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WH Smith PLC on Friday said the UK financial watchdog has launched an investigation into the company following an accounting error within its US business, as it reported its delayed annual results and cut its annual dividend. The UK Financial Conduct Authority has commenced an investigation into the company following a review by Deloitte in November, which led to Chief Executive Carl Cowling’s resignation. Deloitte’s probe had found that the accounting treatment for supplier income adopted by the US division was not consistent with the group’s accounting policy and the requirements of the relevant accounting standards. The Swindon, England-based travel retailer said it plans to recover overpaid bonuses from former executive directors following the restatement of profits in financial 2023 and 2024. WH Smith’s adjusted pretax profit fell 3.8% to £102 million for the year ended August 31 from £106 million the year before. Meanwhile, pretax profit from continuing operations slumped 97% to GP2 million from £65 million a year prior. This was despite revenue improving 5.4% to £1.55 billion from £1.47 billion. The retailer proposed a 6.0 pence per share final dividend, cut from 22.6p a year earlier. Its total dividend has been reduced 49% to 17.3p from 33.6p. In the final 13 weeks of the year, like-for-like revenue grew 3%. This sales trend has continued into the first 15 weeks of the new year, the firm said. Looking ahead to financial 2026, WH Smith said it expects to deliver a pretax profit before non-underlying items of between £100 million to £115 million, and anticipates a total revenue growth of between 4% and 6%. It said it has ‘acted quickly’ to put in place a remediation plan, which is designed to strengthen governance and controls to protect value and restore trust, make sure processes are aligned across the group, and sustain this through cultural change involving training and monitoring. ‘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,’ said Andrew Harrison, the interim group chief executive. ‘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.’ Harrison added: ‘Following the sale of our UK High Street business and Funky Pigeon during the year, we are 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.’ Shares in WH Smith fell 3.3% to 662.50p on Friday morning in London. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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