19 December 2025                                                                                                                            

 

WH SMITH PLC

 

The global travel retailer

PRELIMINARY RESULTS ANNOUNCEMENT

FOR THE YEAR ENDED 31 AUGUST 2025

 

Group completes strategic shift into pure-play travel retail  

Clear strategic priorities to drive sustainable profitable growth

 

·    Completion of the Group's transformation into a pure-play travel retailer following the sale of the High Street business and funkypigeon.com

·    Total Group revenue up 5% to £1,553m (2024¹: £1,473m)

o  UK up 5%; North America (NA) up 7%*; Rest of the World and Other ('ROW') up 12%*

·    Headline Group profit before tax and non-underlying items² £108m (2024¹: £114m)

o  Headline Group trading profit² of £159m (2024¹: £170m)

·    Headline diluted EPS before non-underlying items² 43.4p

·    Proposed final dividend of 6.0p per share, resulting in full year dividend of 17.3p per share, maintaining our dividend policy of 2.5x cover, reset to our continuing business earnings

·    Clear priorities established by division and a more focused strategy to deliver profitable growth and enhanced return on capital:

o  expand and strengthen category leadership in UK Travel essentials, scale health and beauty and food-to-go offer;

o  enhanced focus on NA Travel Essentials business. Plan to exit North America fashion and speciality stores and to review the breadth of InMotion NA portfolio; and

o  strengthen core ROW markets, new growth driven through franchise model, review and exit non-core markets.

·    Following the findings of the Deloitte Review announced on 19 November 2025, a comprehensive remediation plan is in place and progressing at pace

·    The Financial Conduct Authority ('FCA') has commenced an investigation into the Company

·    The Group expects to deliver FY26 Headline Group profit before tax and non-underlying items² of £100m - £115m.

 

Andrew Harrison, Interim Group Chief Executive, commented:

"It has been a difficult end to the year for the Group. The Board and I are acutely aware that we have much to do to rebuild confidence in WHSmith and deliver stronger returns as we move forward. We are acting at pace progressing our remediation plan and are committed to ensuring that we strengthen our financial controls and governance as we move forward.

"Following the sale of our UK High Street business and Funky Pigeon during the year, we are now a pure-play global travel retailer. Travel retail is a high growth market, and we have attractive market positions in the UK, North America and our international markets from which we are well-positioned to grow.

"I would like to thank our colleagues who have shown the utmost commitment and professionalism during an uncertain and busy period for the business.

"As Interim CEO, my focus is to provide stability and to lead the Group with transparency and discipline. WHSmith is a business with an exciting future and I look forward to executing against our clear priorities to ensure we capitalise on the attractive opportunities ahead."

* On a constant currency basis

¹ Comparative periods have been restated to correct the accelerated supplier income recognition and inventory-related items in the North America division (refer to Note 1b for further details) and to separately disclose results from discontinued operations (refer to Note 7 for further details)

² Alternative Performance Measure (APM) defined and explained in the Glossary on page 56. All numbers presented are from continuing operations unless otherwise stated

 

Group financial summary - continuing operations

£m unless indicated otherwise Trading profit2	IFRS 16		Headline pre-IFRS 163
	Aug 2025	Aug 2024 Restated1	Aug 2025	Aug 2024 Restated1
UK	131	126	130	122
North America	22	38	15	34
Rest of the World and Other ('ROW')	20	18	14	14
Group trading profit2	173	182	159	170
Group profit before tax and non-underlying items2	102	106	108	114
Diluted earnings per share before non-underlying items2	39.5p	55.7p	43.4p	60.3p
Non-underlying items (including finance costs)2	(100)	(41)	(92)	(41)
Group profit before tax	2	65	16	73
Basic (loss)/earnings per share	(24.4)p	28.7p	(14.2)p	33.3p
Diluted (loss)/earnings per share	(24.4)p	28.2p	(14.2)p	32.8p

 

Revenue performance - continuing operations

 

£m	Total Revenue Full Year 2025	Total Revenue Full Year 2024 Restated1	Total Revenue % change	Constant currency Full Year 2025 % change4	LFL Full Year 2025 % change	LFL 13 weeks to 31 August 2025 % change	LFL 15 weeks to 14 December 2025 % change
UK	834	795	5%	5%	5%	3%	2%
North America	413	401	3%	7%	2%	1%	1%
Rest of the World and Other	306	277	10%	12%	7%	6%	6%
Group	1,553	1,473	5%	7%	5%	3%	3%

 

Current trading, outlook and planning assumptions

In the 13 weeks to 31 August 2025, the Group delivered like-for-like ('LFL') revenue² growth of 3%. By division, the UK delivered LFL revenue growth of 3% reflecting softer passenger numbers through the summer period and a reduced level of spend per passenger growth. In North America, we delivered LFL revenue growth of 1%. Our core Travel Essentials business continued to perform well with revenue growth of 8% with InMotion down 7% and Resorts down 6%. Rest of the World delivered LFL revenue growth of 6%.

³ The Group adopted IFRS 16 'Leases' with effect from 1 September 2019. The Group continues to monitor performance and allocate resources based on pre-IFRS 16 information (applying the principles of IAS 17), and therefore the results for the years ended 31 August 2025 and 31 August 2024 have been presented on both an IFRS 16 and a pre-IFRS 16 basis.

Measures described as 'Headline' are presented pre-IFRS 16.

For the purposes of narrative commentary on the Group's performance and financial position, both pre-IFRS 16 and IFRS 16 measures are provided. Reconciliations from pre-IFRS 16 measures to IFRS 16 measures are provided in the Glossary on page 56. Group revenue was not affected by the adoption of IFRS 16, and therefore all references to and discussion of revenue are based on statutory measures.

⁴ Constant currency

 

 

These sales trends have continued into the first 15 weeks of the current financial year.

In the first 15 weeks of FY26, the Group delivered LFL growth of 3%, with the UK softening slightly to 2%, largely reflecting a softening in rail. North America revenue trends were in line with the last 13 weeks of FY25 with LFL growth of 1%, and Rest of the World has continued to perform well, with growth of 6%.

For the full year ending 31 August 2026, the Group expects total revenue growth of c.4-6%.

 

In the UK, total revenue growth is expected to be c.3-5%, in North America c.6-8%, and in the Rest of the World division c.4-6%.

 

Headline trading profit margin² in the UK is expected to be c.14-15%, North America c.7-8%, and c.5% in the Rest of the World. This reflects the different dynamics in each market: a year of investment in the UK, a focus on rebuilding profitability in North America and strengthening our foundations internationally.

 

FY26 technical planning assumptions for the Group can be found on page 12.

ENQUIRIES:

 

WH Smith PLC
Nicola Hillman	Media Relations	01793 563354
Mark Boyle	Investor Relations	07879 897687
Brunswick
Tim Danaher		020 7404 5959

WH Smith PLC's Preliminary Results 2025 are available at whsmithplc.co.uk.

 

GROUP OVERVIEW

This has been a year of strategic progress and challenge. The Group has completed a significant strategic shift by completing the sale of our High Street business and online business, funkypigeon.com, fully aligning with our strategic focus to operate as a pure-play travel retailer.

 

This transformation strengthens our platform for growth enabling us to capitalise on the significant potential of the global travel sector. We have a clear leadership position in Travel Essentials. Our stores are located in attractive, high footfall locations across the globe, and we have a dedicated team of passionate and customer-focused colleagues.

 

Following the Group's strategic reset to a pure-play travel retailer, we have reviewed the broader Travel portfolio with a sharp focus on profitable growth and return on capital.

 

In the UK, we are focused on retaining category leadership in Travel Essentials through our one-stop-shop format. We will continue to expand our presence in the category by targeting new and better quality space growth, and we are actively scaling our health and beauty and food-to-go categories.

 

In North America, we will focus on improving and investing in our core Travel Essentials business. Following a review of our Resorts business, we are in the process of exiting a number of unprofitable fashion and speciality stores. We are also undertaking a review of our North America InMotion business and the breadth of the portfolio. Across the business, we have put in place a more rigorous approach to any future store openings with new InMotion stores only being considered as part of a strategically important tender package.

