Strengthening Finances and Navigating Uncertainty
- WH Smith raises £166m through share placing
- Discount of 4.0% to the closing share price
- Total group revenue for March fell by 25%
- Revenues down by 85% year-on-year in latest week of trading
- Expected revenue decline of £114m in April
- Reduction in operating profit of £39m compared to last year
- CEO Carl Cowling: ‘We are a resilient business’
- Continued focus on managing cost and navigating uncertainty
WH Smith has raised £166 million through a share placing to bolster its finances amid the ongoing coronavirus pandemic. The company issued 15,751,826 new ordinary shares at 1050p per share, with existing and new investors. This move represents a 4.0% discount compared to the closing share price of 1,094 pence on April 6th. Following the announcement that it planned to issue equity for a £120 million lending facility, WH Smith can now access the loan, which was dependent on the raised equity. The group also revealed a 25% drop in total group revenue for March and an 85% decline year-on-year in the latest week of trading. Revenue is expected to fall by approximately £114 million in April, marking a 90% decline year-on-year with a reduction in operating profit of £39 million compared to last year. CEO Carl Cowling stated: ‘While the Group made good progress in the first half of the financial year, the outbreak of Covid-19 has had a significant impact on both our Travel and High Street businesses. We continue to operate around 30% of our UK store portfolio ensuring we keep stores open in communities that need our services at this critical time.’ He added: ‘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.’
Factuality Level: 10
Factuality Justification: The article provides accurate information about WH Smith’s share placement, its impact on the company’s finances, and the CEO’s statement regarding the situation during the pandemic.
Noise Level: 3
Noise Justification: The article provides relevant information about WH Smith’s efforts to raise funds during the pandemic and its impact on revenue, but it lacks in-depth analysis or exploration of long-term trends or consequences of decisions.
Financial Relevance: Yes
Financial Markets Impacted: WH Smith’s share price and stock market
Financial Rating Justification: The article discusses WH Smith raising £166m through a share placing to strengthen its balance sheet and liquidity position during the pandemic, as well as the impact of the pandemic on its revenue and operating profit. This directly pertains to financial topics and impacts the company’s stock market performance.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: No extreme event mentioned in the article.
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