WH Smith and John Menzies hit by virus travel disruption

Travel disruption caused by the coronavirus pandemic has hit trading at WH Smith and airport services firm John Menzies.

High-street stalwart WH Smith told investors on Tuesday that it had extended financing arrangements with its banks after the pandemic forced stores to shut and particularly hit its travel sites.

However, it said recent trading had been ahead of expectations during lockdown.

The retailer said online growth had helped to offset some of the impact of store closures, with the company now burning through less money each month than previously predicted.

It said it expected to post a cash burn of between £12 million and £17 million each month for the current quarter, down from a previous prediction of £15 million to £20 million.

WH Smith stores with Post Office services have remained open during the latest lockdown, although large swathes of its store estate have been hit by restrictions.

The chain said its high-street sales in January were at 74% of pre-Covid levels.

It said it had been buoyed by strong online trading, with its online card and gift business Funky Pigeon delivering its strongest Valentine’s Day performance on record.

WH Smith’s travel operations saw sales in January and February around a third of pre-Covid levels amid restrictions.

Separately, aviation services business John Menzies swung to a loss for 2020 after the pandemic hit demand for flights.

The group forecast a delayed recovery in its revenues amid uncertainty over the prolonged impact of restrictions.

It told shareholders on Tuesday that it had dropped to a £120.5 million pre-tax loss for 2020, from a £17.9 million profit the previous year.

It said the fall in flight activity had led to a 49% year-on-year reduction in flight volumes in ground handling and fuel services.