 

In our ROW division, we will focus our investment in our core, strategically important markets, including Australia, Ireland and Spain, resulting in reducing our presence in or exiting sub-scale markets and using a less capital-intensive franchise model for future openings.

In August 2025, the Board instructed Deloitte to undertake an independent and comprehensive review of the North America division following the identified accelerated recognition of supplier income in this division. The Deloitte Review identified that the accounting treatment for supplier income adopted by the North America division was not consistent with the Group's stated accounting policy and consequently was not consistent with the requirements of the relevant accounting standards. This issue had arisen against a backdrop of a target-driven performance culture and decentralised divisional structure combined with a limited level of Group oversight of the finance processes in North America. Supplier income has therefore been overstated in the North America division and this has resulted in prior year restatements. In light of the findings, the Board instructed the Group Finance team to review other balances in the division and identified further restatements, which are described in more detail on page 9.

 

The Internal Audit review, conducted by the Group alongside the Deloitte review, concluded that the supplier income for the full year ended 31 August 2025 across the UK and Rest of the World travel divisions was appropriate, resulting in supplier income being appropriately recognised in these divisions.

The Board has acted quickly to put in place a clear remediation plan. This plan is structured around three key business objectives: to strengthen governance and controls to protect value and restore trust; to embed aligned processes and ways of working across the Group supported by new systems; and to sustain this through cultural change, enhanced training and monitoring.

The Board is applying malus and clawback to recover overpaid bonuses from former executive directors following the restatement of profits in the financial years ended 31 August 2023 and 31 August 2024.

The Group can confirm that the FCA has commenced an investigation into the Company in respect of its compliance with UK Listing Principles and Rules and the Disclosure and Transparency Rules in relation to the matters announced by the Company on 19 November 2025.

The Group is committed to cooperating fully with any engagement in relation to the North America accounting issue from any regulatory body or other authority.

In the near-term, the Board continues with its search for a Group CEO and two Non-Executive Directors to strengthen the Board with one area of focus being North America retail experience.

Group revenue - continuing operations

	Year to 31 August 2025
	Total vs 2024	Total constant currency4 vs 2024	LFL2 vs 2024
UK	5%	5%	5%
North America	3%	7%	2%
Rest of the World and Other	10%	12%	7%
Group	5%	7%	5%

Total Group revenue at £1,553m (2024¹: £1,473m) was up 5% compared to the prior year.

The Group delivered a good performance with total revenue up 7%⁴ and up 5% on a LFL² basis. This was driven by a good performance from the UK division, up 5% on a total basis, North America up 7%⁴, and ROW up 12%⁴. On a LFL basis, the UK was up 5%, North America was up 2%, and ROW up 7%.

Group profit

The Group delivered a Headline trading profit² in the year of £159m (2024¹: £170m). The UK increased by £8m to £130m; North America decreased by £19m to £15m; and ROW was in line with the prior year at £14m.

Headline Group profit before tax and non-underlying items² was down 5% to £108m (2024¹: £114m). Group profit before tax, including non-underlying items and on an IFRS 16 basis, was £2m (2024¹: £65m) in the year.

Discontinued operations

During the year, the Group disposed of the High Street business and funkypigeon.com. These disposals are classified as discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

Group balance sheet

The Group has a strong balance sheet, has cash generative trading operations and has substantial liquidity. The Group has the following cash and committed facilities as at 31 August 2025:

£m	31 August 2025	Maturity
Cash and cash equivalents5	71
Revolving Credit Facility6	400	June 2030
Convertible bonds	327	May 2026
US Private Placement notes	200	2032-2037
Term loan	120	March 2028

The Group has a 5-year revolving credit facility ('RCF') with a maturity date of 30 June 2030 and a £327m convertible bond with a maturity of 7 May 2026 which has a fixed coupon of 1.625%.

As at 31 August 2025, Headline net debt² was £390m (2024: £371m) and the Group has access to c.£650m of liquidity. Leverage² at the 31 August 2025 was 2.1x Headline EBITDA² (2024¹: 1.9x). Net debt including IFRS 16 lease liabilities at 31 August 2025 was £874m (2024: £997m).

Refinancing

On 25 March 2025, the Group announced the successful completion of a £200m issue of US Private Placement (USPP) notes and a bank term loan of £120m, neither of which have been drawn down as at 31 August 2025.

The USPP notes, which represent the Group's debut issue in the USPP market, have a maturity of 7, 10 and 12 years and have been issued on investment grade terms. At the same time, the Group has agreed a £120m three-year bank term loan with two uncommitted extension options of one year each, which would, subject to lender approval, extend the tenor of the new bank loan to 4 and 5 years, if exercised.

The Group has a £400m committed revolving credit facility ('RCF'). The last extension option was exercised during the year, taking the maturity to 13 June 2030. The Group has drawn down £141m at 31 August 2025.

In November 2025, the Group entered into a £200m syndicated 12-month term loan. The loan has two extension options, which would, if exercised, extend the maturity date to 31 August 2027. The facility is provided by a syndicate of banks: BNP Paribas, J.P. Morgan Securities PLC, London Branch, PNC Capital Markets LLC and Skandinaviska Enskilda Banken AB (PUBL). This additional loan provides further financing security for the Group as a Backstop facility which will remain in place until the USPP completes and the Convertible Bond is repaid.

This refinancing will diversify the Group's sources of debt financing and extends the Group's debt maturity profile in advance of the convertible bond maturing on 7 May 2026. The income statement cost of the convertible bond is currently c.4.6% including the non-cash debt accretion charge. The income statement cost of the replacement financing will be c.6.3%.

Group cash flow

The Group generated a Headline EBITDA² of £187m in the year (2024¹: £198m). Capex was £81m (2024¹: £105m⁷).  We had a working capital inflow⁸ of £4m in the year (2024¹: outflow⁸ of £22m). This mainly relates to a one-off payables timing benefit linked to one of our large franchise partners, broadly offsetting an inventory increase relating to new store openings. This year, we expect an outflow mainly relating to the unwinding of this timing benefit and opening new stores.

⁵ Cash and cash equivalents comprises cash on deposit of £49m and cash in transit of £22m

⁶ Draw down of £141m as at 31 August 2025

⁷ Excluding capex related to non-underlying items of £nil (2024: £1m)

⁸ Pre-IFRS 16

In total, there was a free cash inflow² in the year of £63m (2024¹: £35m). This year, we expect, subject to investment opportunities, headline net debt² to be in the region of £400m at the end of the year. The increase in net debt relates to the timing of investment in refurbishment of UK stores and disciplined investment in new stores in North America alongside ongoing transformation costs.

Capital allocation

We remain focused on maintaining an efficient balance sheet and on a disciplined approach to capital allocation. In the near-term, we aim to:

·    strengthen the balance sheet through tighter cash control and improved cash generation, diversify our debt structure, extend our maturity profile and reduce our leverage² position to below 2.0x;

·    invest to grow and protect value. We will do this by investing in business development and new space growth with a clear focus on attractive returns. Furthermore, we will protect our business assets through maintenance and transformation projects. We expect capex of c.£90m in the current financial year;

·    deliver shareholder returns through our dividend policy of 2.5x cover, reset to our continuing business earnings, and when we have surplus capital, we will look to return further cash to shareholders.

The Board has today proposed a final dividend of 6.0 pence per share in respect of the financial year ended 31 August 2025, making it a full year dividend of 17.3 pence per share. This is in line with our stated dividend policy of 2.5x cover and reflects the continuing earnings profile of the Group following the sale of the non-travel businesses. Subject to shareholder approval, the dividend will be paid on 12 February 2026 to shareholders registered at the close of business on 23 January 2026. This is in line with our existing policy and has been rebased to match the continuing earnings of the Group.

During the year, the Group completed a £50m share buyback announced on 11 September 2024.

 

CONTINUING OPERATIONS

Total revenue for the Group was £1,553m (2024¹: £1,473m), up 5% compared to the previous year, generating a Headline trading profit² in the year of £159m (2024¹: £170m).

£m	Trading profit2 (IFRS 16)		Headline trading profit2 (pre-IFRS 16)		Revenue
	2025	2024	2025	2024	2025	2024
		Restated1		Restated1		Restated1
UK	131	126	130	122	834	795
North America	22	38	15	34	413	401
Rest of the World and Other	20	18	14	14	306	277
Total	173	182	159	170	1,553	1,473

 

UK

In the UK, our largest division, we have delivered another year of good growth.

