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(Sharecast News) - Travel retailer WH Smith posted a rise in full-year revenues on Friday, but said profits had softened as its North American unit came under pressure.
WH Smith said group revenue rose 5% to 1.55bn in the year ended 31 August, while headline pretax profits from continuing operations slipped to 108m, down from 114m a year earlier, with UK profits increasing by 8m to 130m and North American profits decreasing by 19m to 15m. ROW profits were in line with the prior year at 14m.
The FTSE 100-listed firm, which also noted that it will exit unprofitable fashion and speciality stores in its North American Resorts division, said its weak North American performance was primarily due to a 23m reduction in supplier income and inventory write-downs.
WH Smith also confirmed that the Financial Conduct Authority has launched an investigation into the company in respect of its compliance with UK Listing Principles and Rules and the Disclosure and Transparency Rules after an independent and comprehensive review undertaken by Deloitte for FY23 to FY25 revealed profits at its North America division had been overstated by roughly 30m.
In its delayed preliminary results, WH Smith also announced that it had made the rare move to apply malus and clawback provisions in order to recover bonuses from former executive directors following the profit restatements.
Looking ahead, WH Smith said its streamlined travelfocused model left it wellpositioned for sustainable, profitable growth, and now expects to report headline group pre-tax profits of 100m-115m.
Interim chief executive 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 WH Smith 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."
Reporting by Iain Gilbert at Sharecast.com
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