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LONDON, April 10 (Reuters) - British books, newspaper and stationery retailer WH Smith raised its payout to shareholders on Thursday, reflecting its confidence in future prospects after it posted a 3 percent rise in first-half profit.
The firm, which has over 1,200 stores, primarily in the UK, said headline pretax profit for the six months to end-February rose to 70 million pounds ($117 million) from 68 million pounds a year ago.
It said it would pay a half-year dividend of 10.8 pence, up 15 percent on the prior year.
Total sales and sales at stores open over a year fell 4 percent, following an established trend. But its gross margin rose by 190 basis points due to a more profitable product mix and cost control.
In WH Smith's travel division, made up of outlets at airports, railway stations, motorway service stations, hospitals and workplaces, total sales rose 2 percent, reflecting some recent improvement in UK air passenger trends.
According to Reuters data, analysts on average expect the firm to post a 3.6 percent rise in 2014 pretax profit to 112 million pounds.
Shares in the company were trading up 1.5 percent at 1,188 pence at 0709 GMT, valuing it at 1.44 billion pounds. ($1 = 0.5971 British Pounds) (Reporting by Paul Sandle and Neil Maidment; Editing by Erica Billingham)