Total revenue in the year was £834m (2024: £795m) which, together with improved margins, resulted in a Headline trading profit² of £130m (2024: £122m). These results underline the strength of our model and the resilience of our growth strategy.

Our strategy remains clear. To develop ranges and formats that are relevant to the customer at each stage of their journey enabling them to make best use of their time and put more products into their baskets to grow spend per passenger.

In food-to-go, our Smiths Family Kitchen offer has gone from strength to strength with award-winning products, an expanded meal deal proposition and an enhanced hot food and coffee range that is resonating strongly with customers. 

In health and beauty, we have delivered strong growth, up 20% year-on-year, as we scale this category across our estate.

These extended ranges have enabled us to continue to innovate through format development, ensuring our one-stop-shop proposition is credible to customers and landlords and we can enhance our space through this format.

During the year, we have continued to optimise the estate and review our operating model, realising substantial cost efficiencies in the face of sustained inflationary cost pressures. We will continue with this discipline to manage continuing cost pressures.

Air passenger numbers remain a key growth driver and they are forecast to grow in the long term.

We are investing in our UK store portfolio while also identifying new and better quality space opportunities across each of our channels. During the year, we have opened 17 new stores, including 4 at airports, 10 in Hospitals and 3 motorway service area franchises. We closed 18 small and less well located stores in the year. This year, we expect to open c.20 new stores in the UK and close c.15 stores in line with our strategy to improve the quality of our space.

Revenue growth by key channels

	Revenue (% change) Year to 31 August 2025
	Total vs 2024	LFL2 vs 2024
Air	6%	7%
Hospitals	7%	4%
Rail	4%	4%
Total UK	5%	5%

Air

Air has delivered another good performance in the year. Total revenue in Air was up 6%, supported by spend per passenger growth of 4% on the prior year in Travel Essentials. In addition, we have delivered strong ATV growth, driven by category development in health and beauty and food-to-go.

Today, WHSmith is the leading travel essentials operator across UK airports.

In the last 18 months, we have secured agreements with key airports to enhance our space, including at London Heathrow, Manchester and London Stansted.

Looking ahead, 2026 will be a year of investment. We will execute our largest-ever store development programme, rolling out our one-stop-shop strategy across six more UK airport terminals, including at London Heathrow, laying the foundations for future growth and long-term success. With this, brings short-term disruption as we reformat our existing stores.

These new formats will deliver greater convenience for customers and they will be central to our future growth. We are clear that this model works following the success of our store opening at Birmingham Airport in 2023. This is a good example of our strategy in action.

Following its refit to the one-stop-shop format in 2023, our Birmingham store is our best-performing store in our UK Air estate. With everything under one roof, a full health and beauty offer and an in-store pharmacy, it is driving ATV growth of c.20% and sales per square foot up over 30%. This success gives us confidence as we scale the format further.

At London Heathrow Airport, we will extend our presence with flagship one-stop-shop formats across Terminals 3, 4 and 5, demonstrating our leadership in UK Travel essentials. These stores will see us further enhance our proposition following data-led customer insights to set a new global standard for travel essentials in UK airports. The stores will also bring together everything passengers need under one roof, delivering convenience and driving strong commercial returns.

We will become the leading airside health and beauty operator across these terminals with full category ranges and instore pharmacies and we will have significantly enhanced our design and proposition.

 

Hospitals

 

Hospitals is our second largest channel by revenue in the UK and it delivered another strong performance in the year, with total revenue up 7%. This growth reflects the strength of our multi-format approach and our strong partnerships.

This growth reflects the strength of our multi-format approach and the partnerships that we have built.

We opened 10 new stores and have continued to grow with our partners M&S and Costa Coffee.

At the same time, we've developed our own Smith's Family Kitchen café proposition, which gives us a great opportunity for further growth across UK Hospitals.

Our offer for NHS landlords is now truly multi-format and this flexibility allows us to meet diverse customer needs and maximise returns for NHS Trusts.

Looking ahead, Hospitals remain a significant growth opportunity for WHSmith. We have a strong pipeline of new stores to open in FY26 and we see further potential to expand our footprint and deepen our partnerships across the hospital estate.

Rail

Rail is also an attractive channel. During the year, we delivered another good performance with total revenue up 4% on the prior year.

We have made good progress with our one-stop-shop strategy, opening flagship stores at King's Cross and Charing Cross stations in London. These formats bring together travel essentials, food-to-go, and health and beauty under one roof, creating a seamless experience for passengers and driving higher spend per visit. Looking ahead, we see further opportunity to expand this model across the rail estate.

Our latest store opening at London Bridge station showcases the future of this format in Rail, combining our Smith's Family Kitchen coffee and breakfast offer with food-to-go, health and beauty and a travel essentials offer. We have also introduced an extended range of on-the-go food and beverage products as we continue to evolve our retail mix to maximise customer convenience and value for our landlords.

UK outlook

We continue to benefit from structural tailwinds, including passenger growth, and we see ongoing opportunities in Air and Hospitals and across our multi-format stores and brand partnerships. Despite this, there are also headwinds, including a challenging consumer outlook, sustained inflationary pressure of 4-5% across most major cost lines, and regulatory changes affecting some of our core categories.

Category development and innovation remain central to our strategy, driving spend per passenger and reinforcing our leadership in Travel Essentials, as does a continued focus on costs and margin.

The year ahead will be a year of investment as we execute our largest-ever store development programme and accelerate the rollout of our one-stop-shop strategy. This is a transformational step that will strengthen our estate and position us for long-term growth.

While this investment will create trading disruption in the short term, and we expect some margin dilution as a result of this disruption, as well as cost inflation, our focus remains on disciplined capital spend and cost optimisation.

These actions will ensure we deliver profitable growth and build the foundations for future accelerated returns.

NORTH AMERICA

Despite the challenges of recent months, North America remains an attractive market and investment opportunity. This is the largest travel retail market in the world with significant investment and long-term structural growth trends. We see plenty of opportunity to capitalise on the substantial growth opportunities given our small market share.

During the year, revenue in North America increased by 7%⁴, on a constant currency basis, with total revenue up 3% to £413m (2024: £401m). Further to the investigation undertaken by Deloitte, Headline trading profit² was £15m (2024¹: £34m).

The revision from the previous market expectation of £55m includes a net reduction in supplier income of £23m, broadly in line with the value previously announced. This comprises a gross reduction of £33m of which £20m is deferred to future financial years and £13m has not been delivered due to delays in signing supplier income contracts and the under delivery of the commercial plan. Supplier income costs of £3m have also been incurred. This is offset by a £13m supplier income restatement benefit from prior years.

Expected cost savings of c.£5m were not delivered in FY25, largely relating to the delayed restructure of the North America logistics and distribution network. The direct benefits are no longer expected to be delivered at this scale, however indirect benefits from the network review are expected over the medium term.

The adjusted Headline trading profit² margin for FY25 before additional one-off inventory related costs of £12m is 6.5%.

The net cost of the inventory items in FY25 is £12m. This comprises a gross increase in costs of £23m with £11m restated to prior years. The net inventory items for FY25 primarily consists of an increase in the stock obsolescence provision of c.£5m and an increase in the stock loss position for the year of c.£5m.

The increase in the stock obsolescence provision is driven by the ageing profile of stock and a marginally worsened stock turn in FY25. The Group has also revised its provision methodology with a more granular approach across product categories. There is a clear set of activities focused on narrowing product ranges and exiting aged stock in the year ahead.

The FY25 shrinkage charge comprises known stock losses realised through stock counts and a shrinkage provision reflecting expected losses since the count to year-end. As part of the remediation plan, there is a focus on enhancing controls and stock management processes across the North America business in FY26.

In terms of restatements of the prior years, supplier income adjustments on a net basis for the prior years are £13m for FY24 and £5m for FY23. Approximately £5m of supplier income from these prior years will be recognised in FY26 and beyond.

Some of the inventory adjustments also relate to prior years, on a net basis, £7m recorded in FY24 and £4m in FY23.

As a result, the restated Headline trading profit² margins for the prior years are: 8.5% for FY24 and 10.5% for FY23.

