Annual Report and Accounts 2025
The global travel retailer

In this report
Strategic report
The global travel retailer
1
Our business at a glance
5
Chair’s statement
6
Business model
8
Q&A with Interim Group Chief Executive
Andrew Harrison
10
Key market drivers
12
Our strategy
14
Key performance indicators
16
Review of operations
18
Group outlook
26
Financial review
27
Section 172(1) statement
34
Sustainability review
42
– Climate-related financial disclosures
52
– Non-financial and sustainability
information statement
63
Principal risks and uncertainties
65
– Viability statement
70
Corporate governance
Directors’ biographies
72
Corporate governance report
74
– Audit Committee report
84
– Nominations Committee report
90
– ESG Committee report
92
– Deloitte and Group Finance Review
94
Directors’ remuneration report
96
Directors’ report
120
Statement of directors’ responsibilities
125
Financial statements
Independent auditors’ report to the members
of WH Smith PLC
126
Group income statement
138
Group statement of comprehensive income
139
Group balance sheet
140
Group cash flow statement
141
Group statement of changes in equity
142
Notes to the financial statements
144
Company balance sheet
204
Company statement of changes in equity
205
Notes to the Company financial statements
206
Additional information
Glossary
209
Information for shareholders
223
Financial and operational highlights
1
Revenue 2025
£1.6bn 2024: £1.5bn
Headline diluted earnings per share
before non-underlying items
2
2025
43.4p 2024: 60.3p
Total number of stores 2025
1,280 2024: 1,291
Group profit before tax 2025
£2m 2024: £65m
Headline Group profit before tax
and non-underlying items
2
2025
£108m 2024: £114m
Dividend per share
3
2025
17.3p 2024: 33.6p
Find out more about WHSmith at: whsmithplc.co.uk
Disclaimer
This Annual report has been prepared for, and only for, the
members of the Company, as a body, and no other persons.
The Company, its directors, employees, agents or advisers
do not accept or assume responsibility to any other
person to whom this document is shown or into whose
hands it may come and any such responsibility or liability
is expressly disclaimed. By their nature, the statements
concerning the risks and uncertainties facing the Group in
this Annual report involve uncertainty since future events
and circumstances can cause results and developments
to differ materially from those anticipated. The forward-
looking statements reflect knowledge and information
available at the date of preparation of this Annual report
and the Company undertakes no obligation to update
these forward-looking statements. Nothing in this Annual
report should be construed as a profit forecast.
1 From continuing operations. Comparative periods
have been restated to correct the accelerated supplier
income recognition and inventory related items in the
North America division and to exclude results from
discontinued operations
2 Alternative performance measure described
andexplained in the Glossary page 209
3 Includes proposed final dividend of 6.0p
Subject toshareholder approval
WH Smith PLC is listed on the London Stock Exchange
(“SMWH”) and is included in the FTSE 250 Index.
linkedin.com/
company/whsmith
@whsmithofficial@WHSmith
whsmithofficial

The global
travel retailer
WH Smith PLC is a leading global travel retailer
for travel essentials with a presence across
more than 30 countries.
At the heart of our business are our people,
customers and partners. We aim to deliver our
vision through our strategic priorities and by
constantly innovating, improving the quality
of our space globally, focusing on profitability
and delivering sustainable returns.
Our stores
arelocated in
prime locations
worldwide
1 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

We offer a
widerange of
bespoke products
We tailor our
stores to suit
their location
2 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

We’re at the
forefront of
consumer trends
We deliver
exceptional
customer service
3 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

We drive success
through strong
partnerships
We’re here for
every step of
your journey
4 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Our business at a glance
K
ey:
Countries with WHSmith stores
Countries without WHSmith stores
As a leading global travel retailer,
ourc.9,000 colleagues operate our
stores across the world to serve our
customers on their journeys. Weare
infast growing markets and following
the divestment of our HighStreet
and Funky Pigeon businesses
wehave established a platform for
long‑term growth as a pure‑play
globaltravelretailer.
New stores opened
in 2025
79
*
c.9,000
colleagues
30+
countries
UK
The UK is the largest division in the Group and
operates stores in a range of locations, including
airports, the largest channel, as well as hospitals,
railway stations and motorway service areas.
Our strategy is to become a one-stop-shop for travel
essentials across UK transport hubs, supporting
customers on their journeys.
Stores
593
Revenue
£834m
North America
North America is the largest travel retail market in
the world. Our stores are primarily in airports across
the continent, and we also operate a smaller Resorts
business in Las Vegas. Through our own brand and
partner store formats, we offer a wide variety of travel
essentials to support customers’ journeys.
Stores
362
Revenue
£413m
Rest of the World
We operate in a further 29 countries around the world
and ensure our stores deliver outstanding customer
service and trade successfully. With a small market
share in many of our international markets, there are
clear opportunities for growth and we’re excited about
our future as a global travel retailer.
Stores
325
Revenue
£306m
* Total store position including store closures can
befound on page 26
5 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

This has been a year of significant change
and challenge for the Group.
