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WHSmith has announced a delay to its full-year results as the travel retailer contends with accounting errors that led to the resignation of its chief executive last month.
The UK group announced on Friday that its results, which were due to be published next Tuesday, would be pushed back by three days to give auditor PwC “further time to complete the required audit procedures”.
WHSmith had already moved the date once before, in October.
WHSmith, which has about 1,300 stores globally in airports, train stations and hospitals, slashed forecasts in August for its North America division, blaming the way it had recognised payments from suppliers when they ran promotions. Some of the payments were recognised too early, artificially inflating the company’s financial performance.
The revelation led WHSmith’s shares to fall 40 per cent in one day; the stock is now trading about 45 per cent lower than this time last year.
Last month, the UK’s financial watchdog said it was “engaging” with the company after an independent review of its accounts showed revenues and profits at its US business had been overstated for the past three years.
The Financial Conduct Authority often handles disclosure rule breaches through supervisory actions. However, in serious cases of misleading public announcements, it can take enforcement action, which can range from fining a company to bringing criminal charges against executives.
PwC is also facing scrutiny over its role in the errors with the UK accounting regulator weighing whether to formally investigate the firm’s auditing of WHSmith, the Financial Times previously reported.
The latest delay to WHSmith’s results comes as it searches for a new chief executive following the resignation of Carl Cowling after a report by Deloitte confirmed the accounting problems. Andrew Harrison, head of WHSmith’s UK division, is acting as interim chief executive.
The company warned investors last month that it would have to restate its earnings for 2023 and 2024. It slashed forecasts for trading profit in its US business to £5mn-£15mn for 2025, down from the £25mn it had guided in August.
Earlier this year the retailer split off its 233-year-old UK high-street stores, selling the business to Modella Capital, to focus on its more profitable travel retail division.
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