In addition, over recent months, we have also reviewed the nature of one-off items included in the income statement to ensure we have a clear understanding of the normalised trading profit margin in North America. We identified a small number of one-off items, the most notable of which related to Covid-19 rent relief benefits and Covid-19 insurance claims received. After removing the net benefits, the normalised North America Headline trading profit² margin for the prior years of FY24 and FY23 is around 8%. 

Travel Essentials

Our Travel Essentials business has consistently delivered a strong performance, growing 19% on a constant currency basis in FY25, underpinned by customer demand and attractive double-digit margins.

In 2022, Travel Essentials represented 37% of the overall North America business. Over the past three years, we have invested and grown this business and it now represents 55% of total North America revenue. The Travel Essentials segment is our most profitable and, on a fully allocated basis, generates around a 10% Headline trading profit² margin. As we scale our business and enhance our operations, we expect to grow margins further, which will support the overall profitability of our North America division.

Given our priority to deliver strong returns, we expect the proportion of Travel Essentials to increase to over 70% in the medium term.

We have a strong pipeline of new stores which we have reviewed in light of the normalised margin levels and we are confident that, in aggregate, they meet our investment hurdle rates. We have also started the process of reviewing all of our individual formats within the store pipeline.

InMotion

InMotion remains highly regarded by landlords as part of tender packages where it adds value to the overall retail offer in airports and its strong reputation gives us a competitive advantage in securing attractive space within key airports. Our InMotion estate is profitable, however it is in like for like decline and the portfolio is large with 123 stores. During the year, InMotion LFL revenue declined by 3% year on year.

As we move forward, our approach to operating InMotion will be highly focused. We will limit new store openings with new stores being considered only as part of strategically important tender packages. Where appropriate, we will also move the InMotion proposition into the large marketplace stores, where we offer customers the convenience of everything under one roof, providing flexibility on space use over time.

In parallel, we will undertake a review of the existing store portfolio. It is imperative that we improve the profitability and revenue performance of this business. As a result, our focus will include undertaking a deeper diagnostic of the estate to determine the factors that need to be in place for these stores to succeed. We expect to complete this in the first half of 2026 and we will then be in a position to reshape the portfolio to improve profitability and allow us to better target where we can open new stores that payback with strong returns. We will also focus on our commercial proposition reducing the number of product lines, improving availability and reducing working capital.

Over time, we expect the number of InMotion stores to decline as we focus on our Travel Essentials business and integrating more tech accessories into these stores, as well as the impact of landlord redevelopment. In the years ahead, we would expect the InMotion estate to contract by around 20-30% with store numbers reducing below 100 in the medium term.

Despite store closures, we see an opportunity to increase the margin with our strongest margin stores retained, range optimisation and strengthened operational performance.

Air store profiles

Our strategy to grow in US airports is delivering good results. Over recent years, we have secured a mix of standalone stores and multi-store packages, combining our profitable Travel Essentials offer with complementary stores such as InMotion.

In Kansas City, we opened an 8 store package in February 2023, including 6 Travel Essentials stores, a larger-format City Market and a localised 'Made in KC' concept store. This tailored approach across the airport meets travellers needs and drives performance with like-for-like growth of around 6% in these stores, a payback period of c.3 years and a long-term contract.

In Washington, we opened an Eastern Market store in May 2025 and this is a good example of where we have introduced a marketplace format offering the convenience of everything under one roof -similar to our one-stop-shop strategy in the UK. Within this standalone store, we have the flexibility to realign our category mix over the term of the lease to ensure we stay ahead of changing trends. We expect a current payback period here of less than three years and we have a long-term contract in place.

In Palm Springs, we have secured exclusive rights to all the retail locations in the airport. This was a significant strategic win and includes a 5-store package: 3 Travel Essentials stores, an InMotion and a coffee shop. This localised offer is performing very well, with like-for-like growth of around 9% and a current payback period of c.2 years. Again, with a long-term contract in place.

We have a clear ability to win prime locations, adapt our formats and leverage our brands, and we are able to drive good growth with attractive returns.

Resorts

We have completed a review of our Resorts business in Las Vegas to evaluate the current store portfolio based on the performance and market dynamics of each format.

There are four primary store formats that make up our Resorts business: hotel convenience and gift stores; 'Welcome to Las Vegas' stores; fashion stores; and speciality stores.

Our hotel convenience and gift stores, of which we operate c.20, sell consumables and souvenirs. Our 'Welcome to Las Vegas' stores primarily sell souvenirs with some consumables and we operate c.20 of these. We see a good contribution from our hotel convenience and 'Welcome to Las Vegas' stores. Despite a decline in LFL revenue in the last year, we continue to benefit from attractive margins and these stores contribute cash.

Our fashion stores deliver c.25% of Resort revenue and, on a comparable basis, have declined c.10% year on year. At an aggregated level, these stores are unprofitable and do not generate cash.

Our speciality stores sell categories such as confectionery and represent c.10% of Resort revenue. LFL revenue also declined around 7% in the year and these stores are marginally unprofitable.

Following our review, we are exiting a number of Resort fashion and speciality stores, where the leases are short, and we are reviewing further format and other controlled exit route options where the arrangements run over the medium term. While this will take some time, we have initiated the work and the margin and cash benefits, along with growth benefits, already support our FY26 plans.

Revenue growth by key channels

	Revenue (% change) Year to 31 August 2025
	Total vs 2024	Total at constant currency4 vs 2024	LFL2 vs 2024
Air	5%	9%	4%
Resorts	(7)%	(3)%	(4)%
Total North America	3%	7%	2%

 

During the year, we opened 35 new stores and closed 14 stores, consistent with our strategy of improving the quality of our store estate.

We have a new store pipeline of c.70 stores with around 35-40 due to open over the next year and, currently, we anticipate closing c.30 stores in FY26 as we continue to improve the quality of our store portfolio.

Including the 35 store openings in the year, we now have 274 stores in Air (including 123 InMotion stores), and 88 stores in Resorts and Rail.

Rebuilding profitability in North America

Given this division has grown significantly over the past few years, it has become complex with significant store, supplier and product range expansion. It is therefore necessary that we focus on refining the operating model with core business process improvements.

It is clear that this will be a multi-year piece of work and our focus areas for the next 12 months will be on our people structure and talent and investment in our end-to-end supply chain to improve the current processes and ways of working, both centrally and in stores. This will be combined with the roll out of two new regional distribution centres; one operated by GXO in New Jersey and a second in Las Vegas, operated directly as an extension of how we operate today. We will utilise these distribution centres to transform our distribution and transportation capabilities and stay ahead of the store growth. We also expect operational savings to deliver a benefit in the years ahead.

In the year ahead, we are expecting total revenue growth in the region of 6-8%, driven largely by space. In terms of profitability, we expect to grow Headline trading profit² margin from 4% in FY25 to around 7-8% in FY26. This includes trading profit contribution in the region of £5m, the rebuild of profit excluding the one-off inventory related costs of around £12m, supplier income deferral gains of around £5m year on year, offset by operating model changes and remediation investment of around £2m.

Looking ahead, we will focus on five key actions that will strengthen our business and deliver future margin gains:

·    increasing the mix of Travel Essentials;

·    deploying capital with discipline - investing where we see the highest returns and avoiding unnecessary expansion. Every decision will be guided by rigorous financial criteria;

·    strengthening our operating model to improve efficiency;

·    rationalising low-margin stores to sharpen our focus on profitable locations; and

·    exiting loss-making stores to ensure our portfolio is positioned for long-term success.

REST OF THE WORLD AND OTHER

It has been a strong year for revenue growth. Revenue was up 12%⁴, largely driven by new store openings. Headline trading profit² was broadly flat year on year with operating investment in the new store openings and gross margin headwinds driven by location mix.

We remain focused on growing and building scale in our core, strategically important markets, particularly in Australia, Ireland and Spain where we have established strong brand recognition and proven commercial success.

We will focus on further investment where we already have scale and expertise, ensuring that we deepen our presence and strengthen profitability in the markets we know best. In prime locations, we will also look to grow our key categories, such as health and beauty and further develop our one-stop-shop format.

In addition, we will continue to actively manage our store portfolio which will result in exiting sub-scale markets as contracts expire or through active portfolio management.

