WH Smith launches £325m bond offering as retailer swings to first-half loss
WH Smith warned it could breach its covenant tests next year as it revealed it swung to a first-half loss and launched a £325m bond offering.
The newsagent chain announced yesterday evening that it was possible that “the group would not meet the conditions of the August 2022 covenant tests”.
It posted a loss of £17m in the six months to February, down from profit of £80m in the previous year. Group revenue was down 44 per cent at £420m.
The retailer also announced financing plans to offer approximately £325m of guaranteed senior unsecured Convertible Bonds due 2026. The proceeds will be used to open around 100 new stores at travel hubs, with 60 of those set to launch in the US.
WH Smith said it expected to return to pre-pandemic revenue levels within “the next two to three years”.
“At that point, we expect the balance of revenue to be more heavily weighted towards travel than high street, and within the high street business, we expect to see an increased weighting towards our online businesses,” it said.
WH Smith chief executive Carl Cowling said: “We have a strong pipeline of new store openings with around 100 stores already won and due to open in travel over the next three years, the majority of these in North America.
“We are an important retail partner for our travel landlords and we are well positioned to take advantage of further space opportunities that will arise over the coming months.
“In a difficult retail environment, our High Street business has generated a resilient performance. At the same time, we are pleased that our online businesses, including funkypigeon.com, have delivered a record performance.”