FCA probes WH Smith over accounting error and investor disclosures

The Financial Conduct Authority is investigating WH Smith after the retailer uncovered accounting mistakes at its North America business earlier this year, focusing on whether information disclosed to investors complied with listing rules.

WH Smith belatedly announced its annual results, saying it would claw back overpaid bonuses awarded last year to some executives as part of governance changes following the accounting errors. The company said chief executive Carl Cowling had resigned after an independent review into the matter.

Investors have reacted negatively; WH Smith's shares have fallen about 40% since the disclosure.

Earlier this year WH Smith sold its 480 High Street shops to a new owner, which has rebranded the chain TG Jones. The retained business includes about 1,300 outlets in railway stations, airports and other travel sites.

For the year ended Aug. 31, pre-tax profit excluding one-off costs for the downsized business was £108 million, with forecasts downgraded after it surfaced that North America revenue overstated by as much as £50 million.

The company delayed reporting its annual results twice, initially due on Nov. 12, as it worked through the restatement and related governance issues.

Interim group chief executive Andrew Harrison said the board is acutely aware that rebuilding investor confidence and strengthening financial controls and governance are priorities as the group moves forward.

The company outlined a plan to overhaul its stores in 2026 to create one-stop shops offering travel essentials, food to go and health and beauty products as part of a broader reformatting.

Regulatory scrutiny continues as WH Smith navigates the fallout from the North America misstatement and governance changes.