The outcome of this is clear: we plan to improve headline trading profit margins over the medium term and deliver stronger returns.

As part of this disciplined approach, in the near term, new directly-run stores will be opened only within our existing core markets allowing us to leverage operational synergies, local market knowledge, and established infrastructure.

As we look at our next phase of growth, we are sharpening our focus on a franchise-led model, an area in which we already have considerable experience. By working in partnership with experienced local operators, we can leverage their local expertise alongside our space and promotional management to optimise performance. This shift will take time, but it offers several clear advantages and will therefore drive stronger returns. It also provides the ability to grow while reducing operational complexity.

We now have 325 stores open. Of the 325 stores open, 59% are directly-run, 9% are joint venture and 32% are franchise. During the current financial year, we expect to open c.5 stores and close c.20 stores.

CultPens.com delivered a good performance in the year, in line with our expectations.

Technical planning assumptions FY26 (Pre IFRS 16 basis)

Central costs	£30-£32m
Interest charges	£33-£35m
Effective tax rate	c.25% of Group revenue
Working capital	Working capital growth broadly in line with revenue growth, plus c.£10m outflow relating to one-off payables timing
Non-underlying	c.£20m-£30m
Capex	c.£90m
Headline net debt	c.£400m

 

 

Total stores

	Year ended 31 August 2025
No. of stores	UK	North America	ROW	Total
At 1 September 2024	594	341	356	1,291
Opened	17	35	27	79
Closed	(18)	(14)	(18)	(50)
Net (closures)/openings	(1)	21	(31)	(11)
India franchise closures			(40)	(40)
At 31 August 2025	593	362	325	1,280
Closures (including India franchises):
Relocations / loss-makers	(14)	(5)	(2)	(21)
Landlord redevelopment	(3)	(3)	(3)	(9)
Lease expiries	(1)	(6)	(53)	(60)
	(18)	(14)	(58)	(90)

During the year, we opened 79 stores. As at 31 August 2025, our global business operated from 1,280 stores (2024: 1,291). As part of our strategy to improve the quality of our space, we closed 90 stores in the year. 21 closures were the result of relocations or removing loss makers, and in our Rest of the World division, 40 store closures in India were franchised stores. Outside of planned redevelopment, all of these closures were actioned in line with our strategy. Our focus will remain on opening more profitable stores and better quality space. As a result, we expect to see further store closures in the current financial year of c.65 stores and to open a further c.62 stores.

Excluding franchise stores, the global business occupies 1.2m square feet (2024: 1.2m square feet).

HIGH STREET

On 28 March 2025, the Group agreed to sell its UK High Street business comprising approximately 480 stores to Modella Capital. The transaction excluded the WHSmith brand, which was retained by the Group. The High Street business represented a separate major line of business and geographical area of operations. Accordingly, the results of this business have been classified as discontinued operations in accordance with IFRS 5. The related assets and liabilities were derecognised on completion of the sale.

The sale was completed on 28 June 2025. Under the terms of the agreement, the Group received an upfront cash payment of £10m at completion, with the remainder of the proceeds comprising contingent consideration linked to future cash flows and taxable profits of the divested business.

The carrying value of the net assets disposed was compared to the fair value of the total consideration receivable, net of estimated costs to sell of £27m.

FUNKYPIGEON.COM

On 14 August 2025, the Group completed the sale of its online personalised greeting cards business, funkypigeon.com Ltd, to Card Factory PLC for total consideration of £25m. The associated cost of sale amounted to £3m. The results of this business have been classified as discontinued operations in accordance with IFRS 5. The related assets and liabilities were derecognised on completion of the sale.   

ENVIRONMENTAL AND SOCIAL GOVERNANCE ('ESG')

We continue to make solid progress against our main sustainability commitments.

Our transition to a net zero business continues, with Scope 1 and 2 carbon emissions now 89% lower than in 2020 and 53% of our supply chain emissions covered by science-based carbon reduction targets. We will be commencing the process of seeking revalidation of our carbon targets by the Science Based Targets initiative within the next financial year, and will include a FLAG target to minimise forestry, land and agricultural emissions as our food offering continues to grow.

Our employee networks continue to grow, providing a channel for colleague-led engagement on our diversity and inclusion initiatives and employee policies and processes.

Our charity partnerships with the National Literacy Trust support children's literacy, and Miracle Flights support children who need to travel to receive life-changing medical care continue.

We are the top performing speciality retailer in Morningstar's Sustainalytics ESG Benchmark and have been awarded an ESG rating of AAA from MSCI. In addition, we were included, once again, in the Dow Jones World Sustainability Index.

FINANCIAL REVIEW

	IFRS			Headline pre-IFRS 162
£m	2025	2024	2025		2024
		Restated1			Restated1
Trading profit
UK2	131	126	130		122
North America2	22	38	15		34
Rest of the World and Other2	20	18	14		14
Group trading profit - continuing operations2	173	182	159		170
Unallocated central costs	(25)	(28)	(25)		(28)
Group operating profit before non-underlying items - continuing operations2	148	154	134		142
Net finance costs9	(46)	(48)	(26)		(28)
Group profit before tax and non-underlying items - continuing operations2	102	106	108		114
Non-underlying items2,9	(99)	(41)	(91)		(41)
Non-underlying items - Finance costs2	(1)	-	(1)		-
Group profit before tax - continuing operations2	2	65	16		73
Income tax charge	(26)	(22)	(27)		(24)
(Loss)/profit for the year - continuing operations	(24)	43	(11)		49
(Loss)/profit for the year - discontinued operations	(113)	17	(135)		13
(Loss)/profit for the year - total operations	(137)	60	(146)		62
Attributable to:
Equity holders of the parent	(144)	54	(153)		56
Non-controlling interests	7	6	7		6
	(137)	60	(146)		62

Total Headline trading profit² in the year was £159m (2024¹: £170m) of which the largest division, UK, generated a Headline trading profit² of £130m (2024: £122m). North America delivered £15m (2024¹: £34m) and ROW £14m (2024: £14m).

Group generated a Headline profit before tax and non-underlying items² of £108m (2024¹: £114m).

⁹ Excluding non-underlying Finance costs disclosed below

 

Net finance costs - Continuing operations

			Headline
	IFRS		pre-IFRS 162
£m	2025	2024 Restated1	2025	2024 Restated1
Interest payable on bank loans and overdrafts	11	14	11	14
Interest on convertible bonds	15	14	15	14
Interest on lease liabilities	20	20	-	-
Net finance costs before non-underlying items	46	48	26	28

Headline net finance costs before non-underlying items² (pre-IFRS 16) for the year were £26m (2024¹: £28m). This includes cash costs of £16m and £9m relating to the non-cash debt accretion charge from the convertible bond which has a fixed coupon of 1.625%.

Lease interest of £20m arises on lease liabilities recognised under IFRS 16, bringing the total net finance costs before non-underlying items on an IFRS 16 basis to £46m (2024¹: £48m).

Tax

The effective tax rate² was 42% (2024¹: 26%) on profit before tax and non-underlying items² for the year. This is higher than the UK corporation tax rate of 25% primarily due to the derecognition of US tax losses in 2025. Net corporation tax payments in the year were £28m (2024: £18m) after using all possible loss relief. Based on current legislation, we expect the effective tax rate² in the current financial year to be around 25%.

Earnings per share

Calculation of Headline diluted earnings per share - Continuing operations² 

	Headline
	pre-IFRS 162
£m - Unless otherwise stated	2025	2024 Restated1
Headline profit before tax10	108	114
Income tax expense10	(45)	(29)
Headline profit for the year10	63	85
Attributable to non-controlling interests	(7)	(6)
Headline profit for the year attributable to equity holders of WH Smith PLC10	56	79
Weighted average shares in issue (diluted) (no. of shares - millions)	129	131
Headline diluted EPS2,10 (p)	43.4p	60.3p

The above measures are calculated on a pre-IFRS 16 basis.  

Headline diluted EPS² was 43.4p (2024¹: 60.3p), a decrease of 28% on the previous year.

EPS calculated on an IFRS 16 basis is provided in Note 9, and a reconciliation between the IFRS 16 and pre-IFRS 16 earnings per share is provided in Note A4 to the Glossary on page 63.

