WH Smith is set to report pre tax loss of up to £75million as Covid pandemic hit sales at its travel stores after announcing 1,500 jobs could be axed
- WH Smith previously revealed up to 1,500 jobs were on the line amid Covid
- Analysts at Investec said they expect it to deliver a £73 million loss this year
- It will reveal its latest trading figures for the year to August 31 next Thursday
WH Smith could report a pre-tax loss of up to £75million after the coronavirus pandemic hit sales at its travel stores, it has emerged.
The retailer previously announced up to 1,500 jobs could be axed as its pre-tax loss sits somewhere between £70million and £75million for the year to August 31.
It will reveal its latest trading figures next Thursday.
Analysts at Investec have said they expect it to deliver a £73 million loss, describing 2020 as a ‘write-off’ year for WH Smith.
In August the 228-year-old business said 1,500 jobs, around 11 per cent of its workforce, could be axed after a dramatic fall in sales.
WH Smith previously announced up to 1,500 jobs could be axed as its pre-tax loss sits somewhere between £70million and £75million for the year to August 31. Pictured, a store in London in August
Its travel arm, which has boosted the group with rapid growth in recent years, has seen revenues slump on the back of global travel restrictions which are set to continue for the coming months.
‘A near term recovery in travel seems unlikely’, according to Investec, but the brokerage stressed that it does not believe the travel market has structurally changed permanently and expects its recovery in the sector to become more clear next year.
In the UK, WH Smith’s high street stores have been battered by lockdown measures from March as well as depressed high street footfall in more recent months.
Investors will therefore be particularly keen for an update on how bosses plan to steer the retailer through England’s second national lockdown, although the majority of its stores are expected to remain open through essential status.
Around 300 of its 1,600 stores were kept open after the first lockdown – primarily those in hospitals and with post offices attached – but the chain is expected to be better sheltered this time around after newsagents were given the green light to stay open.
Analysts at Investec have said they expect it to deliver a £73 million loss, describing 2020 as a ‘write-off’ year for WH Smith.
‘WH Smith should paint a picture of just how badly lockdown two is likely to hit sales in the crucial Christmas shopping period,’ said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
‘Its travel division was the main driver for growth before the pandemic, so the prospect of deserted railway stations and airports for potentially many more months will be a bitter pill to swallow.
‘There will be hope online purchases will make up some of the shortfall but competing with the might of Amazon won’t be easy.’