British newspapers, books and stationery retailer WH Smith said its strategy of improving margins and cutting costs rather than pushing sales was proving its worth in a tough market.

Shares in the firm, which trades from over 600 town centre stores and over 560 outlets at airports, train stations, hospitals, motorway service stations and work places, rose over 4 per cent after it said profit growth in the 21 weeks to January 21st was in line with expectations even though sales at stores open over a year fell 5 per cent.

That represented a slight improvement from a like-for-like sales fall of 6 per cent in the 10 weeks to November 5th.

Like-for-like sales fell 6 per cent at its high street stores and were down 3 per cent in the travel division.However, 220-year-old WH Smith said gross margins improved in line with plan in both divisions and costs were tightly managed.

WH Smith, with its relatively low average transaction value of £5.50 in its town centre business and £3.50 at its travel outlets, has fared better than most during the downturn.

Reuters