WH Smith PLC Reduces Monthly Cash Consumption Forecast After Performance Exceeds Expectations

Convenience and online stores performed well, but the travel segment remains under pressure

() declared to have performed better than expected and reduced the monthly cash consumption forecasts.

The newsagent chain said revenues from its High Street business fell 26% and 16% in January and February, respectively, which was higher than expected.

READ: WH Smith’s Sale of Funky Pigeon Could Boost Travel Business Pivot, Broker Says

The online greeting card company, funkypigeon.com, had record sales for the Valentine’s Day period.

The travel segment continued to suffer from COVID-19 restrictions, with revenues down 65% and 67% in January and February respectively.

Thanks to better than expected business performance since early January, monthly cash consumption in the three months leading up to March 31 is expected to be £ 12-17million, up from £ 15-20million previously.

As of February 28, the group had a deposit of £ 52million with £ 50million of known commitments, such as rents, and access to £ 200million of committed facilities.

The retailer also announced the extension of its bank financing agreements with its existing banks.

It extended the maturity of its two existing £ 200million term loans until October 2023 and agreed to a new minimum liquidity covenant for the August 2021 and February 2022 covenant tests, while that the waiver of the covenant previously agreed for February 2021 remains unchanged.

These changes allowed WH Smith to cancel their existing £ 120million liquidity loan which was unused and was due to expire in November 2021.

A £ 200million revolving credit facility remains unchanged with the current agreement due to be renewed in December 2023.

“The speed of recovery out of lockdown for travel is critical, but there is a lot to like about the long term and we remain enthusiastic buyers,” Peel Hunt analysts noted.

Shares rose 1% to 1,918.4p on Tuesday morning.

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