WHSmith has announced it is to separate its news distribution arm from its high street retail business.
The decision to create two distinct businesses came as the company revealed its interim results for the six months to the end of February. While the figures show the company's news distribution division is up 5% to £20m in terms of profit, like-for-like sales are down 2% to £587m. Like-for-like sales in high street stores are also down 6% to £771m.
Commenting on the results, group chief executive Kate Swann said: "News distribution continues to make good progress, delivering an industry-leading performance through service improvements and tight cost control. We continue to be cautious about consumer spending but remain confident in the outcome for the full year."
The separation is likely to be enacted through a demerger of the retail business. Swann added: "It will enable these distinct businesses to benefit from increased focus and pursue their strategies to best effect."
With the Office of Fair Trading (OFT) likely to issue a new draft opinion on the distribution arrangements for newspapers and magazines this year, the performance report also states that the company is "well placed to adapt to any changes in the market".
Meanwhile, members of the Association of Newspaper and Magazine Wholesalers (ANMW) have announced a six month review of its structure and services. The review has been prompted by recent wholesaler consolidation.