The diluted weighted average number of shares in issue used in the calculation of Headline diluted EPS² assumes that the convertible bond is not dilutive and reflects the number of shares held by the ESOP Trust.

Profit attributable to non-controlling interests primarily represents the joint venture partner share of profit in relation to airport contracts in the USA. For the year ended 31 August 2025, the profit attributable to non-controlling interests was £7m (2024¹: £6m). 

¹⁰ Before non-underlying items 

Non-underlying items²

The Group has chosen to present a measure of profit and earnings per share that excludes certain items, which are considered non-underlying and exceptional due to their size, nature or incidence, or are not considered to be part of the normal operations of the Group. Non-underlying items in the year in the Income Statement are detailed in the table below.

		IFRS		Headline pre-IFRS 162
£m	Ref.	2025	2024 Restated1	2025	2024 Restated1
Items included in the Income statement
Amortisation of acquired intangible assets	(1)	(3)	(3)	(3)	(3)
Impairment of non-current assets	(2)	(53)	(22)	(24)	(14)
Provisions for onerous contracts	(2)	(3)	(4)	(24)	(9)
Transformation programmes - supply chain, IT and operational efficiencies	(3)	(25)	(7)	(25)	(7)
Costs relating to the investigation into accelerated recognition of supplier income in North America	(4)	(10)	-	(10)	-
Impairment of other receivables	(5)	(3)	-	(3)	-
Costs relating to M&A activity and Group legal entity structure	(6)	(1)	(4)	(1)	(4)
Costs associated with pensions		-	(2)	-	(2)
IFRS 16 remeasurement gains		-	3	-	-
Other non-underlying costs		(1)	(2)	(1)	(2)
Total non-underlying items recognised in the income statement before finance costs - continuing operations		(99)	(41)	(91)	(41)
Finance costs associated with onerous contracts	(2)	(1)	-	(1)	-
Total non-underlying items recognised in the income statement - continuing operations		(100)	(41)	(92)	(41)

(1) Amortisation of acquired intangible assets

Non-cash amortisation of acquired intangible assets of £3m (2024: £3m) primarily relate to the MRG and InMotion brands.

(2) Impairment of non-current assets and provision for onerous contracts

The Group has carried out an assessment for indicators of impairment of non-current assets across the store portfolio.

Where an indicator of impairment has been identified, an impairment review has been performed to compare the value-in-use of cash generating units, based on management's assumptions regarding likely future trading performance, aligned with the latest Board approved budget and three-year plan, to the carrying value of the cash-generating unit as at 31 August 2025.

As a result of this exercise, a non-cash charge of £24m (2024¹: £14m) was recorded within non-underlying items for impairment of non-current assets on a pre-IFRS 16 basis, of which £24m (2024¹: £13m) relates to property, plant and equipment and £nil (2024¹: £1m) relates to intangible assets (primarily software). On an IFRS 16 basis the total impairment charge of £53m (2024¹: £22m) comprises £24m property, plant and equipment (2024¹: £11m), £nil intangible assets (2024¹: £1m) and £29m (2024¹: £10m) right-of-use assets.

A charge of £24m on a pre-IFRS 16 basis (2024¹: £9m; IFRS 16 basis £3m; 2024¹: £4m) has been recognised in the income statement to provide for the unavoidable costs of continuing to service a number of non-cancellable supplier and property contracts where the space is vacant, a contract is loss-making or currently not planned to be used for ongoing operations. This provision will be utilised in line with the profile of the contracts to which they relate. The unwinding of the discount on provisions for onerous contracts is treated as an imputed interest charge, and has been recorded in non-underlying finance costs.

Of the total charge for impairment and onerous contracts, on a pre-IFRS 16 basis, £7m is attributable to the UK operating segment, £25m to North America and £16m to Rest of the World and Other. Impairment charges in the North America and Rest of the World and Other operating segments have principally arisen due to a lower trading outlook in certain individual stores across these regions, in addition to localised labour cost pressures in one particular grouping of stores..

(3) Transformation programmes

Costs of £25m (2024¹: £7m) have been classified as non-underlying in relation to a number of Board-approved programmes relating to supply chain (£3m), IT transformation (£11m) and operational efficiencies (£11m).

The supply chain transformation programme includes costs of reconfiguration of the Group's UK distribution centres following the outsourcing of operations to a third party (GXO), in order to generate a more efficient and productive supply chain to support the performance and growth of the Group's UK businesses. This project concluded in 2025.

The IT transformation programme includes costs relating to upgrading core IT infrastructure, data migration and investment in data security, store systems modernisation and other significant IT projects. These strategic projects will provide additional stability, longevity and operational benefits. The implementation will cover several years, and we anticipate total costs in the year ending 31 August 2026 to be around £5-7m.

The operational efficiencies programme commenced in the year and includes £6m of costs associated with the restructuring of store and field management structures within the UK segment, and £5m of head office restructuring and other transformation costs across all segments. This programme will deliver a more efficient operating model to support the Group's strategic objectives. The implementation of certain of these projects will continue into next financial year.

These multi-year programmes are reported as non-underlying items on the basis that they are significant in quantum, relate to a Board-approved programme and to aid comparability from one period to the next.

(4) Costs associated with the investigation into accelerated recognition of supplier income in North America

Costs incurred during the year include £10m of professional fees in relation to the investigation into accelerated recognition of supplier income in North America. We anticipate further costs in the year ending 31 August 2026 to be around £5m.

(5) Impairment of other receivables

The Group's other receivables include amounts due from non-controlling interest equity shareholders in certain of the Group's US subsidiaries which relate to contributions owed towards property, plant and equipment construction for stores. These contributions are used towards unit fixed asset buildouts and are received in accordance with the cash requirements of the subsidiary. Certain of these contributions are no longer considered to be recoverable based on the expected credit loss that considers the counterparty's ability to pay, which reflects the financial outlook of the associated stores. Such expected credit losses of £3m (2024: £nil) are recognised within non-underlying items where an impairment charge for store non-current assets has also been recognised within non-underlying items.

(6) Costs relating to Group legal entity structure

Costs incurred during the year include £1m (2024¹: £4m) of professional and legal fees in relation to a reorganisation of the Group's legal entity structure.

A tax credit of £18m (2024¹: £5m) has been recognised in relation to the above items (£18m pre-IFRS 16 (2024¹: £5m)) from continuing operations.

 

Cash flow

Free cash flow² reconciliation - Continuing operations

			pre-IFRS 162
£m				2025	20241
Headline Group operating profit before non-underlying items2				134	142
Depreciation, amortisation and impairment (pre-IFRS 16)11				51	44
Non-cash items				2	12
Headline EBITDA2, 11				187	198
Capital expenditure7				(81)	(105)
Working capital (pre-IFRS 16)11				4	(22)
Net tax paid				(28)	(18)
Net finance costs paid (pre-IFRS 16)11				(19)	(18)
Free cash flow2				63	35

¹¹ Excludes cash flow impact of non-underlying items

The Group generated a headline EBITDA² of £187m in the year (2024¹: £198m) demonstrating the cash generative nature of the business. Capex was £81m (2024¹: £105m⁷) as we continued to invest in new stores, IT and energy efficient chillers and other store equipment. We had a working capital inflow⁸ of £4m in the year (2024¹: outflow⁸ of £22m). This mainly relates to a one-off payables timing benefit linked to one of our large franchise partners, broadly offsetting an inventory increase relating to new store openings. This year, we expect an outflow mainly relating to the unwinding of this timing benefit and opening new stores. In total, there was a free cash inflow in the year of £63m (2024¹: £35m).

Net corporation tax payments in the period were £28m (2024: £18m).

Capex was £81m (2024¹: £105m⁷) which includes the additional spend from opening 79 stores around the world.

£m	2025	20241,7
New stores and store development	54	64
Refurbished stores	16	12
Systems	9	9
Other	2	20
Total capital expenditure	81	105

 

Reconciliation of Headline net debt²

Headline net debt² is presented on a pre-IFRS 16 basis. See Note 10 and Note A8 of the Glossary for the impact of IFRS 16 on net debt.

