WH Smith warns on profit and plans equity raise as airport passenger numbers dip

Susannah Streeter, chief investment strategist at Wealth Club, said: ‘WH Smiths’ travel hubs were the jewel in the crown of its operations.

“It’s why the high street division was sold off so the company could concentrate on what was a lucrative part of the market.

“Travellers usually present a captive trade, willing to splash out on treats to keep them occupied on journeys.

“But with the conflict in the Middle East disrupting flight routes and holiday makers slower to book trips away, the company is suffering.

“Now WH Smith has been forced to go cap in hand to investors.

“The company is proposing a capital raise of up to approximately 26 million new ordinary shares – representing around 20 per cent of its existing share capital to strengthen its balance sheet.

“While participation of executives in the capital raise is a show of confidence that better days will be ahead, there’s still been a pretty brutal market reaction given the share dilution and the immediate outlook.

“Shares fell 16 per cent in early trade and are down by more than 60 per cent over the year.”