High street stationery staple WH Smith confirmed predictions of a fall in sales over the Christmas period, but claimed Smiths was here to stay, thanks to its cost cutting and improved margins.
Sales at stores open a year fell 5% in the 20 weeks to January 20, but chief executive Kate Swann maintained that the balance sheet was getting stronger.
Around £50 million of cash to shareholders via a share buyback programme will take place this month, and the company also bought 2.48 million of its shares at an average price of £6.38.
Swann said in a statement: "During the period we saw a good profit performance across the group. Margin was well managed and costs were tightly controlled throughout the business.
"Looking ahead, we expect the trading environment to remain challenging however we are a resilient business with a consistent record of both profit growth and cash generation, and are confident in making further progress in the year."
In a time where retailers are feeling the pressure on Britain's high streets, WH Smith has worked hard to try and turn its fortunes around, led by Swann's management.
The City's analysts will see today's announcement as 'more of the same' - in August 2012 David Jeary, retail analyst at Investec, told the Huffington Post UK Swann had "perpetually nibbled at cost savings", citing the increase in self service tills, central distribution of books and a general relentless search for improved efficiency as examples.
Speaking about today's results, Nick Hood, business analyst at Company Watch, told the Huffington Post UK while questions about WH Smith's future were bound to raise their head today, having tight cost controls, generating cash and making profits will give Steve Clarke - previously managing director of WH Smith's High Street business, who will replace Swann in the summer - a head start.
"Today's figures from WH Smith will have most retail insiders wringing their hands, whingeing about falling sales and poor customer experience. But Kate Swann continues to focus on what really matters despite the endless top line sales hype which corrupts this embattled sector: making profits, which is what she's paid to do by shareholders and what all stakeholders in the business should hope her successor will keep at the top of their priority list," said Hood.
"The key factor is that margins improved strongly, a boast that very few UK retailers can make about their Christmas trading, as so many of them played busy fools games. Of course there are questions about where the WH Smith retail model is heading, but without the relentless cost control and cash generation of the last few years, we might well have been talking about WH Smith as one of the legion of retail failures past, present or future."
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