Graeme Evans WH Smith posted an 8% rise in half-year profits yesterday after stronger trading at its travel locations offset a sales drop on the high street.

Graeme Evans

WH Smith posted an 8% rise in half-year profits yesterday after stronger trading at its travel locations offset a sales drop on the high street.

The retailer said the surplus of £64m for the six months to February 29 reflected a stronger focus on core product ranges, such as books and stationery, and £4m of cost savings at its high street arm.

Chief executive Kate Swann said she remained confi- dent in the company's performance for the full year, despite an uncertain economic environment.

Total sales rose by 2% to £734m in the half-year, although the figure was down 2% on a same-store basis. It said the drop reflected its strategy to rebalance the mix of the high street business, with less dependence on entertainment products such as CDs and DVDs.

Travel stores made up for some of the 3% like-for-like sales drop in the high street business, with same-store sales up 1%, and by 14% on a total basis.

The division, which saw profits increase by 13% to £17m, now operates from 433 units, including motorway service areas, airports and train stations.

High street profits fell by £1m to £50m. The division has 546 stores and recently started the process of integrating Post Office counters into a number of its sites.

Yesterday's overall profits figure was higher than the £60m consensus forecast in the City.

Nick Bubb, analyst at Pali International, upgraded his full-year profit forecast by £2m for the full year, to around £75m.

He said: "Management express their usual caution about the retail outlook with the interims today, but they have managed to increase profits and earnings very well over the last few years, despite falling like-for-like sales."

Bubb said the company had done well by engineering better margins and growing the travel division.

WH Smith said like-for-like sales in books were ahead 2%, while stationery sales were flat. News and impulse sales fell 2% in a weak market.

Meanwhile, shares in home shopping firm Findel dived by nearly 40% yesterday after profits were hit by an increase in customers slipping behind on payments.

The company, which sells under names such as Cotswold Company, Kitbag and Ace, said it was adding £5m to its bad debt provision for the year ended March 31, 2008.

The group's bad-debt provision before the £5m change is understood to have been £83m.