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22/04/2004
WH Smith brand sales performance 'unacceptable'
WH Smith Group have reported a pre-tax loss of £72 million in the six-month period to February following what the high street store chain labelled as an "unacceptable" performance.
The loss includes a substantial element of costs incurred in £136 million exceptional write-down mainly due to losses made in an expensive and abortive incursion into the US market.
Despite WH Smith's poor interim results for the half-year to February 29, 2004, the group noted that the "operational and financial review of the company," currently being undertaken by Chief Executive Officer Kate Swann, was "progressing well".
In post for five months, Kate Swann confirmed that WH Smith was treating the approach by private equity firm Permira "seriously".
Permira, who will be permitted to examine WH Smiths accounts, has placed a cash offer of 375p per share. A further announcement on the approach is expected to be made by WH Smith.
Swan said three parts in the WH Smith Group were fine, but that the high street operation was "strategically-challenged".
"Publishing delivered a good underlying performance. News Distribution delivered a strong performance. And then within Retail, Travel was fine. The real issues are within the High Street business. And if you split out what the problems are in the High Street business, they divide into two," she said.
"It’s strategically-challenged - people talk about that as being the squeeze between the supermarkets and the specialists. And then there have been a number of areas where they haven’t performed operationally as well as they should have done."
The Group announced 270 jobs losses at the company's head office in London and the Swindon Office, and that outsourcing of jobs was "under consideration".
(SP)
The loss includes a substantial element of costs incurred in £136 million exceptional write-down mainly due to losses made in an expensive and abortive incursion into the US market.
Despite WH Smith's poor interim results for the half-year to February 29, 2004, the group noted that the "operational and financial review of the company," currently being undertaken by Chief Executive Officer Kate Swann, was "progressing well".
In post for five months, Kate Swann confirmed that WH Smith was treating the approach by private equity firm Permira "seriously".
Permira, who will be permitted to examine WH Smiths accounts, has placed a cash offer of 375p per share. A further announcement on the approach is expected to be made by WH Smith.
Swan said three parts in the WH Smith Group were fine, but that the high street operation was "strategically-challenged".
"Publishing delivered a good underlying performance. News Distribution delivered a strong performance. And then within Retail, Travel was fine. The real issues are within the High Street business. And if you split out what the problems are in the High Street business, they divide into two," she said.
"It’s strategically-challenged - people talk about that as being the squeeze between the supermarkets and the specialists. And then there have been a number of areas where they haven’t performed operationally as well as they should have done."
The Group announced 270 jobs losses at the company's head office in London and the Swindon Office, and that outsourcing of jobs was "under consideration".
(SP)
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