WHSmith boss to depart after six years at the helm. WH Smith (SMWH) highly regarded chief executive is stepping down at the end of October after trebling the company’s share price since taking the helm six years ago despite the wider retail slowdown. Stephen Clarke has propelled the retailer’s travel business and pushed its overseas expansion to have 425 shops outside the UK in 30 countries, which has helped cushion it from the cold winds blowing on the high street. Mr Clarke, who took over from Kate Swann, will be replaced by company insider Carl Cowling, who was promoted to the board in February after running both WHSmith’s travel and high street business. He joined in 2014 from Dixons.
Halfords puts the brakes on investment as weather hits profits. Halfords Group (HFD) is putting the brakes on its investment plans after profits sank by almost a quarter and telling the investors turnaround will take longer than originally hoped. The bike and car parts retailer posted a 24% fall in pre-tax profits to £51m after its retail performance was hit once again by adverse weather. Mild weather last year boosted its cycling performance with like-for-like sales up 2.6% as more people headed outdoors, but dented demand for anti-freeze and similar products, which dragged motoring sales down by 0.4%. Total sales rose by 1.1% to £1.1bn.
Charges hit Entertainment One profits despite Peppa Pig’s popularity. The booming popularity of Peppa Pig has failed to stop annual profits sliding at Entertainment One Limited (ETO), which owns the children’s character. Pre-tax profit fell 43% to £36.8m in the 12 months to March as a previously announced £68m impairment charge in its film distribution business took its toll. Adjusted profit, which excludes one-off items, was up by a fifth to £155.9m. A strong performance in the family and brands division, which includes Peppa Pig and PJ Masks, was dented by weaker sales in EOne’s film, television and music business. Total revenues fell 9.1% to £941m.
Royal Mail falls to new low amid dividend fears. Royal Mail (RMG) plunged to a record low before its full-year results amid fears it will slash its dividend as profits tumble. City analysts expect Royal Mail’s annual pre-tax profit to tumble 40% to around £340m after letter volumes dropped and the company missed a cost-savings target. Jefferies analyst David Kerstens told clients yesterday that Royal Mail’s policy of increasing dividends “has become challenging to maintain” as the £240m cost of its dividend outstrips free cash flow. He predicted the total dividend will be cut to £150m and also warned that the recent slump in business confidence could prompt a further decline in the number of letters it carries.
Severn Trent profits rise despite higher summer costs. Profits continued to flow at Severn Trent (SVT) last year, giving shareholders a boost as they eye the Labour Party’s threat to nationalise the water industry. Pre-tax profits rose to £563m in the 12 months to the end of March, up from £527m last year. Turnover rose by 4.2% to almost £1.8bn. The strong results came despite last year’s hot, dry summer, which the company said had cost it £10m in direct costs and a further £12m in operational recovery. Liv Garfield, chief executive of Severn Trent, said it had been “a year where our teams have really stepped up”, including in response to “customer needs in the face of one of the hottest and driest summers we’ve seen”.
