WH Smith delays results by more than a month as accounting struggles persist
WH Smith has delayed the publication of its results by more than a month as it wrestles to get to the bottom of accounting issues that caused profit expectations to be overstated by tens of millions of pounds.
The global travel retailer was due to publish its preliminary results on 12 November, but has now pushed the date back to 16 December, as audit firm Deloitte investigates flaws in its accounting systems.
“The revised date will provide the company time to respond to the Deloitte review and allow the group’s auditors, PricewaterhouseCoopers LLP, to complete the required audit procedures,” the firm said.
WH Smith saw its shares tumble in August after it admitted an overstatement of £30m in its expected profit for its North America division.
The FTSE 250 firm said the error was due to “the accelerated recognition of supplier income in the North America division.”
It more than halved its expected trading profit in North America, from £55m to £25m, as a result.
The company’s stock has fallen by more than two-fifths since the start of the year, taking it below a £1bn market value for the first time in years.
WH Smith shares fell 1.1 per cent to 702p on Wednesday morning.
All change at Smith’s
The accounting quandary comes amid a period of intense change for WH Smith as the stationer seeks to transform itself into a travel-focused operation.
Earlier this year, the company sealed a deal to offload its high street stores to private equity firm Modella in a £40m deal.
The move will see the chain disappear from Britain’s high street, where it has had a presence for more than a century, after Modella said it would rebrand the stores to ‘TG Jones’.
In July, WH Smith also sold its greetings card business, Funky Pigeon, to Card Factor in a £24m deal.
The changes will see the business return to its 19th-century roots as a travel retailer, where it began with stores and kiosks selling books and newspapers inside train stations.