WH Smith’s trading update played out as expected – the high street operations are doing their very best to support the group while the travel arm still has some way to go with its Covid recovery.
Strategically the company has remained focused on the longer term and there are some interesting developments that put WH Smith in a stronger place to thrive once life returns to normal.
“It has secured more stores in travel hubs, and it is rolling out an initiative whereby it houses a pharmacy within travel shops. If Covid can stop interrupting everyday life, then WH Smith arguably stands a good chance of bouncing back sharply,” said AJ Bell’s Russ Mould.
“The same can’t be said for spot the ball competition organiser Best of the Best which may be secretly praying for everyone to be told to work from home permanently.
“It thrived during the early stages of the pandemic as people were bored at home, potentially on furlough, and wanted to find a way of making a quick buck. Revenue and profit soared, and the company even put itself up for sale, perhaps thinking if ever there was an opportunistic time to get top price for the business, this was it.
“The sale didn’t happen and interest in its games faded as work from home restrictions were lifted. Now customer acquisition costs are soaring, and profit is falling, with the share price having slumped by 78% in the past 12 months. While the business is still making money, shareholders are likely to be losing patience fast and perhaps thinking that its stock market code BOTB might actually stand for BoOm To Bust.”