“Whatever you say about 11 September, there was already a significant downturn going on,” said Richard Handover, the chief executive.The comments came as WH Smith reported an 8 per cent fall in profits to £130m for the year to August. The deterioration in the American business overshadowed a strong contribution from the main WH Smith retail chain in the UK. Sales grew by 5 per cent on a like-for-like basis with growth in all categories such as books, stationery, and magazines. Underlying sales in current trading is even stronger, with growth of 9 per cent.Smith’s is planning to open around 30 temporary stores over Christmas for the first time. The outlets will be in towns and cities where Smith’s already has branches but where there is scope to attract further sales over the key Christmas period.Mr Handover said future growth would come “doing the basics better” with more exclusive merchandise and higher margin own-brand products including books and magazines. There will also be 25 new stores a year.The news distribution business is no longer up for sale following the collapse of the £215m deal with ABN Amro Private Equity.”It’s a good defensive business to have in difficult times,” Mr Handover said.Full-year profits of £130m came before £16m of exceptional items including £5m of fees for the failed news distribution deal. The other £11m was to cover a writedown of the group’s digital assets, including the Helicon digital publishing unit acquired in 1998, which has been put up for sale.Smith’s has abandoned its previously stated aim of controlling 30 per cent of the online book market after admitting that its share was less than 10 per cent.ABN Amro, Smith’s brokers, cut its current year profit forecast by 6 per cent to £132m.
The shares rose a penny to 466p though they still trade on a low stock market rating. John Baillie at SG Securities said the shares were good value though the US business was vulnerable to a continued downturn.. Business activity in the United States slumped in the wake of the 11 September terrorist attacks while the jobless total rose again, highlighting weakness in the American economy. Business activity in the United States slumped in the wake of the 11 September terrorist attacks while the jobless total rose again, highlighting weakness in the American economy.
The number of manufacturing companies reporting that business conditions had worsened outnumbered the optimists by 27 per cent compared with 7 per cent in September.The fall in the index, which is produced by the Federal Reserve Bank of Philadelphia, was the 11th straight month of contraction. Almost six out of 10 companies told the Fed they did not expect to see any recovery until at least spring next year.Michael Trebing, an economist at the bank, said about half the companies polled attributed a sharp drop in orders and activity to the attacks on New York and Washington. “These firms expect these reductions to be short in nature,” he said, adding that there had been a “modest lengthening of the time expected for recovery”.In the meantime, the government said the number of initial jobless claims increased by 6,000 to a seasonally adjusted 490,000 for the week ended 13 October, well above Wall Street’s expectations.
“The level is just slowly creeping upward to a pretty severe recession level,” said Kurt Karl, chief economist at Swiss Re in New York. “It’s a lot of people out of work and growing.”In a sign workers are remaining jobless, the number continuing to claim state benefits for the week ended 6 October – the most recent week for which data were available – rose by 152,000 to 3.65 million, the highest in more than 18 years.More than 650,000 job cuts have been announced in the past few months as companies around the world wrestle with slowing growth and plunging demand. Economists fear that the rising toll of job cuts will soon hit consumer confidence, which so far has held up in the face of mounting bad news.Meanwhile, Al Broaddus, the president of the Federal Reserve Bank of Richmond, said central bankers were ready to cut interest rates again to help growth recover.”I can assure you that we at the [US] Fed will continue to do everything we can to foster that recovery,” he said, adding that he was confident the economy would “recover fully” from last month’s terrorist attacks.. A financial consultant has been struck off the professional register after he seriously misled investors about flotations he was handling for two companies in 1998 and 2000. A financial consultant has been struck off the professional register after he seriously misled investors about flotations he was handling for two companies in 1998 and 2000.
John Hallworth must also pay legal costs of £15,000 following an investigation by the Securities and Futures Authority.
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