WH SMITH, the book and magazine retailer with more than 1,100 UK outlets, hit its highest price since at least 2006 after saying it will buy back more shares and that full-year earnings will be “at the top end of market expectations”.

The company will buy shares for £50 million in fiscal year 2013, after spending the same amount in the year ending August 31st.

The stock advanced 2.7 per cent to 597.5 pence, extending the gain this year to 12 per cent. “Cash continues to be generated, a new buyback programme is in place and returns will continue to rise,” Philip Dorgan, an analyst at Panmure Gordon, said in a note. The announcement today “is reassuring on all fronts”, he said.

WH Smith has had “good performance” at its stores based in towns and at so-called travel outlets at sites including train stations and motorway service stations, the company said in a separate statement.

“We continue to manage costs tightly and have delivered strong gross margin gains driven by good mix management” at the travel stores, the company said.

WH Smith is due to release full-year earnings on October 11th. – (Bloomberg)