We have taken decisive steps to reposition
the Group, including successfully
completing the sale of our High Street
business in June and funkypigeon.com
in August. Bothtransactions were in line
with our strategy to become a pure-play
travel retailer. Thistransformation has put
the Group in a strong position to benefit
from the opportunities in a high-growth
travel market with continued investment
and structural growth.
At the same time, we acknowledge that recent
months have brought challenges. Following our
announcement in August regarding the identified
accelerated recognition of supplier income in our
North America division, the Board acted quickly and
decisively. The Board immediately instructed Deloitte
LLP to undertake an independent and comprehensive
review (the Deloitte Review) and the findings of this
Review were delivered in November.
The findings in Deloitte’s independent Review are
disappointing and fall short of the standards we
expect at WHSmith. On behalf of the Board, I would
like to express my sincere apology to our shareholders,
our colleagues, and our partners.
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,
it was not consistent with the requirements of the
relevant accounting standards. Supplier income
recognition has therefore been overstated in our
North America division. This has also resulted in prior
year restatements.
“This has been a year of
significant change and
challengeforthe Group.”
Annette Court
Chair
Chair’s statement
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66 WH Smith PLC Annual Report and Accounts 2025

Chair’s statement continued
As confirmed by Deloitte, the overstatements
were substantially a timing issue rather than an
existence issue and they relate to the application
ofaccounting standards.
Importantly, the Internal Audit review, conducted
by the Company 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 Deloitte Review details that the 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. It also
identified weaknesses in the composition of the
North America finance team and insufficient
systems, controls and review procedures for supplier
income across commercial and finance functions in
North America.
The Board has taken this situation and the findings
of the Deloitte Review extremely seriously and we
remain fully committed to addressing the issues raised
with transparency and rigour. Working closely with
management, we have acted swiftly to put in place a
clear remediation plan and we are focused on fostering
a culture of integrity, transparency and accountability.
Further information on the remediation plan can be
found in the Financial review on page 33.
Following the delivery of the Deloitte Review, Carl
Cowling offered his resignation which the Board
accepted. Carl Cowling stepped down as Group
CEO and as a Board Director on 19 November 2025.
Andrew Harrison, CEO of our UK division, has been
appointed Interim Group Chief Executive and a director
of the Company with effect from 19 November 2025.
The Board is undertaking a comprehensive search
process for a new Group Chief Executive. The Board
iscommitted to appointing the strongest candidate
tolead the next phase of the Group’s development
and guide its long-term growth strategy.
I am also commited to strengthening the Board.
We are currently conducting an active search for two
non-executive directors, with one area of focus being
North American retail expertise. I look forward to
updating on this in due course.
As we look ahead, we have sharpened our focus and
reviewed our key priorities for each business division,
including strategic reviews of both our North America
and Rest of the World divisions. Each of these priorities
are underpinned by a focus on cost optimisation,
stronger capital returns, and enhanced cashflow
generation. You can read more about these priorities
in the Review of operations on pages 18 to 26.
Together with everything that has occurred in
the year, we remain acutely aware of how we fulfil
our environmental, social and governance (“ESG”)
responsibilities. It is our aim to achieve net zero by
2050 at the latest and we are focused on ensuring our
operations, and those of our suppliers, are set up to
achieve this. You can read more about our sustainability
strategy and highlights on pages 42 to 64.
Alongside our ESG commitments, colleague
engagement is at the heart of everything we aim to
achieve. We have recently launched a new all-colleague
app, named myWHSmith, which provides colleagues
with company news and information in an instant.
This also serves to connect our store and support
centre colleagues by highlighting key moments and
celebrating success.
Our colleague networks continue to thrive. During the
year, the team launched an additional network to
connect our international colleagues – internationALL.
It is inspiring to witness the hard work and passion
of our network members alongside their creativity
in delivering such an extensive programme of
events which support our ambition to create a fully
inclusive workplace.
I would like to take this opportunity to thank all
our colleagues for their hard work during the year.
Throughout challenging times, we build more
resilience as a team, and I have been proud of how our
colleagues have supported each other throughout
recent months.
Corporate governance remains an important area
offocus for the Board and underpins the sustainability
of our business and the achievement of our strategy.
A more detailed explanation of our approach to
corporate governance can be found in our Corporate
Governance report on pages 74 to 95.
As we look ahead, our priority is to close this most
recent chapter and move forward with clarity and
purpose. We are focused on disciplined execution
and in pursuing opportunities that deliver sustainable
returns and reinforce our position as a leader in
travel retail.
Our remediation plan is robust and in progress
andweare committed to implementing it at pace,
ensuring that every step strengthens the business for
the long term. This is not only about addressing issues,
it is about building resilience, restoring confidence,
and creating enduring value. I look forward
toupdating you on our progress in due course.
Annette Court
Chair
19 December 2025
7 WH Smith PLC Annual Report and Accounts 2025
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Business model
Understanding
customers
We understand and
respond to the needs
of the travelling
customer better than
anyone else.
Store locations
We have a network
of 1,280 stores in
premium, high footfall
locations in over
30 countries.
