W H Smith extends financing arrangements after 'better than expected' sales

W H Smith has extended its bank financing arrangements, including extending two existing £200m term loans to October 2023, and reported a “better than expected” performance in the first part of 2021.

The retailer has also agreed a new minimum liquidity covenant - a provision requiring it to have a certain amount of cash on hand - for the August 2021 and February 2022 covenant tests. A previously agreed covenant waiver for February 2021 is unchanged.

It said the changes had enabled the group to cancel its existing £120m liquidity loan which was undrawn and due to expire in November 2021. The Group's £200m revolving credit facility is unchanged and the current arrangement is due for renewal in December 2023.

As of 28th February 2021, the group reported it had cash on deposit of £52m with £50m of known commitments and access to £200m of committed loans.

Echoing a trading update in January, the group announced stronger than forecast sales, despite reduced footfall, for the first part of 2021. High Street revenues in January 2021 were at 74% of 2019 levels and 84% of 2019 levels in February 2021. There was also “significant growth” online.

On the Travel side, total revenue in January 2021 was 35% of 2019 levels and 33% of 2019 levels in February 2021. The company will announce its interim results on 29th April.

The firm said its cash burn, the rate at which a firm uses up its capital, had also improved. It said: “As a result of our better than anticipated trading performance since the start of January 2021, our cash burn has improved. We now expect the monthly cash burn over the period January to March 2021 to be approximately £12m-£17m versus the previously guided £15m-£20m per month.”