As at 31 August 2025, the Group had Headline net debt² of £390m comprising convertible bonds of £320m and net overdrafts of £70m (2024: £371m, convertible bonds of £310m and net overdrafts of £61m).

	Headline2
	pre-IFRS 16
£m	2025	20241
Opening Headline net debt2	(371)	(330)
Free cash flow2	63	35
Non-underlying items - continuing operations2	(38)	(17)
Dividends paid	(43)	(41)
Purchase of own shares for cancellation	(50)	-
Net purchase of own shares for employee share schemes	-	(12)
Receipt of pension surplus	75	-
Discontinued operations	(25)	7
Other	(1)	(13)
Closing Headline net debt2	(390)	(371)
Net overdraft	(70)	(61)
Convertible bond	(320)	(310)
Headline net debt2	(390)	(371)

In addition to the free cash flow, the Group had outflows relating to non-underlying items² from continuing operations of £38m (2024¹: £17m) mainly relating to transformation and restructuring projects and spend relating to prior year property provisions; the dividend of £43m (2024: £41m) being the final dividend from 2024 and the interim dividend from 2025; the £50m (2024: £nil) share buyback announced in September 2024; and £nil (2024: £12m) on own shares for the Group's share schemes. The Group also had an inflow of £75m (2024: £nil) in respect of receipt of the pension surplus following wind-up of the scheme and a net cash outflow related to discontinued operations of £25m (2024¹: £7m inflow).

This year, we would expect, subject to investment opportunities Headline net debt² to be in the region of £400m at the end of the year. The increase relates to continuing investment in new stores in North America alongside ongoing transformation costs.

On an IFRS 16 basis, net debt was £874m (2024: £997m), which includes an additional £484m (2024: £626m) of lease liabilities.

Leverage² - Continuing operations

		pre-IFRS 162
£m		2025	20241
Headline EBITDA2		187	198
Headline net debt2		390	371
Leverage - multiple		2.1x	1.9x

Leverage² at 31 August 2025 was 2.1x (2024¹: 1.9x), comprising headline net debt² over headline EBITDA². The Group plans to reduce the leverage position to below 2.0x.

 

Fixed charges cover² - Continuing operations

		pre-IFRS 162
£m		2025	20241
Headline net finance costs before non-underlying items 2		26	28
Headline fixed operating lease charges2 (Note A12)		232	216
Total fixed charges		258	244
Headline EBITDA2		187	198
Headline fixed operating lease charges2		232	216
Headline EBITDA before fixed charges2		419	414
Fixed charges cover - times		1.6x	1.7x

Fixed charges, comprising property operating lease charges and net finance costs, were covered 1.6 times (2024¹: 1.7 times) by Headline EBITDA² before fixed charges.

 

Return on capital employed² - Continuing operations

		ROCE %
		2025	20241
UK		38%	35%
North America		4%	10%
Rest of the World and Other		22%	23%
Group		18%	20%

Return on capital employed is calculated as the Group operating profit before non-underlying items² as a percentage of operating capital employed and is stated on a pre-IFRS 16 basis. Operating capital employed is calculated as the 12-month average net assets, excluding net debt, retirement benefit surplus/obligation and net current and deferred tax balances.

Balance sheet

			Headline2
	IFRS		pre-IFRS 16
£m	2025	20241	2025	20241
Goodwill and other intangible assets	447	490	449	491
Property, plant and equipment	254	316	251	308
Right-of-use assets	367	505	-	-
Investments in joint ventures	2	2	2	2
Non-current investments	4	-	4	-
	1,074	1,313	706	801
Inventories	148	209	148	209
Payables less receivables	(191)	(211)	(181)	(204)
Working capital	(43)	(2)	(33)	5
Net current and deferred tax asset	31	38	31	38
Provisions	(1)	(17)	(25)	(28)
Operating assets	1,061	1,332	679	816
Net debt	(874)	(997)	(390)	(371)
Net assets excluding retirement benefit surplus	187	335	289	445
Retirement benefit surplus	1	87	1	87
Total net assets	188	422	290	532

The Group had Headline net assets excluding the retirement benefit surplus of £289m, £156m lower than last year end reflecting the disposal of the High Street business. Under IFRS the Group had net assets before the retirement benefit surplus of £187m (2024¹: £335m).

Events after the balance sheet date

The FCA has commenced an investigation into the Company in respect of its compliance with UK Listing Principles and Rules and the Disclosure and Transparency Rules in relation to the matters announced by the Company on 19 November 2025.

Total stores by region

No. of stores		At 31 August 2025
UK		593
North America
	Air	274
	Resorts / Rail	88
	Total North America	362
Rest of the World and Other		325
Total		1,280

 

PRINCIPAL AND EMERGING RISKS AND UNCERTAINTIES

The Board regularly reviews and monitors the risks and uncertainties that could have a material effect on the Group's financial results. The principal risks and uncertainties that could lead to a material impact have not significantly changed from those listed in the Annual Report and Accounts 2024. No new principal risks were identified in the year, however there were six risks where the potential impact had increased over the year, with the remaining risks having no change in their overall impact. We have also recognised that the ongoing global conflicts have created further uncertainty in the macro economy. A summary of the principal risks has been provided below:

Risk and change in risk level	Impact
Treasury, financial and credit risk management - increased	The Group's exposure to and management of capital, liquidity, credit, interest rate and foreign currency risk are analysed further in Note 21 on page 154 of the Annual Report and Accounts 2024. The Group also has credit risk in relation to its trade and other receivables and sale or return contracts with suppliers. The Group's ability to ensure the accuracy of financial reporting including a failure to prevent fraud could result in misstatement and key decisions being taken on inaccurate information. The Group has begun the execution of the Remediation plan and has engaged a third party to provide assurance in respect of the Company's compliance with Provision 29 of the 2024 Code.
Economic, political, competitive and market risks - increased	The Group operates in highly competitive markets and in the event of failing to compete effectively with travel, convenience and other similar product category retailers, this may affect revenues obtained through our stores. Failure to keep abreast of market developments, including the use of new technology, could threaten our competitive position. Factors such as the economic climate, levels of household disposable income, seasonality of revenue, changing demographics and customer shopping patterns, and raw material costs could impact on profit performance. The Group may also be impacted by political developments both in the UK and internationally, such as regulatory and tax changes, increasing scrutiny by competition authorities and other changes in the general condition of retail and travel markets or impacts from further geopolitical threats or escalation in global conflict.
Brand standards - no change	The WHSmith brand is an important asset and failure to protect it from unfavourable publicity could materially damage its standing and the wider reputation of the business, adversely affecting revenues. As the Group continues to expand its convenience offer in travel locations, introducing a wider range of products, associated risks include compliance with food hygiene and health and safety procedures, product and service quality, environmental or ethical sourcing, and associated legislative and regulatory requirements.
Key suppliers and supply chain management - no change	The Group has agreements with key suppliers in the UK, Europe and Asia and other countries in which it operates. The interruption or loss of supply of core category products from these suppliers to our stores may affect our ability to trade. Quality of supply issues may also impact the Group's reputation and impact our ability to trade.
Store portfolio - no change	The quality and location of the Group's store portfolio are key contributors to the Group's strategy. Retailing from a portfolio of good quality real estate in prime retail areas and key travel hubs at commercially reasonable rates remains critical to the performance of the Group. Most Travel stores are held under concession agreements, on average for five to ten years, although there is no guarantee that concessions will be renewed or that Travel will be able to bid successfully for new contracts.
Business interruption - increased	An act of terrorism or war, or an outbreak of a pandemic, could reduce the number of customers visiting WHSmith outlets, causing a decline in revenue and profit. In the past, our Travel business has been particularly impacted by geopolitical events such as major terrorist attacks, which have led to reductions in customer traffic. Closure of travel routes both planned and unplanned, such as the disruption caused by natural disasters or weather-related events, may also have a material effect on business. The Group operates from different distribution centres and the closure of any one of them may cause disruption to the business. In common with most retail businesses, the Group also relies on a number of important IT systems, where any system performance problems, cyber risks or other breaches in data security could affect our ability to trade.
Reliance on key personnel - increased	The performance of the Group depends on its ability to continue to attract, motivate and retain key head office and store staff. The retail sector is very competitive and the Group's personnel are frequently targeted by other companies for recruitment.
International expansion - increased	The Group continues to expand internationally. In each country in which the Group operates, the Group may be impacted by political or regulatory developments, or changes in the economic climate or the general condition of the travel market.
Cyber risk, data security and GDPR compliance - increased	The Group is subject to the risk of systems breach or data loss from various sources including external hackers or the infiltration of computer viruses. Theft or loss of Company or customer data or potential damage to any systems from viruses, ransomware or other malware, or non-compliance with data protection legislation, could result in fines and reputational damage to the business that could negatively impact our revenue.
Environment and Social Sustainability - no change	Our investors, customers and colleagues expect us to conduct our business in a responsible and sustainable way. Climate change is now recognised as a global emergency. Failure to effectively respond and influence our value chain and wider stakeholders to decarbonise could damage our reputation and introduce higher costs. Delivery against our sustainability targets and meeting regulatory obligations is vital. We have identified several climate related risks, including; -     Increases in the cost of energy and fuel from carbon pricing and changing market dynamics; -     Disruption to supply of goods caused by acute and chronic changes in weather patterns. Although the impact is limited over our outlook period, these risks are potentially significant over the longer term.