Service offering
We provide a fast,
convenient and easy
to navigate shopping
experience for our
customers and work
closely with a number
of strategic partners
(such as M&S Simply
Food, Costa Coffee,
Well Pharmacy and
Post Office Limited).
Operational
efficiency
We maintain an
ongoing focus on
efficiency, productivity
and cash generation
in each channel
and territory.
Landlord
partners
Our market-leading
store design, range
breadth and focus on
space management
allows us to deliver
superior economics
and innovative formats
for landlord partners.
Our people
We have c.9,000
dedicated colleagues
across our stores
andsupport centres.
Product range
We work hard to
constantly innovate
and improve our ranges
to ensure we offer a
first class proposition
for our customers on
the move.
Creating value for our stakeholders
Our unique combination of strengths:
Underpinned by: A commitment
to operating responsibly
You can read more about our approach
to ESG throughout the report.
Read more on pages 42 to 64.
Our culture and values
You can read more about our colleagues,
values and diversity throughout the report.
Read more on pages 47 to 49.
8 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Our customers
We bring our customers the
best products and services
for whichever of life’s journeys
they’re on.
Our community
groups
We operate a responsible
business that contributes to
the communities in which
we operate.
Our people
We provide an inclusive and
rewarding environment for our
colleagues to build a career
supported by our internal
colleague-led networks.
Our landlord partners
We are proud of our strong
landlord partnerships and we
work collaboratively with them
to ensure flexibility and that we
meet customer needs together.
Our investors
We focus on providing
consistent, profitableand
sustainable growth, returning
surplus cash to shareholders.
Our suppliers and
business partners
We work collaboratively with our
suppliers and business partners
to provide customers with a wide
range of products and to grow
our business and theirs.
Business model continued
Creating value for:How we create value:
For life’s journeys
Format and store design
Through our suite of market-leading, innovative
retail store formats, we are able to secure
premium, high footfall locations forour stores.
Product range
We work with our suppliers and partners to bring
together a broad range of products and services
to meet the needs of our customers.
Focus on space management
We continuously evaluate our store space and
theperformance of our categories to ensure that
we are maximising returns.
Invest in growing ourbusiness
The cash we generate as a Group is utilised
through our disciplined approach to our capital
tomaximise returns.
Read about how we engage with our stakeholders on page 34.
9 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Q&A with Interim
GroupChief Executive
Andrew Harrison
“Our immediate priority
is clear: to deliver
on our remediation
plan and rebuild trust
andcredibility.”
Andrew Harrison
Interim Group Chief Executive
What are the Group’s strategic
priorities for 2026?
Our immediate priority is clear: to deliver on
our remediation plan and rebuild trust and
credibility. The Group has also reviewed its
priorities for each division for FY26 and beyond,
designed to drive profitable growth and
strengthen our leadership in global travel retail.
First, we will continue to secure and expand
our presence through targeted new and better
quality space growth, focusing on strategic
contracts and hybrid formats while rationalising
sub-scale operations and leveraging franchise
models inselect markets.
Second, we aim to lead the market in customer
and commercial proposition. This means
optimising category mix, enhancing space
allocation, and expanding in high-growth areas
such as health and beauty, tech, and food-to-
go, including developing our Smith’s Family
Kitchen brand in the UK.
Third, we are evolving and scaling our operating
model – strengthening governance, simplifying
structures, and investing in finance and supply
chain transformation to support global growth
and improve efficiency.
Finally, we remain committed to maximising
cash generation and delivering attractive
returns on invested capital through disciplined
capital allocation, tight working capital
management, and operational improvements.
How does WHSmith continue
to stay relevant for today’s
travellingcustomers?
As a global travel retailer, we operate in
dynamic, high-growth markets across more
than 30 countries worldwide. Customers choose
us because they trust us to deliver a fast,
seamless, and convenient experience wherever
they travel.
This year, we’ve made strong progress by
expanding our offer and enhancing our ranges.
We’ve sharpened our focus on the categories
that matter most to customers on the move
– food and drinks, health and beauty, tech
accessories, and books and magazines. In the
UK, our Smith’s Family Kitchen range continues
to resonate strongly with customers and we’ve
broadened the selection to give travellers
even more choice. We see exciting potential
to grow this brand further, including exploring
standalone café formats. Beyond the UK, we’re
rolling out our one-stop-shop concept and
tailoring our offer to meet local needs.
Our commitment to operational excellence
keeps us relevant and competitive, driving
higher transaction values and growth across
every channel and division. By staying close
to our customers and maximising every
opportunity, we’re building a business that
delivers good growth and creates value
for shareholders.
10 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Q&A with Interim Group Chief Executive Andrew Harrison continued
What actions has the Group already
taken to strengthen governance
and restore confidence following
recent challenges?
The Group has acted decisively to reinforce
governance, strengthen controls and ensure
accountability across the business. We have
enhanced the Group Finance and Audit
and Risk teams with new leadership to
drive rigour and oversight and we are in the
process of reviewing the leadership team in
North America.
