WHSmith has reported a challenging year after issuing delayed preliminary results following an accounting error that has prompted a Financial Conduct Authority (FCA) investigation. During the period, the company sold its High Street operations and funkypigeon.com.
For the year ending 31 August, group revenue increased 5 per cent to £1.55bn, up from £1.47bn the previous year. Revenue growth was recorded across all regions, with the UK up 5 per cent, North America rising 7 per cent, and Rest of the World and other markets increasing 12 per cent.
Despite the revenue growth, headline group profit before tax and non-underlying items fell to £108m from £114m, while headline group trading profit decreased to £159m from £170m. The group anticipates FY26 headline group profit before tax and non-underlying items to be in the range of £100m to £115m.
A Deloitte review identified several “shortcomings” that resulted in the overstatement of US profits by as much as £50m. Following this, WHSmith parted ways with chief executive Carl Cowling, and the board has launched a formal search for a new group CEO.
The company stated that a “comprehensive remediation plan is in place and progressing at pace” in response to the Deloitte findings. Meanwhile, the FCA has begun its investigation into the business.
Andrew Harrison, interim group chief executive, said: “It has been a difficult end to the year for the group. The board and I are acutely aware that we have much to do to rebuild confidence in WHSmith and deliver stronger returns as we move forward. We are acting at pace progressing our remediation plan and are committed to ensuring that we strengthen our financial controls and governance as we move forward.”
He added that following the sale of the UK High Street business and Funky Pigeon, WHSmith is now a pure-play global travel retailer. “Travel retail is a high growth market, and we have attractive market positions in the UK, North America and our international markets from which we are well-positioned to grow,” he said.
Harrison also expressed gratitude to staff, stating: “I would like to thank our colleagues who have shown the utmost commitment and professionalism during an uncertain and busy period for the business.” He concluded: “As interim CEO, my focus is to provide stability and to lead the group with transparency and discipline. WHSmith is a business with an exciting future and I look forward to executing against our clear priorities to ensure we capitalise on the attractive opportunities ahead.”
