WH Smith issues profit warning, plans £100m share raise amid Middle East war impact
9 reported
WH Smith has issued a profit warning and announced plans to raise approximately £100m through a share issuance, citing a downturn in trading conditions partly due to the war in the Middle East. The retailer, which operates 1,200 outlets globally in airports, railway stations and hospitals, said shopper numbers at its US airport stores have fallen as a result of the conflict. The company reported that revenues at its airport operations in North America fell 2% year on year in the seven weeks to 6 June, following a previous decline in its UK airport operation. WH Smith now expects pre-tax profits of between £75m and £90m this year, down from previous guidance of £90m to £105m. The company also plans to shut some stores in Europe and North American resorts and will book a £150m non-cash impairment charge. Shares fell 16% in early trading on Wednesday to 413p, the lowest level since 2010.
What’s reported
WH Smith issued a profit warning due to falling shopper numbers at US airport stores linked to the Middle East war.
The retailer plans to raise about £100m by issuing approximately 26m new shares to strengthen its balance sheet, pay down debt, invest in technology, and shut unprofitable stores.
North American airport revenues fell 2% year on year in the seven weeks to 6 June; UK airport revenues were flat in the same period.
Full-year pre-tax profit guidance was lowered to £75m-£90m from £90m-£105m.
The company will book a £150m non-cash impairment charge and close some stores in Europe and North American resorts.
Shares fell 16% in early trading on Wednesday to 413p, the lowest since 2010.
WH Smith is still facing fallout from an accounting scandal at its North American arm that overstated profits by up to £50m.
The Financial Reporting Council is investigating PwC’s auditing of WH Smith’s 2024 financial statements; the Financial Conduct Authority is also investigating.
Last year, WH Smith sold its 480 high street stores to Modella Capital; those outlets are now rebranded as TGJones.
Key figures
Leo Quinn, WH Smith executive chair
Carl Cowling, former chief executive (resigned)
Richard Hunter, head of markets at Interactive Investor
Sources: The Guardian
