Finance
UK regulator investigates WH Smith after accounting failures hit profits
Published by Global Banking & Finance Review®
Posted on December 19, 2025
3 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 19, 2025
3 min readLast updated: January 20, 2026
WH Smith faces a UK investigation for accounting failures, leading to a share drop and dividend cut. The company plans to recover bonuses and rebuild trust.
By Yamini Kalia
Dec 19 (Reuters) - Britain's financial regulator is investigating WH Smith for potential breaches of listing and disclosure rules, it said on Friday, after accounting failures forced the travel retailer to restate results.
The company's shares fell as much as 7% on news of the probe and as it reported annual profit that was slightly below expectations and cut its dividend.
WH Smith has had a turbulent year with two profit warnings and the abrupt exit of its CEO last month following a review which revealed inflated earnings in North America, its second-largest market once seen as a growth driver.
WH Smith now plans to recover overpaid bonuses from former senior executives and said it will fully cooperate with any regulatory inquiries.
The UK's Financial Conduct Authority did not provide any further details on its investigation.
REINING IN AMBITIONS
"The Board and I are acutely aware that we have much to do to rebuild confidence in WH Smith and deliver stronger returns as we move forward," interim CEO Andrew Harrison said.
WH Smith, which had streamlined its business to operate as a pure-play travel retailer, is also considering exiting some underperforming businesses and markets.
It is reviewing its InMotion tech business, and plans to exit some unprofitable fashion and speciality stores of its Resorts business.
"WH Smith has become a case study in how quickly a dependable retail business can unravel when trust is shaken," said eToro analyst Mark Crouch.
Since the accounting issues surfaced in August, WH Smith's shares have lost nearly 40% of their value. They recovered some early losses on Friday and were down 3.7% at 660 pence by 1027 GMT.
Chair Annette Court said she was "actively working" on finding a permanent CEO to steer the company's turnaround.
DIVIDEND CUT
After twice delaying its annual results, WH Smith cut its dividend on Friday for the first time since the pandemic.
Its headline pre-tax profit for the year ended August 31 was 108 million pounds ($144.5 million), slightly below analysts' 110-million-pound estimate, with fiscal 2026 profit forecast to be at roughly similar levels.
JP Morgan analysts expect 2026 to be a year of "re-based expectations and re-investment" at WH Smith, with a "more focused" strategy and "higher quality" travel portfolio.
($1 = 0.7473 pounds)
(Reporting by Yamini Kalia and Raechel Thankam Job in Bengaluru; Editing by Rashmi Aich, Elaine Hardcastle and Susan Fenton)
A dividend is a portion of a company's earnings distributed to its shareholders, typically paid in cash or additional shares, as a reward for their investment.
Accounting failures occur when a company inaccurately reports its financial status, leading to misleading financial statements, which can result in legal consequences and loss of investor trust.
A profit warning is a statement issued by a company indicating that its earnings will fall below market expectations, often leading to a decline in stock price.
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