WH Smith's underlying pre-tax profits collapsed by 30% to £76 million in the year to August 31, the company said, as new executive chairman Leo Quinn pushes ahead with a sweeping restructuring of the troubled retailer. On a statutory basis, the group swung to a £107 million pre-tax loss from £2 million in profits in the previous year, weighed down by impairments, write-downs and restructuring costs totalling £164 million. Despite the losses, like-for-like revenues rose 2% in the period.
Quinn, who took the top job in April, blamed years of what he called "forced growth" for leaving the group with mounting costs and too many unprofitable locations. The overhaul follows a major accounting error in WH Smith's US division last year that triggered profit warnings, sent shares tumbling and prompted an investigation by the Financial Conduct Authority. The company raised £103 million through an equity raise in June to strengthen its finances and fund the turnaround effort.
The restructuring, which the company described as a "fundamental reset", cost £41 million in the past financial year. Quinn said the previous strategy had created "a complex and siloed group structure without scalable benefits" and resulted in "acquisitions not integrated effectively and high organisational complexity". The group is now overhauling its US store base and scaling back other international operations to focus on three countries: Ireland, Spain and Australia.
WH Smith previously sold its UK high street shops to private equity firm Modella Capital to concentrate on its retail locations at travel hubs in Britain and worldwide. The company has not disclosed the expected annual cost savings from the turnaround or confirmed whether jobs will be affected. For the year ahead, WH Smith said it expects underlying pre-tax profits between £75 million and £85 million in 2026-27, but added it "continues to plan cautiously given the ongoing macroeconomic uncertainty".