Coronavirus: WH Smith raises £165.9m through share placing
WH Smith has raised around £165.9m through a share placing to shore up its balance sheet amid the coronavirus crisis.
The retailer was forced to tap investors for a cash injection after the outbreak forced it to close its travel business and the majority of high street stores.
WH Smith can now access a £120m revolving credit facility that was dependent on new equity being raised.
The retailer said yesterday that it expects group revenue this month to be down 90 per cent year on year to £114m, with a £39m drop in operating profit.
WH Smith said it is working on the basis that 95 per cent of its stores will remain close with gradual reopenings, which could see revenue fall between 80 per cent to 85 per cent between April and August.
The company said: “It is clear that Covid-19 is having a very significant impact on our business. However, what is uncertain is the duration of the pandemic and as such the effect it may have on the Group’s financial performance.”
WH Smith has estimated that it will be able to reduce group cash operating costs by 60 per cent, around £200m, and capital expenditure by around £29m.
Chief executive Carl Cowling said: “We are a resilient business and with the new financing arrangements announced today, together with our continued focus on managing cost, we are in a strong position to navigate through this time of uncertainty and are well positioned to benefit from the normalisation and growth of our key markets.”