WH Smith has postponed its annual financial results by more than a month due to an accounting error that overstated profits in its US operations by approximately £30 million. The retailer moved the announcement from November 12 to December 16 to allow time for an independent review by Deloitte and required audit procedures.
The accounting mistake forced WH Smith to slash its US trading profit forecast from £55 million to about £25 million. The company also cut its wider group profit forecast to around £110 million as the error involved premature recognition of supplier income.
Market Impact
WH Smith's shares plunged over a third following news of the profit overstatement. The company's stock market valuation has halved over the past year and recently fell below £1 billion for the first time in years.
The retailer explained that "the revised date will provide the company time to respond to the Deloitte review and allow the group's auditors, PricewaterhouseCoopers, to complete the required audit procedures."
Business Transformation
WH Smith has undergone a major strategic shift, selling its traditional high street chain of about 480 shops to Modella Capital in June. The company now focuses exclusively on travel retail, operating approximately 1,300 shops in airports, train stations and hospitals worldwide.
Deloitte's review is expected to conclude by the end of November, with the December results providing stakeholders time to digest the findings and their impact on the company's financial position.
Note: This article was created with Artificial Intelligence (AI).