A clear remediation plan is in place and
governed by the Board. Key actions include
the North America division’s adherence to our
global supplier income policy, new governance
and control frameworks, and refreshed
mandatory training. We are accelerating the
implementation of a new supplier income
management system across the Group to
early 2026 and have also accelerated a Finance
Transformation programme to strengthen
systems, processes and controls while
centralising Group Finance oversight. To provide
additional assurance, we have engaged a third-
party provider to review and validate our key
financial controls and processes.
We are also committed to fostering a culture
of integrity, transparency and accountability
and to empowering our teams to speak up and
embed responsibility at every level.
While there is more to do, we are progressing
at pace while also ensuring we firmly embed
the plan into our ways of working for the
long term.
What progress have you made in
the year on your journey to become
a more sustainable business?
We continue to make strong progress across
our key sustainability priorities. Our transition
to becoming a net zero business is firmly on
track. Scope 1 and 2 carbon emissions are now
89 per cent lower than in 2020, and 53 per cent
of our supply chain emissions are covered by
science-based reduction targets. In the coming
year, we will undertake the preparatory work
necessary for revalidation of our carbon targets
by the Science Based Targets initiative and
the introduction of a FLAG target to address
forestry, land and agricultural emissions as our
food offering expands.
Beyond environmental goals, we’re building
an inclusive culture through our growing
employee networks. Our networks provide
aplatform for engagement on diversity,
equity and inclusion (“DEI”) initiatives and it is
wonderful to see the passion of our colleagues
who are driving our DEI agenda. Our charity
partnerships remain central to our purpose:
the National Literacy Trust helps us champion
children’s literacy in the UK while Miracle Flights
in North America supports children who need
to travel for life-changing medical care.
Our efforts are being recognised externally.
We are the top-performing speciality retailer
inMorningstar’s Sustainalytics ESG Benchmark,
hold a AAA ESG rating from MSCI, and were
once again included in the Dow Jones World
Sustainability Index. These achievements reflect
our commitment to responsible growth and
long-term value creation.
What underpins WHSmith’s
growthpotential?
At the heart of our proposition is a highly
scalable model with clear visibility of future
opportunities. Our global footprint is a major
competitive advantage, anchored by a strong
presence in the UK and growth potential
across North America and the rest of the world.
This international reach provides diversification
and a runway for expansion with an enhanced
focus on profitable growth.
We also lead in key categories. We are the
number two player globally in travel essentials
and number one in tech accessories through
our InMotion brand. Our sharp focus on
customer proposition, combined with growing
our food-to-go offer, creates additional avenues
for value creation.
Underpinning this is strong execution.
We deliver market-leading sales per passenger
growth, maintain a high tender win rate, and
have a robust pipeline of new stores. None of
this would be possible without our customer-
centric culture. Our dedicated teams and
insights ensure we continue to evolve and meet
traveller needs across all markets.
Together, these factors make WHSmith a
resilient growth business with clear potential to
deliver attractive future returns for shareholders.
11 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Passenger numbers travelling through airports
across the globe is the key market driver for the travel
retail market.
In 2024, passenger numbers exceeded pre-pandemic
figures for the first time, indicating an upward
growth trend. This is supported by analysis from the
International Air Transport Association (“IATA”) who,
at the end of 2024, predicted that 2025 would see
annual passenger traffic figures breach the five billion
mark for the first time in the history of the industry,
and many major airport partners across the globe
regularly reported record passenger traffic numbers
this year, supporting this prediction. Airports Council
International (“ACI”) also predict long-term growth in
global passenger traffic.
Given our prime location in airports globally, our stores
experience high levels of footfall driven particularly
byleisure travel over the summer months, and benefit
from growth in passenger numbers.
How we respond:
• Our market-leading store formats and breadth
of product range ensure we maximise the
number of passengers shopping in our stores
• Efficient use of store space enables us to
offer customers a breadth of travel essentials
products at a variety of price points to grow
average transaction values and drive returns
• Our operational expertise and agility allow us
to rapidly adapt to changing market conditions
and volatility in passenger numbers
• We remain extremely disciplined in
controlling costs
• We continue to ensure that we offer
consumers great quality products and value
formoney through our promotional offering
Where we have reliable data on passenger trends,
we see a correlation between changes in passenger
numbers and our revenue. Nevertheless, our stores
also face competition in product categories from
other retailers in air, rail, hospitals and motorway
service areas. Our markets are also impacted by
macroeconomic conditions. Interest rates, inflation
and costs could impact passenger numbers, as could
the threat of conflict.
The UK travel retail market is where we have our most
extensive presence. North America, our second largest,
is also the world’s largest travel retail market and
remains a good growth opportunity. Passenger data
here suggests this market will continue to grow.
Long-term Global Passenger Traffic Forecast
(2010–2053)
1
2010
Passengers (billions)
2011
2012 2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2053
2052
28
26
24
22
20
18
16
14
12
10
8
6
4
2
0
COVID-19
Pandemic
2042 2045
x2 of the 2024 level
2053
x2.4 2024 level
2024
recover to
2019 level
5.3
5.6
6.0
6.3
6.7
7.2
7.7
8.3
8.8
9.1
3.6
4.6
6.6
8.7
9.5
9.9
10.3
10.7
11.2
11.6
12.0
12.4
13.7
14.1
12.8
13.3
15.0
15.5
15.9
14.6
16.8
17. 3
17.7
18.2
18.7
19.1
19.6
20.0
20.5
21.0
21.4
21.9
22.3
16.4
Calendar year
Key market drivers
1 Source: ACI (Airports Council International)
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Strategic report Corporate governance Financial statements Additional information

We’ve expanded
our food range
Read more about Smith’s Family Kitchen on our website:
whsmithplc.co.uk
Smith’s Family Kitchen’s first
Christmas range, as well as
launching our first bakery range
to drive sales growth in our
expanding range ofCoffee Shops.
