The Financial Conduct Authority has launched an investigation into WH Smith, following an accounting error in the retailer's North American division earlier this year.

WH Smith cut its profit guidance by £30m in August, leading to its share price falling by over 40%. As a result, Deloitte was appointed to conduct a review and a remediation plan was put in place.

In its preliminary results, WH Smith reported that its group revenue increased by 5% in the year to 31 August to £1.55bn, while its profit before tax and non-underlying items dropped by 5% to £108m.

The retailer has also proposed a final divided of six pence per share, resulting in a full-year dividend of 17.3 pence per share, maintaining its dividend policy of 2.5 times cover.

Interim group chief executive at WH Smith, Andrew Harrison, 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.

"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.”

In the 13 weeks to 31 August, WH Smith delivered like-for-like revenue growth of 3%, with its UK division also recording the same revenue growth, reflecting softer passenger numbers through the summer period.

In the 2026 financial year, the retailer expects to deliver total revenue growth of between 4% and 6%, while it also expected to record profit before tax between £110m and £115m.

Following the preliminary results announcement, shares in WH Smith dropped by over 5%, leading to its share price dropping by 45% in the year-to-date.

Head of markets at interactive investor, Richard Hunter, described the year as an "annus horribilis".

He added: "Unfortunately, the group has inevitably been impacted by the wider economic uncertainty, especially in its key UK and North American markets. At the same time, part of its product suite such as books can be purchased online prior to travel, while an increasing international business adds the potential complication of currency headwinds. These factors are quite apart from the growing competition for share of customer spend, especially at railway stations and airports.

"The lack of a bounce to the update, when perhaps the bad news should already have been factored in, is proof if it were needed that investor confidence is sorely lacking. The slump has also prevented the group from recapturing its pre-pandemic glories, instead of which the share price is 74% lower than the levels of December 2019. With so much investor confidence damage to repair, a market consensus which has reduced from a previous buy to stand at a hold for the time being is of little surprise."

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