WH Smith bids to recover overpaid bonuses to bosses as accounting issues probed
Interim boss Andrew Harrison said he was ‘acutely aware that we have much to do to rebuild confidence’ in WH Smith.
WH Smith has said it plans to recover overpaid bonuses from former bosses following an accounting blunder within its US business that is being investigated by the UK’s financial watchdog.
Reporting its delayed annual results, interim boss Andrew Harrison said he was “acutely aware that we have much to do to rebuild confidence” in WH Smith.
The business was found to have overstated profits for its North American business by as much as £50 million due to issues with its audit process.
This led to its annual results being pushed back twice from when they were originally due to be released on November 12.
Carl Cowling resigned as WH Smith’s chief executive last month after a report by Deloitte confirmed the accounting problems.
On Friday, WH Smith confirmed that it was under investigation by the Financial Conduct Authority as a result of the issues.
It also said the board was applying “malus and clawback” to recover overpaid bonuses from former executive directors after profits were restated for the financial year to the end of August 2024.
This refers to processes where performance-based bonuses granted to staff members can be reduced, cancelled or repaid to firms.
The retailer told investors that it had kickstarted a remediation plan following the issues, which aims to strengthen its governance and controls, make sure processes are aligned across the group, and enact cultural change involving training and monitoring.
Its board is currently searching for a group chief executive to appoint on a permanent basis.
Mr 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.”
WH Smith is focused solely on its 1,300 shops in global travel locations – such as in airports and train stations – after selling its high street chain of about 480 shops to Hobbycraft owner Modella Capital in June.
As part of the deal, the WH Smith name is disappearing from British high streets and being replaced by brand TGJones.
The slimmed-down business reported a pre-tax profit of £108 million for the year to the end of August, excluding what it deems one-off costs.
Its trading profit in the US came in at £15 million for the year.
Group sales increased by 5% year-on-year to £1.6 billion, with growth in both the UK and the US.
WH Smith said it was commencing its biggest ever store revamp programme in 2026, which will result in short-term disruption as it shifts to a “one-stop-shop” format that brings together travel essentials, food-to-go and health and beauty.