This mix of product innovation,
seasonal flair, operational
efficiency, and thoughtful
branding has helped redefine
what customers expect from
food-to-go in travel locations.
As we look ahead, we will evolve
our offer further to support even
more key mission moments, such
as breakfast, health-conscious
options, and hot food-to-go,
alongside developing more
premium, plant-based and global
flavour profiles. These range
extensions will improve choice
and relevance for a wider
audience across UK airports, rail
and hospitals.
Food is a core part of our one-
stop-shop offering for passengers.
From quick snacks to our famous
meal deal on the go, customers
turn to WHSmith to fuel
their journeys.
Last year, we launched our first
own-brand food-to-go range in
the UK, Smith’s Family Kitchen,
to grow the quality and range
of our food offer. The customer
response has been positive, and
Smith’s Family Kitchen continues
to attract widespread industry
recognition and awards.
To broaden our appeal to more
customers, this year we have
been enhancing the quality
and expanding Smith’s Family
Kitchen’s product range in line
with our customers’ needs.
This includes extending the
mealdeal mains range from
14 to 44 options and launching
seasonal products, including
13 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Our strategy
To make every one of life’s journeys better
Our purpose
WHSmith Group
To be the leading global travel essentials retailer
We do this by delivering reliable customer experiences, strategic partnerships and a lean retail
operating platform that delivers sustainable growth and lasting value for all our stakeholders
Expand our presence
through targeted and
profitable space growth
Lead the market
in customer and
commercial propositions
Maximise cash
generation and deliver
attractive ROCE
Evolve and scale
our advantaged
operating model
Driving
sustainability
High performing
teams
Lean, efficient
operations
Innovative store
formats
Focus on space
management
Our vision
Strategic priorities
Execution principles
Profit growth. Strong cash generation. Disciplined capital allocation. Shareholder returns.
14 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Our mission is simple:
to help get books into
the hands of children
The campaign raised money
for the National Literacy Trust
through every copy of the Diary
of a Wimpy Kid book sold by
WHSmith stores across the UK.
As a result, over £20,000 was
raised from customer purchases
of the book.
Sharing that love of reading is
at the heart of what we do, and
this campaign also helped bring
books to thousands of children
across the UK who might
otherwise miss out. Our mission
is simple: to help get books into
the hands of children, giving
them the chance to read, learn
and thrive.
Read more about the “Get Kids Reading” campaign at:
whsmithplc.co.uk
Books remain at the heart of
our travel offer for passengers.
While our extensive books
range means our stores are
destinations for customers to find
entertainment on their journeys,
we are also proud to work closely
with a range of organisations to
give back through books.
At WHSmith, we’ve always loved
the Diary of a Wimpy Kid books,
and we know our customers
do too. That’s why this year,
alongside registered charity
the National Literacy Trust and
publisher Puffin, we launched
a “Get Kids Reading with Diary
of a Wimpy Kid” campaign to
champion literacy, raise funds
to get books into the hands of
young readers who need them
most, and help grow a generation
of readers.
Diary of a Wimpy Kid books sold
40,621
Raised for charity
£20,310
15 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Key performance indicators
Our key performance indicators (“KPIs”) comprise a number of financial and non-financial metrics that enable us to evaluate our performance against our strategic goals.
Certain KPIs are alternative performance measures, which are defined and explained on page 209. These measures are used by the Board as they provide additional useful
information on the underlying performance of the Group. Statutory equivalents are provided where relevant.
All results are stated on a continuing operations basis with prior period comparatives restated to correct the accelerated supplier income recognition and inventory-related
items in the North America division unless otherwise stated.
Financial (£m)
The below measures are stated on a pre-IFRS 16 basis.
2
025
2
024
2
023
Group – continuing operations
£
1,553m
1,473
1,553
1,332
2
025
2
024
2
023
Headline Group trading profit¹
,
2
– continuing operations
170
159
155
£
159m
2
025
2
024
2
023
Headline Group profit before tax¹
,
2
– continuing operations
£
108m
114
108
102
2
025
2
024
2
023
Free cash flow¹ is defined as net cash inflow from
operating activities before the cash flow effect of
IFRS 16, non-underlying items, pension funding
and other non-cash items, less capital expenditure
(see page 30).
