WH Smith has unveiled plans to return £90 million to shareholders despite joining the list of retailers cautious over what will happen to consumer spending in the coming year.

Kate Swann, the chief executive, today said that £60 million would be paid out through a special dividend of 33p per share, with a further £30 million returned to investors in share buybacks.

She said that the move reflected the group’s confidence in its business going forward.

It came despite a trading statement that showed like-for-like sales across WH Smith’s high-street stores fell 3 per cent in the 21 weeks to January 26.

Like-for-like sales at its travel outlets in railway stations and airports were up 1 per cent in the 21 week period.

Sales in the high-street were expected to fall given the group's focus on improving margins and selling fewer CDs and DVDs.

Ms Swann, who stands to gain up to £5 million under a new incentive plan at the group, said: “We said at the time of our prelims in October that we would review the group structure and that is what we have done.

“While the environment is tough we tend to be less impacted than other retailers as our transaction value is less than £5.

“We are not immune to a slowdown but while people may cut back on buying a fridge they will still buy a newspaper.”

Ms Swann added that more than 20 travel outlets would open at motorway service stations this year, while WH Smith would also continue to roll out more shops in Post Office branches.

The chief executive, rumoured to have been sounded out for the top job at Kingfisher before the appointment of Ian Cheshire, added that WH Smith still had an important role to play on the high street despite the rapid growth of the internet.

"We have gone from strength to strength," she said.

Nick Bubb, analyst at Pali International, said: “Investors should like the trading statement and we see the shares responding well today, despite the good run they have had so far this month.”

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