Overview
- WHSmith issued a trading update that revised full-year headline profit before tax to £75–90m and reported weaker momentum in the most recent seven weeks.
- The company has started a non-pre-emptive placing of about 26 million new shares, equal to roughly 20% of existing capital, to strengthen the balance sheet and target lower leverage.
- Management expects up to £150m of non-cash goodwill and store impairments driven by the North America InMotion review, a store-exit programme and other restructuring actions.
- Like-for-like group sales rose 2% over the 14 weeks to 6 June but airport sales fell and InMotion footfall weakened, a slump blamed on reduced passenger numbers and higher air fares linked to the Middle East conflict.
- Markets reacted sharply to the update with shares down about 15–16% at the open; regulators have also opened a probe into PwC’s past audits of WHSmith’s US business which adds scrutiny to the company’s turnaround.