£
63m
35
63
14
2
025
2
024
2
023
Total dividend per share
1
7.3p
33.6
17.3
28.9
Headline diluted earnings profit per share
before non-underlying items¹
43.4p
2
025
2
024
2
023
60.3
43.4
72.0
1 Alternative performance measure defined and explained in the Glossary on page 209
2 Before non-underlying items
Headline trading profit
Dividend per share (p)
Revenue
Free cash flow – continuing operations
Profit before tax and non-underlying items
Earnings per share –
continuing operations (p)
16 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Key performance indicators continued
Non-financial
1 See page 26 for summary of store openings and closures in the year
Group total number of stores
1
CO
2
emissions (tonnes of CO
2
e)
2
025
2
024
2
023
1,280
1,291
1,280
1,253
2025
2024
2023
Global Scope 1 and 2 emissions
1,554
1,843
1,554
9,379
17 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Performance review
This is my first Annual Report and Accounts as Group
Chief Financial Officer following my appointment
tothe Board within the past year.
It 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 growth 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 Rest of the World and Other (“ROW”) division,
we will focus our investment onour core, strategically
important markets, including Australia, Ireland and
Spain, resulting in reducing our presence or exiting
sub-scale markets and using a less capital-intensive
franchise model for future openings.
Following the recent Deloitte Review, we have acted
swiftly to put in place a clear remediation plan and
we are making good progress. 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.
Travel
Group revenue
– continuing operations
£1,553m
(2024: £1,473m)
Headline trading profit
1,3
– continuing operations
£159m
(2024: £170m)
Group total
revenuegrowth
+5%
(2024: +11%)
1 Alternative performance measure defined and explained in the Glossary on page 209
2 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 exclude results from discontinued operations
3 Before non-underlying items
Review of operations
“It has been a year of
strategic progress and
significant challenge,
but we enter the next
phase with a clear plan
and renewed focus.”
Max Izzard
Group Chief Financial Officer
18 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information
18 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Review of operations continued
As a result of the identified overstatement in our North
America division, our results for the Group for the full
year ended 31 August 2025 have been impacted versus
previous expectations. Total revenue was £1,553m
(2024: £1,473m), up five per cent compared to the
previous year, generating a Total Headline trading
profit
1
in the year of £159m (2024: £170m
2
).
Trading
profit
1,3
(IFRS 16)
Headline
trading
profit
1,3
(pre-IFRS 16) Revenue
£m 2025 2024
2
2025 2024
2
2025 2024
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
Group 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 profit
1
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 Smith’s 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 per cent year-on-year, and six fold
growth when compared to pre-Covid levels 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, in turn, enhances 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 four at airports, ten in
hospitals and three 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 LFL
1
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 six per cent,
supported by spend per passenger growth of four per
cent on the prior year in Travel Essentials. In addition,
we have delivered strong average transaction value
(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, comes 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.
1 Alternative performance measure defined and explained in the Glossary on page 209
2 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 exclude results from
discontinued operations
3 Before non-underlying items
19 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Review of operations continued
Following its refit to the one-stop-shop format in
2023, our Birmingham store is the 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 Average Transaction Value
(“ATV”) growth of c.20 per cent and sales per square
foot up over 30 per cent. 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 in-store pharmacies and we will have
significantly enhanced our design and proposition.
These new stores will become true global flagships
forour one-stop-shop format.
Hospitals
Hospitals is our second largest channel by revenue in
the UK and it delivered another good performance
in the year, with total revenue up seven per cent.
This growth reflects the strength of our multi-format
approach and our strong partnerships.
1 Alternative performance measure defined and explained in the Glossary on page 209
We opened ten new stores in the year and we have
continued to grow with our partners M&S and Costa
Coffee. We have also further developed our Smith’s
Family Kitchen café proposition which gives us good
opportunities for further growth across UK hospitals.
Our proposition for NHS landlords is now 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 four per cent 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.
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 four to five per cent 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.
20 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Review of operations continued
During the year, revenue in North America increased
by seven per cent, on a constant currency basis,
with total revenue up three per cent to £413m
(2024: £401m). Further to the investigation undertaken
by Deloitte, Headline trading profit
1,3
was £15m
(2024: £34m).
The revision from the previous market expectation
of £55m includes a net reduction in supplier income
of £23m. 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 margin for FY25 before additional one-off
inventory-related costs of £12m is 6.5 per cent.
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.
1 Alternative performance measure defined and explained in the Glossary on page 209
2 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 exclude results from discontinued operations
3 Before non-underlying items
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 profit
margins
1,3
for the prior years are: 8.5 per cent for FY24
and 10.5 per cent 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 profit
margin
1,3
for the prior years of FY23 and FY24 is around
eight per cent.
Travel Essentials
Our priorities for this division are clear. Our Travel
Essentials business has consistently delivered a strong
performance, growing 19 per cent on a constant
currency basis in FY25, underpinned by customer
demand and attractive double-digit margins and this
will continue to be our focus in the current financial
year and beyond.
In 2022, Travel Essentials represented 37 per cent
ofthe overall North America business. Over the past
three years, we have invested and grown this business
and it now represents 55 per cent of total North
America revenue growth. Given our priority to deliver
the strongest returns, we expect this figure to increase
over the coming years as we focus on more profitable
space growth and higher margin categories.
