WH Smith thanks boss Kate Swann with £4m bonus

WH Smith boss Kate Swann looks to be in line to pick up a £4 million bonus following a forecast-beating set of results.

The high street retailer made profit for the year to August of £89 million, a 9% rise that had the City cooing.

The company, once moribund but revitalised under Swann, is now throwing of so much cash that it feels able to push up its final dividend by 18% to 13.3p and return another £50 million to investors via a share buy back programme.

Swann's strategy has been to shift the group away from entertainment such as CDs and towards magazines and news.

The travel arm - shops at railways and airports - accounts for the lion's share of profits at £53 million, a rise of 10%.

Total sales are down 2% to £1.3 billion.

Swann took over at WH Smith in 2003, earning a £3 million payout after the first three years. Another three-year incentive scheme looks sure to come good, after which she will receive a new offer to keep her on board.

"We are creating value for shareholders and we have invested substantially in the business," Swann said

She dismissed a recent Which? survey which put Smith's customer satisfaction levels among the lowest on the high street.

Swann says the magazine made an error by grouping the company with another entertainment retailers. "It is wholly unsurprising that if you asked customers if we have a good range of music, they would say no," she said. Entertainment goods now account for just 5% of sales, down from 25% seven years ago.

Smith's believes it is better placed than others on the high street to ride out economic storm because the average transaction in its stores is just £5.

Swann is sanguine about the future. "We think it will be pretty tight in terms of the economic climate. It will continue pretty much as it is now," she said. "We're not expecting consumer confidence to leap."

The shares added 25.4p to 480.4p, leaving the company valued at £723 million.