WH Smith cuts profit outlook as margins shrink and accounting probe deepens

WH Smith announced that underlying pre-tax profit for the year ending 31 August will fall to around £75 million, a drop from the June guidance of £75-£90 million and well below the £108 million recorded in 2024-25. The sharper outlook is attributed to lower trading margins caused by increased promotional activity, cuts to brand marketing and persistent inflation. After selling its UK high-street shops to Modella Capital, the group is concentrating on travel hubs and hospitals, where sales have shown modest growth, especially in airports, rail stations and hospitals.

The company remains under investigation by the FCA and the UK accountancy watchdog over a past audit failure that led to a £50 million overstatement in its North American business, prompting a former chief executive, Carl Cowling, to step down. WH Smith raised £103 million in June through an equity issue to strengthen its balance sheet and fund its transformation plan.