WH Smith has suspended dividends to shareholders as it slashed its full-year profit outlook amid the ongoing impact of the Iran war on travel. The giant retailer, who boasts 1,300 shops in global transport hubs such as airports and train stations, confirmed that profit expectations had been reduced to between £90 million and £105 million.
The company, which recorded profits of £108million in the year to last August, had originally forecast to make £100million to £115 million in 2025/26. Speaking after shares in the business fell by 9.2% following the lowered profit guidance, the group said: “In light of the uncertainty arising from the conflict in the Middle East, the group is taking a more cautious outlook reflecting the impact on passenger numbers and weaker consumer confidence. Much will depend on the peak summer trading period and the group assumes no immediate improvement in consumer confidence and assumes that jet fuel supplies can be maintained.”
In its interim results, the group revealed like-for-like UK revenues flatlined in the first seven weeks of its second half due to lower numbers of passengers flying amid the Iran war disruption.
Group wide revenues edged 2% higher in the period.
The Iran war disruption follows a torrid past year for WH Smith, which saw a costly accounting blunder in its US division, leading to painful share price declines, claiming the scalp of its former chief executive Carl Cowling and sparking a probe by the Financial Conduct Authority (FCA).
An independent review by Deloitte last year found a number of “shortcomings” in which the group overstated profits in the US business by as much as £50 million because of issues with its audit process.
Leo Quinn, the former boss of infrastructure giant Balfour Beatty, was brought in to lead the business as executive chairman on April 7.
On unveiling half-year figures, he said: “The immediate focus is to restore confidence and ensure the right foundations are in place to support profitable growth and long‑term value creation.
“Moving forward, the board and management team will have a relentless focus on driving cash, cost discipline and strengthening the balance sheet.
“As a first step, the board has taken the prudent decision to suspend the dividend.”
In the first half, WH Smith’s underlying pre-tax profits tumbled to £3 million for the six months to February 28 from £21 million a year earlier.
On a statutory basis, it slumped to a £25million interim pre-tax loss from a £1million profit a year ago.
