WH Smith

feels the heat

n Retailer WH Smith today showed the impact of the heatwave on sales as it confirmed that temperatures had kept shoppers away from the high street.

In the first update from a major UK retailer since the start of the hot spell earlier this month, WH Smith said its UK retail business would deliver full-year results below expectations.

As well as reduced shopper numbers, the group said it had endured a highly competitive sales environment and seen pricing pressure in CD sales.

The problems mean like-for-like sales from WH Smith's high street business - comprising 550 stores - are likely to be flat in the six months to August 31.

It further warned that the impact of the Iraq war and the SARS virus on airport passenger numbers had led it to reduce forecasts for its UK travel retail business, an operation featuring 220 airport and train station outlets.

Analysts had been expecting full-year operating profits for the UK retail arm in the region of £93m, already £4m lower than a year earlier.

WH Smith shares fell more than 7 per cent in early trading as the company issued its warning that results in the UK would be below market expectations.

n Hilton: Leisure group Hilton today posted a 15 per cent fall in underlying half year pre-tax profits to £110.5m after seeing its hotels suffer from the impact of the Sars virus and the war in Iraq.

n Rentokil: Services company Rentokil Initial has said it is confident of raising its full-year dividend by 10 per cent after interim figures showed a 7.4 per cent rise in profits to £200.5m and a 6.5 per cent lift in turnover to £1.22bn.

Chief executive James Wilde said he was confident improved living standards in the ten countries expected to become members of the European Union next year would provide Rentokil with "considerable opportunities".

Unveiling interim results this morning, Mr Wilde said: "The main thrust for our growth over the next five years will be focussed on Europe.

"We see the development of a pan-European business for our services, assisted by the progressive lowering of barriers to trade within the European Union."

n Marconi: Telecoms equipment group Marconi this morning said trading conditions remained "very tough" after announcing operating losses of £43m in the three months to June 30.

n Yell: Telephone directories group Yell reports strong turnover growth in its UK and US businesses and said it was "well on track" to meet full year expectations.