WH Smith in the red in London after Fca investigation and below-expected accounts
The UK financial regulator has launched an investigation into the company for potential breaches of listing and disclosure rules, linked to accounting errors that forced the company to revise its results downwards
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(Il Sole 24 Ore Radiocor) - Stormy session for WH Smith on the London Stock Exchange (FT-SE 100 ), in reaction to the investigation launched by the Financial Conduct Authority, announced along with the below-expected annual accounts. As a result, the stock of the chain of shops specialising in travel sales moved downwards. The decline since the beginning of the year is about 45%.
The Fca, the UK financial regulator, announced that it has opened an investigation into WH Smith, for potential breaches of listing and disclosure rules, linked to accounting errors that forced the company to revise its results downwards. Last month, the company announced the resignation of its CEO after the errors surfaced in August. An independent audit revealed overstated profits in its North American division, the group's second largest. Wh Smith, which has twice postponed the publication of its annual results due to an audit of its accounts, announced a pre-tax profit of £108m for the year ending 31 August (up from £114m in the previous year), compared to analysts' expectations of £110m, on revenues of £1.55bn (+5%).
On 19 November WH Smith announced 'a comprehensive remediation plan', which 'is being implemented and is proceeding at an accelerated pace', a statement said. Among other measures, the company intends to recoup excess bonuses paid to its former executives as a result of the performance correction and is considering options for some of its non-core, loss-making US operations. In particular, the company is reviewing its InMotion business, which specialises in selling electronic and digital accessories mainly at airports, and is divesting some unprofitable fashion and specialty shops in its Resorts division. "It has been a difficult end of the year for WH Smith. The board and I are acutely aware that we still have a lot of work to do to restore confidence in WH Smith and deliver improved returns in the future,' said interim CEO Andrew Harrison, pointing out that after the sale of the High Street business (city centre miscellaneous shops) in the UK and Funky Pigeon, the group has become 'a global travel retailer'. For 2026, the group expects pre-tax profits virtually unchanged at £100 million and £115 million.
