Shares in WH Smith fell by more than 10% this morning after the retailer warned that its annual sales and profits are likely to take a significant hit from coronavirus outbreak.
In a trading update, the group highlighted the impact on its Travel division as people cancel trips aboard. In the UK, it expects revenue for the six months to be down approximately 15%, which includes airports, its most affected channel, down 35% in March and April.
On the same basis, including significant reductions in March and April, second-half revenue in the US is expected to be approximately 20% lower than its expectations. The rest of its International business is also expected to be around 20% lower.
Based on current trading and modelling, WH Smith estimates an adverse impact in the financial year ending 31 August 2020 of between £100m and £130m on the total revenue and between £30m and £40m on underlying pre-tax profit.
WH Smith stated that was managing the business to protect profitability and is taking all necessary action to reduce costs.
Its statement concluded: “WH Smith is a resilient business with a strong balance sheet, substantial cash liquidity and strong cashflow. The group has a strong management team in place and has consistently demonstrated that it can adapt and respond quickly to changing market conditions.”
A further update on the situation will be given at its interim results on 22 April.
