK division performed particularly well over the peak summer trading period.”
For the fourth quarter, WH Smith reported a 6% increase in group revenue compared to the same period last year, marking an improvement from the 5% growth achieved in the third quarter. This resulted in an overall revenue growth of 7% for the year. The Travel sector, which includes stores in stations and airports, saw a 9% rise in sales for the quarter and a 10% increase for the year. In contrast, the high street segment continued its managed decline with a 6% decrease in sales.
Group like-for-like sales were up 4% in the fourth quarter, maintaining the same growth rate as in the third quarter, leading to a 5% increase for the full year.
With the completion of the buyout of its defined benefit pension scheme, WH Smith is no longer required to make cash contributions to the scheme. In addition to the cash refund of approximately £75 million, the company received an investment fund of around £10 million, which will be converted to cash over the next two years.
Following these updates, WH Smith’s shares rose by 13% to 1,383p on Wednesday morning, approaching a 12-month high.
