WH Smith says Covid-19 to hit sales by up to £130m

​The ​high street, station and airport ​retailer ​is currently predicting that the outbreak will ​hit underlying pre-tax profits by between £30​m and £40​m for the year to August 2020.

WH Smith said t​he virus​ has had a significant impact​ ​on its Asia Pacific travel business, as well as a material reduction in passenger numbers at airports in the UK, US and Europe.

The update came as WH Smith reported that its fast-growing travel business helped offset high street decline to drive the group to sales growth over the past six months.

It said it believes Covid-19​ outbreak​ will result in a reduction in ​its expectations for revenue and profit across the travel business ​in​ the second half, on the basis of a challenging third quarter and "modest normalisation" in the fourth quarter.

The retailer said revenues for its UK travel business are predicted to fall 15​ per cent​ below forecasts ​in​ the next six months, with a 35​ per cent​ decline in March and April.

It predicts sales in the US division and rest of its international business ​will​ fall 20​ per cent​ below forecasts for the half-year.

WH Smith also recognised that the virus could result in reduced high street footfall, but said it has not yet seen a significant impact on the high street arm.

The retailer reported that group total revenue increased by 7​ per cent​ in the six months to February 29, with like-for-like revenues down 1​ per cent​.

It said this was driven by its travel business, which saw sales increase by 19​ per cent​ with like-for-like sales growth of 2​ per cent​.

Meanwhile, its high street business saw revenues fall 5​ per cent​ with like-for-like revenues down 4​ per cent​.

In a trading update, the company said: "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.

"Over the longer term, the board remains confident in the strategy and believes the group is well positioned to benefit from the normalisation and growth of the global travel market."