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WH Smith has said it plans to recover overpaid bonuses from former owners after an accounting mistake within its US business is being investigated by the UK financial watchdog.
Reporting its delayed annual results, interim boss Andrew Harrison said he was “well aware that we have a lot to do to restore confidence in WH Smith”.
It was found that the business had overstated the profits of its North American business by more than £50 million due to issues with its audit process.
This led to its annual results being pushed back twice when they were originally scheduled to be released on 12 November.
Carl Cowling resigned as chief executive of WH Smith last month following a report Deloitte Accounting problems confirmed.
On Friday WH Smith confirmed an investigation was underway financial conduct authority As a result of the issues.
It also said the board was applying “mallusion and clawback” to recover overpaid bonuses from former executive directors after restating profits for the financial year to the end of August 2024.
This refers to the processes where performance-based bonuses paid to staff members can be reduced, canceled or repaid to firms.
The retailer told investors it has launched a corrective plan following the issues, which aims to strengthen its governance and controls, ensure processes are aligned across the group, and implement cultural changes involving training and monitoring.
Its Board is currently searching for a Group Chief Executive to appoint on a permanent basis.
Mr Harrison said: “It has been a difficult end to the year for the group.
“The Board and I are keenly aware that we have much work to do to restore confidence in WH Smith and deliver strong returns as we move forward.
“We are rapidly advancing our reform plan and are committed to ensuring that we strengthen our financial controls and governance as we move forward.”
After selling its high street chain of around 480 stores, WH Smith is focusing solely on its 1,300 stores in global travel locations – such as airports and train stations. hobbycraft Owner Modella Capital in June.
As part of the deal, the WH Smith name is disappearing from British high streets and being replaced by the brand TGJones.
The behemoth business recorded a pre-tax profit of £108 million for the year to the end of August, not including one-off costs.
Its business profit in America this year was £15 million.
Group sales rose 5% year-on-year to £1.6 billion, with growth in both the UK and US.
WH Smith said it is launching its biggest-ever store revamp program in 2026, which will result in short-term disruption as it transforms into a “one-stop-shop” format that brings together travel essentials, food-to-go and health and beauty.