The Travel Essentials segment is our most profitable
and on a fully allocated basis generates around a ten
per cent Headline trading profit margin
1,3
. As we scale
our business and enhance our operations, we expect
this to grow margins further, which in turn will support
the profitability of our North America business overall.
Given our priority to deliver strong returns, we expect
the proportion of Travel Essentials to increase to over
70 per cent in the medium term.
We have a strong pipeline of 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 our individual formats and
space within the 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 (“LFL”) decline and the
portfolio is large with 123 stores. During the year,
InMotion revenue declined three per cent year on year.
21 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

We’re embracing
the “Mini” in
health and beauty
Year on year growth in UK
20%
Mini products sold per year
2,000,000+
Read more about health and beauty on our website:
whsmithplc.co.uk
million units of minis sold across
the year, 20 per cent year on year
growth in our UK division.
Think in-flight-friendly
formats, trusted brands and
high-performance beauty.
And with our in-store pharmacy
partnership with Well Pharmacy
expanding too, our ranges can
cater for everyone from frequent
flyers to families.
Health and beauty will grow
increasingly more important in
our stores in the future, giving
passengers even more reasons
toshop with WHSmith.
Whether it’s a last-minute
weekend escape or the traditional
family summer holiday, many
customers are increasingly in
search of adventure near and far
and – ideally – some sun.
This means skincare, wellness
and self-care products are an
increasingly essential part of
our customers’ shopping mix,
making health and beauty a core
part of our one-stop-shop offer.
This year, the mini has become
mighty. Our extensive selection
of mini travel-sized products have
performed strongly with over two
22 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

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 pay back 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 per
cent with store numbers reducing below 100 in the
medium term.
Despite store closures, we see an opportunity to
increase margin with our strongest margin stores
retained, range optimisation and strengthened
operational performance.
Review of operations continued
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 per cent of Resort
revenue and, on a comparable basis, have declined
circa ten per cent 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.ten per cent of
Resort revenue. LFL revenue also declined around
seven per cent 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.
Air store profiles
Our strategy to grow in North American 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 eight-store package in
February 2022, including six 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 six per cent in these
stores, a current payback period of around three 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 payback
period here of less than three years and 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 five-store package: three
Travel Essentials stores, an InMotion store and a Coffee
Shop. This localised offer is performing very well, with
like-for-like growth of around nine per cent and a
payback period of around two 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.
23 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Revenue (% change)
Year to 31 August 2025
Total vs
2024
Total at
constant
currency
vs 2024
LFL
1
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
c.35-40 new stores due to open over the next year
and, currently, we anticipate closing c.30 stores as we
continue to improve the quality of our store portfolio.
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.
Review of operations continued
In the year ahead, we are expecting total revenue
growth in the region of six to eight per cent, driven
largely by space. In terms of profitability, we expect to
grow Headline trading profit margin
1,2
from four per
cent in FY25 to around seven to eight per cent in FY26.
This includes Headline trading profit
1,2
contribution
in the region of £5m, the rebuild of Headline trading
profit
1,2
excluding the non-repeat 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 (“ROW”) and Other
It has been a strong year for revenue growth.
Revenue was up 12 per cent, largely driven by new
store openings. Headline trading profit
1,2
was broadly
flat year-on-year, with investment in new store
openings and gross margin.
In our ROW division, 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
EBIT 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. It is less capital
intensive and will therefore drive stronger returns.
It also provides the ability to accelerate growth while
reducing operational complexity.
We have 325 stores open, of which 59 per cent are
directly-run, nine per cent are joint venture and 32
per cent are franchise. During the current financial
year, we expect to open around five stores and close
c.20 stores.
1 Alternative performance measure defined and explained in the Glossary on page 209
2 Before non-underlying items
24 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

We’re expanding
our Good Vibes
travel range
To support this, in 2025 we
expanded our own-brand tech
accessories range, Good Vibes.
Good Vibes features a wide range
from chargers and cables to
adaptors and travel cases which
are both practical and playful
with bold colours, patterns
and smart designs made for
modern explorers.
Already available in our InMotion
stores world-wide, the range
has now rolled out to WHSmith
stores across the UK too as we
look todrive more appeal for our
tech accessories from passengers
inour stores.
Recent research shows that
increasing numbers of customers
are seeing tech as vital as a
passport. According to YouGov,
89 per cent of Brits take a
smartphone on holiday – with
headphones, power banks
and tablets other popular
travel devices.
This is one example of why we
continue to expand our tech offer
through InMotion and our tech
accessories ranges in WHSmith
stores. As a result of our in-depth
understanding of today’s traveller,
tech remains a key part of our
offer to help passengers stay
powered up on their journeys.
Read more about the Good Vibes range on our website:
whsmithplc.co.uk
25 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Total Travel stores
Year to 31 August 2025
No. of stores UK
1
North
America
ROW
and
Other
Total
Travel
At 1 September 2024 594 341 356 1,291
Opened 17 35 27 79
Closed (18) (14) (58) (50)
India franchise closures – – (40) (40)
Net (closures)/openings (1) 21 (31) (11)
At 31 August 2025 593 362 325 1,280
Closures:
Relocations/loss-makers (14) (5) (2) (21)
Landlord redevelopment (3) (3) (3) (9)
Lease expiries (1) (6) (53) (60)
(18) (14) (58) (90)
We continue to focus on improving the quality of our
space to optimise profits. As a consequence of this
strategy, we expect to close as many stores as we open
on an annual basis in the short term.
