WHSmith, which sold off its UK high street arm earlier this year to focus on its travel operations, has revealed a financial review found an overstatement of £30m in headline profit in its North American division.
This means WHSmith now expects headline trading profit for the division to land at £25m for the financial year ending August 31, 2025, lower than market expectations of £55m.
That leaves overall profit before tax and non-underlying items for the group likely to land “in the region of £110m” for the trading period.
It said in a statement that the reason for the downgrade was “largely due to the accelerated recognition of supplier income”. WHSmith intends to provide a further update at its preliminary results announcement in November.
The board has instructed Deloitte to undertake an independent review.
In its 2024 financial year, before the sale of the UK high street business, WHSmith posted a profit before tax and non-underlying items of £166m.
WHSmith announced last week that it had completed the sale of greeting card business funkypigeon.com to Card Factory. The transaction was worth £24m.
“Following the disposal, this now completes the move to becoming a pure play global travel retailer,” WHSmith said in a statement.
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