THE GROUP FD of WH Smith is to take on an operational role at the stationery, newsagent and bookselling chain as part of a management reshuffle triggered by the departure of its long term chief executive.
As of 1 July 2013, Robert Moorhead will take on the role of group finance director and chief operating officer, having joined WH Smith in 2004 as retail finance director before being appointed group FD in 2008.
Moorhead will take up the newly created position when Kate Swann steps down on 30 June after nine years as chief executive. Swann will be replaced by Steve Clarke, managing director of the group’s high street business.
Swann is credited with overhauling WH Smith by streamlining the company structure, separating its news distribution business from its retail arm and cutting down its high street estate in favour of expanding into airports and railway stations.
Having joined the company a year after Swann, Moorhead was undoubtedly heavily involved with changes to the retail division, and as group FD will have overseen the buyback programmes that have made WH Smith popular among investors and analysts.
Including a £50m share buyback announced in preliminary results for the year to the end of August, WH Smith will have returned £450m to shareholders since 2007.
The retailer also announced a 10% year-on-year increase in pre-tax profits to £102m, in spite of revenues shrinking 2.3% to £1.2bn. The jump in profits was largely driven by cost-cutting, with savings of £17m delivered in the year.
These came from a number of areas across the business, including the rollout of self-scan checkouts to 109 high street stores, an energy efficient lighting initiative and other operational efficiencies. The company also earmarked an additional £12m of cost savings, bringing its total target to £25m over the next three years to 2015.
“The worry is that Swann’s departure signals that the retailer’s strategy of cutting costs is running out of steam,” Matt Piner, at retail consultants Conlumino. “If this is the case, then it means the business will have to rely on sales growth to boost profits.”
News of Swann’s departure led to shares falling by 4% to 625p, however Moorhead and Clarke have the benefit of taking over a business on fairly stable footing. In its latest results, the company raised its dividend for the full year, representing a 20% increase on the prior year.
“The proposed increase in final dividend reflects the board’s confidence in the future prospects of the group and the continuing strong cash generative nature of the business,” the company said.
Previously, Moorhead worked as group finance director at Specsavers Optical Group in 2002, and finance and IT director of World Duty Free Europe in 2001. He held a number of roles at B&Q and Kingfisher Group which he joined in 1991. He started his career at Price Waterhouse.