The Beautiful Swann and The Ugly Duckling

Morningstar columnist Rodney Hobson takes a look at the management changes at WH Smith, the plight of Thomas Cook and the success of the Direct Line flotation

Rodney Hobson 12 October, 2012 | 5:25PM

Beautiful Swann …

Investors were quite right to take fright at news that Kate Swann is to step down next June after nine years as chief executive of WH Smith (SMWH). Despite a 10% rise in pre-tax profits for the year to the end of August, plus a 22% leap in the final year dividend, the shares promptly dropped 45p, a remarkable tribute to the woman who rode to the rescue nine years ago.

There were those who thought that Swann was given the job because WH Smith was in so much trouble that no man wanted the poison chalice. That may well have been right. However, she went on to become one of the finest arguments against male prejudice.

WH Smith was rapidly losing market share back in 2003 as it failed to come to terms with changing conditions on the High Street. While Woolworth, among others, subsequently went out of business and HMV (HMV) and Waterstones slipped into decline, Swann concentrated on lines that sold best, cut out the news distribution business and expanded into airports and railway stations where sales were more promising.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Royal Bank of Scotland Group (The) PLC104.45 GBX-2.38
Thomas Cook Group PLC  
WH Smith PLC984.50 GBX-1.94

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, most recently The Dividend Investor.

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