Magazine and stationery sales weighed on profits

Pre-tax profits before one-off items rose 29% to �66m, despite a 4% drop in like-for-like sales - with sales at its High Street stores down 6%.

It blamed the fall in sales on its current strategy of refocusing on book sales and away from DVDs and music.

But, its travel business provided some good news, with a 2% rise in sales and profits rising 16% to �36m.

Elsewhere on the retail front, WH Smith added that stationery sales had fallen 3% while magazine sales had been "soft".

"We have delivered another year of strong performance," said chief executive Kate Swann.

"Our travel business grew strongly and our High Street business made further progress with its plan."

Looking ahead, the group warned that the key Christmas trading period would be "very competitive" but added it had "planned accordingly".

Potter effect

The group added that the release of the latest and final Harry Potter book had worked its magic - helping to lift sales in the second half. Excluding it, book sales were flat.

Meanwhile, on the magazines front, the group thanked a new computer system which helped stores to tailor their stock to customer demand. This helped to limit the effect of a drop in sales of partworks and monthlies.

Elsewhere sales of snacks and confectionery also grew.

On the downside, entertainment sales sank 32%, with WH Smith blaming a competitive market, price deflation and its own decision to cut its reliance on the sector.

Profits after exceptional costs came in at �76m - buoyed by the group's decision to close its final-salary pension scheme and by cost savings at its High Street business.

Outsourcing, IT and purchasing changes led to �10m in savings, �3m more than expected.