This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulations.

This announcement contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group. By their nature, these statements involve uncertainty since future events and circumstances can cause results to differ from those anticipated. Nothing in this announcement should be construed as a profit forecast. We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

 

WH Smith PLC

Group Income Statement

For the year ended 31 August 2025

 

		2025			2024 (restated1)
£m	Note	Before non-underlying items2	Non-underlying items3	Total	Before non-underlying items2	Non-underlying items3	Total
Revenue	2	1,553	-	1,553	1,473	-	1,473
Group operating profit/(loss) - continuing operations	2,3	148	(99)	49	154	(41)	113
Finance costs	5	(46)	(1)	(47)	(48)	-	(48)
Profit/(loss) before tax - continuing operations		102	(100)	2	106	(41)	65
Income tax (expense)/credit	6	(44)	18	(26)	(27)	5	(22)
Profit/(loss) for the year - continuing operations		58	(82)	(24)	79	(36)	43
Profit/(loss) for the year - discontinued operations	7	24	(137)	(113)	27	(10)	17
Profit/(loss) for the year - total operations		82	(219)	(137)	106	(46)	60
Attributable to equity holders of the parent		75	(219)	(144)	100	(46)	54
Attributable to non-controlling interests		7	-	7	6	-	6
		82	(219)	(137)	106	(46)	60
Loss/(earnings) per share - continuing operations
Basic	9			(24.4)			28.7
Diluted	9			(24.4)			28.2
Loss/(earnings) per share - total operations
Basic	9			(113.4)			41.9
Diluted	9			(113.4)			41.2

¹ Comparative periods have been restated to correct the accelerated supplier income recognition and inventory related items in the North

America division (refer to Note 1b for further details) and to separately disclose results from discontinued operations (refer to Note 1a and Note 7 for further details).

² Alternative performance measure. The Group has defined and explained the purpose of its alternative performance measures in the Glossary on page 56.

³ See Note 4 for an analysis of non-underlying items. See Glossary on page 56 for a definition of Alternative Performance Measures.

 

 

WH Smith PLC         

Group Statement of Comprehensive Income

For the year ended 31 August 2025

 

£m			2025	2024 (restated1)
(Loss)/profit for the year			(137)	60
Other comprehensive (loss)/income:
Items that will not be reclassified subsequently to the income statement:
Remeasurement of the recoverability of retirement benefit surplus			-	87
Actuarial gains on defined benefit pension schemes			-	2
			-	89
Items that may be reclassified subsequently to the income statement:
Exchange differences on translation of foreign operations			(9)	(15)
			(9)	(15)
Other comprehensive (loss)/income for the year, net of tax			(9)	74
Total comprehensive (loss)/income for the year			(146)	134
Attributable to equity holders of the parent			(150)	129
Attributable to non-controlling interests			4	5
			(146)	134
Total comprehensive (loss)/income arising from:
-     Continuing operations			(33)	117
-     Discontinued operations			(113)	17
			(146)	134

 

¹ Comparative periods have been restated to correct the accelerated supplier income recognition and inventory related items in the North

America division (refer to Note 1b for further details) and to separately disclose results from discontinued operations (refer to Note 1a and Note 7 for further details).

 

WH Smith PLC

Group Balance Sheet

As at 31 August 2025

 

£m	Note					2025	2024 (restated1)		2023 (restated1)
Non-current assets
Goodwill	13					402	426		436
Other intangible assets	13					45	64		69
Property, plant and equipment	13					254	316		270
Right-of-use assets	13					367	505		444
Investments in joint ventures						2	2		2
Non-current investments						4	-		-
Retirement benefit surplus						1	-		-
Deferred tax assets						16	37		45
Trade and other receivables						25	24		19
						1,116	1,374		1,285
Current assets
Inventories						148	209		201
Trade and other receivables						102	126		101
Retirement benefit surplus						-	87		-
Derivative financial asset						-	-		1
Current tax receivable						23	2		3
Cash and cash equivalents	10					71	56		56
						344	480		362
Total assets						1,460	1,854		1,647
Current liabilities
Trade and other payables						(318)	(361)		(344)
Bank overdrafts and other borrowings	10					(461)	(117)		(84)
Lease liabilities						(90)	(125)		(116)
Derivative financial liabilities						-	-		(1)
Current tax payable						(1)	(1)		(1)
Short-term provisions						(1)	(4)		(1)
						(871)	(608)		(547)
Non-current liabilities
Bank loans and other borrowings	10					-	(310)		(301)
Long-term provisions						-	(13)		(16)
Lease liabilities						(394)	(501)		(450)
Deferred tax liabilities						(7)	-		-
						(401)	(824)		(767)
Total liabilities						(1,272)	(1,432)		(1,314)
Total net assets						188	422		333
Shareholders' equity
Called up share capital					28			29	29
Share premium					316			316	316
Capital redemption reserve					14			13	13
Translation reserve					(15)			(9)	5
Other reserves					(254)			(268)	(255)
Retained earnings					69			315	202
Total equity attributable to equity holders of the parent					158			396	310
Non-controlling interests					30			26	23
Total equity					188			422	333

¹ Comparative periods have been restated to correct the accelerated supplier income recognition and inventory related items in the North America division and to reclassify certain receivables from current to non-current (refer to Note 1b for further details).

 

 

WH Smith PLC                                                               

Group Cash Flow Statement

For the year ended 31 August 2025

 

£m	Note		2025	2024 (restated1)
Operating activities
Cash generated from continuing operations	11		330	249
Interest paid2			(32)	(35)
Financing arrangement fees			(3)	(1)
Income taxes paid			(28)	(18)
Net cash inflow from operating activities - discontinued operations			9	71
Net cash inflow from operating activities			276	266
Investing activities
Purchase of property, plant and equipment			(77)	(97)
Purchase of intangible assets			(4)	(9)
Receipt from settlement of financial instruments			7	9
Acquisition of subsidiaries, net of cash acquired			-	(6)
Proceeds received from investments			8	-
Net cash outflow from investing activities - discontinued operations			(3)	(25)
Net cash outflow from investing activities			(69)	(128)
Financing activities
Dividends paid			(43)	(41)
Purchase of own shares for employee share schemes			-	(12)
Purchase of own shares for cancellation			(50)	-
Distributions to non-controlling interests			(7)	(6)
Net drawdown on borrowings	10		24	33
Capital repayments of obligations under leases3	10		(86)	(73)
Net cash outflow from financing activities - discontinued operations			(30)	(39)
Net cash outflow from financing activities			(192)	(138)
Net increase in cash and cash equivalents in the year			15	-
Opening cash and cash equivalents			56	56
Closing cash and cash equivalents	10		71	56

¹ Comparative periods have been restated to separately disclose results from discontinued operations (refer to Note 7 for further details) and to reclassify the Receipt from settlement of financial instruments from Operating activities to Investing activities (refer to Note 1b for further details).

² Includes interest payments of £16m on lease liabilities (2024: £18m) for continuing operations. Interest payments on lease liabilities for discontinued operations were £4m (2024: £6m).

³ Capital repayments of obligations under leases for discontinued operations were £30m (2024: £39m)