WH Smith (LSE:SMWH) said in September it expected full-year headline profit of about £75m, below the range it gave in April, as a £106m Capital raise and portfolio pruning reshape a Business still recovering from its North American accounting problems.

WH Smith (LSE:SMWH) has been pursuing a demanding rebuilding exercise since an accounting error in North America surfaced in August 2025. Its most recent trading statement, published on 16 September 2026, indicated that fourth-quarter group Revenue had risen 5% year on year during the peak summer period. The company said full-year profit would be in line with expectations, with headline pre-tax profit of about £75m for the year to 31 August.

That figure sits below the £90m to £105m range set out with interim results in April, and the update noted that trading margins were lower because of additional promotional activity and inflation, partly offset by cost reductions and lower interest expense.

About the company

WH Smith is a specialist retailer serving people who are travelling. Its stores sit in airports, railway stations, hospitals and motorway services, where passenger numbers are high and shoppers often buy on impulse. Over time it has shifted its emphasis towards travel locations and now treats this as its core business, with a large presence in the UK and a growing operation in North America, where it runs stores in airports and resort destinations.

Its range centres on what it calls Travel Essentials, covering books, magazines, snacks, drinks, electronics and convenience items. Revenue is earned mainly through store sales, with the group typically paying concession rents to airports and other landlords that are linked to sales. That arrangement means profit depends heavily on passenger volumes, the spending of each traveller and the terms agreed on each contract.

Strategy has focused on winning new locations, expanding the Travel Essentials format and managing the cost base. The article shows the current priority is repair work: the group reported first-half revenue of £748m and headline pre-tax profit of £3m, guided to about £75m of full-year headline profit, and is using the capital raise and portfolio pruning to rebuild confidence and strengthen the balance sheet.

Balance sheet support

The most significant event of the year was the capital raise in June. WH Smith (LSE:SMWH) issued 25.8 million new shares at 410p, about 20% of its existing share capital, raising approximately £106m gross and £102m net. Directors and management subscribed for 514,631 of those shares.

The September update pointed to net Debt of about £325m at the year end, with Leverage of roughly 2.0 times. That compares with headline net debt of £496m and leverage of 2.9 times at the end of February, when the interim results also confirmed that the Dividend had been suspended to reduce debt and strengthen the balance sheet. The company has said it will seek to restore Shareholder returns once excess cash is available.

Executive chair Leo Quinn said in April that the immediate focus was to restore confidence, with an emphasis on cash, cost control and Balance Sheet strength. Further director share dealings were disclosed on 29 June and 10 August, following the fundraising.

Why travel retail is a distinct model

Travel retail differs from the high street in several ways. Landlords such as airport operators award contracts through tenders, and the retailer's task is to win them and to trade them profitably over many years. Footfall is controlled by passenger numbers rather than by marketing, and trading hours are long, which supports sales but also raises staffing costs.

Because rents are often tied to turnover, retailers are partly protected when traffic slows, but fixed costs and stock still need managing. Consumer confidence and travel disruption, including geopolitical events, therefore have a direct effect on results.

What could shape the next phase

The coming year is likely to test the recovery plan on several fronts. Net debt and leverage will be measured against the levels reported in September, and any resumption of dividends will depend on the cash generated once debt reduction goals are met.

In North America, the pace at which weaker formats are closed or reshaped, and the progress of Travel Essentials, will influence how quickly profitability can be rebuilt. The outcome of the regulatory investigation is another Factor outside management's control. Together, these items will indicate whether the business is stabilising on a sustainable footing.

North America and the wider estate

The first half illustrated the scale of the challenge. Group revenue rose 5% to £748m, yet headline pre-tax profit fell to £3m from £21m and headline trading profit dropped to £32m from £47m. In North America, total revenue increased by 10% at constant currency, with Travel Essentials up 22%, but headline trading profit fell to £2m from a restated £5m. Resorts like-for-like revenue dropped 6% and InMotion like-for-like revenue declined 4%.

The group has been reducing its exposure to weaker formats. A number of fashion stores in its Las Vegas Resorts business have been closed, with further closures planned, and the InMotion estate is expected to shrink by about 20% to 30%. The September statement referred to portfolio rationalisation alongside cost and cash management, Working Capital and Investment in Travel Essentials, the format the company regards as its main growth driver.

The company also noted in April that the Middle East conflict was affecting passenger numbers and consumer confidence, a reminder that a travel-focused retailer remains exposed to external shocks. The Financial Conduct Authority opened an investigation following the accounting issues, and that process forms part of the backdrop for the business.

Full-year results will be the first opportunity to examine the finished numbers after the capital raise, and to see what the board says about Margin recovery in 2027. Investors are also likely to look for further information on the timing of any return to dividend payments, and on the rate at which North American profitability can be rebuilt.