WH Smith has unveiled plans to open around 100 new travel stores after launching a £325 bond offering in convertible bonds, despite reporting losses in its half-year results.
The group, which also secured a £250m revolving credit facility with an extended maturity to 2025, said the funds will aid the opening of its new travel stores both won and yet to open over the next three years, as well as new growth opportunities.
The remainder of the funds will be used to partially pay down its existing £400m of term loans from both the Marshall Retail Group and InMotion acquisitions.
The announcement comes as the group published its half-year results, reporting a pre-tax loss of £17m in the period ending 28 February 2021.
Nonetheless, its UK travel business has “continued to be impacted by a significant decline in passenger numbers” as a result of ongoing travel restrictions throughout the first half of the financial year.
Total revenue in this business was £79m, down from £271m the prior year. Compared to 2019, air was 16%, its hospital channel was 71% and rail was 22%. This resulted in a trading loss of £19m, down from a profit of £40m.
Despite this, the group said it was an “encouraging performance” despite the continued impact from Covid-19, with “good results across all key markets” from its focused plan on customer conversion, increasing average transaction value (ATV), category development and cost management.
Carl Cowling, group CEO, said: “In Travel, while many of our stores have remained closed, it is a credit to the team that we have kept up the momentum, focusing on our plan to increase average transaction value and spend per passenger while continuing to win new business. As a result, we are now operationally stronger than prior to the pandemic.
“We have a strong pipeline of new store openings with c.100 stores already won and due to open in Travel over the next three years, the majority of these in North America. We are an important retail partner for our travel landlords and we are well positioned to take advantage of further space opportunities that will arise over the coming months.”
He added: “In a difficult retail environment, our High Street business has generated a resilient performance. At the same time, we are pleased that our online businesses, including funkypigeon.com, have delivered a record performance.
“We have positioned the Group well. We are financially strong as a result of the actions we have taken, and the new financing arrangements also announced today will put us in an even stronger position to capitalise on the growth of our key markets and take advantage of the many exciting opportunities ahead.”