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WHSmith (SMWH) and Card Factory (CARD) make gains in London
British retailer WHSmith (SMWH) closed 2% higher on Tuesday after its revenue decline for the first two months of 2021 was not as steep as feared.
WHSmith said that its core High Street business performed admirably in January and February, with only a 26% and 16% drop in revenue compared to a year ago, which beat the analyst consensus.
The company was also buoyed by brisk online trade over the Valentine’s Day period for its personalised greeting card platform Funky Pigeon, which it acquired back in 2010.
The travel segment continues to weigh heavily though amid COVID-19 restrictions after revenue slumped 65% in January and 67% in February.
However, WHSmith’s robust performance in the early part of the year means that the company is only expected to burn through around £12m to £17m in cash for the quarter to 31st March, which is better than the previous guidance of £15m to £20m.
Last month, analysts at Peel Hunt said that WHSmith should sell Funky Pigeon in order to fund potential market growth in the travel sector after valuing the “non-core” platform at around £300m.
On Tuesday, Peel Hunt said that it remained “keen buyers” of WHSmith shares after stating that there is “plenty to like for the long term”.
During trading on the London Stock Exchange, WHSmith shares jumped up and down before eventually finishing up 1.73% at 1,937 GBX.
Card Factory (CARD) also jumped 4% to 69.60 GBX after Liberum analysts said that the greeting cards and gifts company was on track to make notable share gains by 2024.
Liberum, which believes that there is ample opportunity for growth for Card Factory despite pandemic-related disruptions, set a new buy rating and 100 GBX price target.
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