New funding to support global growth plans at WH Smith

WH Smith described the major new financing that will support its global growth plans as the retail business seeks to seize the opportunities.

The listed giant has successfully entered into new bank financing arrangements and launched a potential offering of around £ 325million of senior unsecured convertible bonds guaranteed.

The new bank financing arrangements include a revolving credit facility of £ 250million, increased by £ 200million, and is provided by an expanded syndicate of lending banks.

In addition, the bond issue will provide £ 50million of new capacity for WH Smith to fund the opening of approximately 100 new earned and unopened travel stores over the next three years, alongside new ones. growth opportunities. The remainder of the proceeds will be used to partially repay existing term loans of £ 400million from the acquisitions of Marshall Retail Group and InMotion.

WH Smith said the opportunities to open new travel stores are found in all territories and, in particular, in North America.

Going forward, the company expects a substantial amount of new space to become available, including a number of new tenders for retail space at international airports and WH Smith is fine. positioned to take advantage of this opportunity to develop its store pipeline.

In the UK, WH Smith has identified new opportunities for new retail space in the travel industry and expects to gain an average of 10-15 new stores each year across its three key channels, particularly in hospitals. . WH Smith already has a strong presence in this area with around 130 stores in 100 hospitals and has identified up to 300 hospitals in the UK that could take one of its three hospital formats: a traditional WH Smith store, a Marks & Spencer Simply Food store or Costa Coffee store.

WH Smith said he continued to trade well despite the impact of the pandemic and maintained his focus on managing costs and cash consumption to protect the group’s balance sheet and liquidity position .

As restrictions ease and footfall is expected to increase, the company expects to improve the company’s profitability.

In interim results, WH Smith recorded a pre-tax loss of £ 38million in the six months ending February 28 on income that fell 44% to £ 420million.

Managing Director Carl Cowling said: “Thanks to the exceptional work of all of our colleagues across the company, the group has adapted well to the changing business environment and we are in a strong position as our markets begin. to straighten up. “

He added: “We continue to see encouraging signs of a recovery in North America and we are delighted to have won significant tenders in the United States during the period.

“We have a strong pipeline of new store openings with approximately 100 stores already won and scheduled to open in Travel over the next three years, the majority of them in North America. We are an important business partner for our travel owners and we are well positioned to take advantage of new space opportunities that will arise in the coming months.

“In a challenging retail environment, our High Street business generated resilient performance. At the same time, we are pleased that our online businesses, including, have achieved a record performance.

“We have positioned the group well. We are financially strong as a result of the actions we have taken, and the new financing arrangements also announced today will put us in an even stronger position to capitalize on and benefit from the growth in our key markets. of the many exciting opportunities to come. “

Barclays, JP Morgan Cazenove, BNP Paribas and HSBC act as joint global coordinators and associate bookrunners for the offering. Santander is acting as associate bookrunner for the offer. Some of the associate bookkeepers or their affiliates are lenders under bank facilities which are intended to be partially repaid with the proceeds of the issuance of the Bonds.

NM Rothschild Sons acts as financial advisor to the company.

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