Newspapers, books and stationery retailer WH Smith plans to expand domestically and internationally, focusing on new stores at travel hubs and in growing overseas markets which are helping offset weakness on Britain's high streets.

WH Smith, which operates over 1,100 stores primarily in Britain, said on Thursday that profit before tax rose to 66 million pounds in the six months ending 29 February 2012, up from 64 million pounds during the same period in 2011.

We expect the trading environment to be challenging, Chief Executive Kate Swann said in a statement.

However we are a resilient business with a consistent record of both profit growth and cash generation and we have opportunities for growth in the UK and internationally.

The retailer said it planned to open 20 new shops in India, Australia, Qatar, Gibraltar, Dubai, Fiji and Saudi Arabia, taking its total number of overseas stores opened or agreed to 80. It runs the international stores through a mixture of franchises, joint-ventures and direct leases.

We will continue to grow our international channel in a low risk and pragmatic way, utilising our different operating models, the company said.

WH Smith said its resilient Travel unit, which includes stores at airports, train stations, and motorway service stations, performed well with operating profit up 8 percent to 27 million pounds from 25 million pounds. The division plans to open 17 new units in Britain in the second half of the year.

Operating profit at its High Street division was flat at 47 million pounds with like-for-like sales down 5 percent.

With British incomes squeezed by muted wage growth and high unemployment during a time of government austerity, many high street stores have struggled or gone out of business altogether.

In the High Street, it was another resilient performance, really demonstrating the robustness of the business model there, particularly in challenging trading conditions, Swann told reporters during a conference call.

The 220-year-old group said it achieved cost savings of 8 million pounds at its High Street division in the first half, which was 2 million pounds ahead of plan, and that it expected a further 3 million pounds in savings in the second half.

Swann added she did not expect this summer's Olympic Games to boost profitability as operating costs at its London shops will increase due to restrictions on when products can be delivered to the stores.

WH Smith shares were down 1.4 percent at 539.5 pence by 0726 GMT, underperforming a 0.4 percent stronger FTSE 250 midcap index <.FTMC>.

Philip Dorgan, analyst at Panmure Gordon, said WH Smith had put in another strong performance with earnings per share growth of 14 percent not to be sniffed at.

Shareholders have been given a generous 15 percent hike in the dividend, he wrote in a note to clients. We think that the catalyst for a share price re-rating will be an improved outlook for passenger numbers in Travel.

(Reporting By Drazen Jorgic; Editing by Paul Hoskins)