STRUGGLING retailer WH Smith said its high street shops had delivered an unacceptable performance as it confirmed City forecasts of a 29 per cent drop in half-year profits.

WH Smith said the poor showing by the main retail business had been the culmination of a number of years where it had not fulfilled its potential.

The group said pre-tax profits in the period to February 29 were down by £26m to £65m, while pre-tax losses after exceptional items had climbed to £72m from £54m previously.

However, it said its news distribution and UK travel retail activities performed well in the first half, and the underlying result in its publishing business was strong.

WH Smith confirmed speculation that it was planning to sell its Asia Pacific businesses, saying the sale was under way.

The group said it was cutting its interim dividend to 4p from 6p at the same time last year.

It said its board had allowed private equity group Permira, which has approached it about a potential takeover bid, to check the company's books.

On Sunday, the group said it was cutting 300 jobs at its offices in Swindon and London.

WH Smith said operating profits in its UK retail business had fallen by 39 per cent to £51m.

Recently-arrived chief executive Kate Swann said the group had already taken action to strengthen its senior management team and to address the operational shortcomings of the business.

She said priorities included reduction of central costs, improvements to stock availability and product ranges and strengthening of business controls and processes.