During the year, we opened 79 new stores with 17 in
the UK, 35 in North America, (of which 32 were in Air
demonstrating our clear focus on this channel) and
27 in our Rest of World and Other division (of which
10 were franchised). At the same time, we closed 50
stores in the year, excluding 40 franchise closures in
India where the income received was zero. Outside of
planned redevelopment, all of these closures were
actioned inline with our strategy.
We expect to see further store closures in FY26
of c.65 stores and to open a further c.62 stores.
Excluding franchises, Travel occupies 1.2m square
feet (2024: 1.2m square feet). See page 5 for analysis
ofstore numbers by region.
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, to Card Factory PLC for total
consideration of £25m. The associated cost of sale
amounted to £3m.
funkypigeon.com was reported within the High
Street division, representing a major line of business
that the Group exited as part of its strategic shift to
become a travel-focused retailer and has therefore
been classified as a discontinued operation in
accordance with IFRS 5. Its results are presented
within discontinued operations, together with those
ofthe High Street business.
The assets and liabilities of funkypigeon.com Ltd
were de-recognised from the Group’s consolidated
statement of financial position upon completion of
the sale.
Group outlook
This has been a year of strategic progress and
significant challenge, and we now enter the next
phase with a clear plan and renewed focus.
Our immediate priority is to continue to implement
the remediation plan and to rebuild the North
America business swiftly and effectively, restoring
momentum and profitability.
At the same time, we have set clear priorities across
each division focusing on profitable growth and
strengthening our leadership position in global travel
retail. We are taking decisive action to optimise our
store estate, including exiting unprofitable stores and
markets where necessary, while investing in areas that
deliver sustainable growth.
We remain committed to driving profitable growth
through innovative retail initiatives that enhance
spend per passenger and deepen customer
engagement. These initiatives, combined with
disciplined cost control, rigorous capital allocation,
anda focus on return on invested capital, will underpin
everything we do.
Our enhanced financial discipline is central to
rebuilding confidence, creating long-term value for
shareholders, and reinforcing our position as a leading
global travel retailer.
Max Izzard
Group Chief Financial Officer
19 December 2025
Review of operations continued
1 Including one branch in the Isle of Man
26 WH Smith PLC Annual Report and Accounts 2025
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Financial review
IFRS
Headline
(pre-IFRS 16)
1
£m Continuing operations 2025 2024
3
2025 2024
3
Revenue 1,553 1,473 1,553 1,473
Group profit from
tradingoperations
1
173 182 159 170
Group profit
before taxand
non-underlyingitems
1
102 106 108 114
Non-underlying items
1
(100) (41) (92) (41)
Group profit before tax 2 65 16 73
Performance varied by division in the year. At a Group
level, our results for the full year ended 31 August
2025 were negatively impacted versus previous
expectations as a result of the supplier income
recognition issue identified in our North America
division and the one-off inventory costs subsequently
identified in this division.
Accordingly, all results stated are on a continuing
operations basis (following the sale of the High Street
and Funky Pigeon businesses) with prior period
comparatives restated to correct the accelerated
supplier income recognition and inventory-
related items in the North America division, unless
otherwise stated.
Revenue
Total Group revenue at £1,553m (2024: £1,473m) was up
five per cent compared to the prior year.
Revenue (% change)
Year to 31 August 2025
Continuing operations
Total
vs 2024
Total at
constant
currency
vs 2024
LFL
1
vs 2024
UK 5% 5% 5%
North America 3% 7% 2%
Rest of the World
andOther
10% 12% 7%
Total 5% 7% 5%
Total revenue was up five per cent (seven per cent on
a constant currency basis) to £1,553m and up five per
cent on a LFL basis. This was driven by a growth across
all divisions, with the UK up five per cent on a total
basis, North America up seven per cent
2
, and ROW
up12 per cent
2
.
Total revenue growth
of 5%, with growth
inalldivisions
5%
Headline diluted
earnings per share
1
43.4p
(2024: 60.3p)
Headline free
cash flow
1
£63m
(2024: £35m)
Headline
net debt
1
£390m
(2024: £371m)
1 Alternative performance measure defined and explained in the Glossary on page 209
2 Constant currency
3 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 exclude results from discontinued operations
27
Strategic report Corporate governance Financial statements Additional information
27 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Financial review continued
Trading profit
IFRS
Headline
pre-IFRS 16
1
£m Continuing operations 2025 2024
3
2025 2024
3
UK trading profit
1,2
131 126 130 122
North America
tradingprofit
1,2
22 38 15 34
Rest of the World and
Other trading profit
1,2
20 18 14 14
Group profit from
tradingoperations
1,2
173 182 159 170
The Group delivered a Headline Group profit from
trading operations
1
of £159m (2024: £170m
3
) down
six per cent. 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.
Net finance costs
IFRS
Headline
pre-IFRS 16
1
£m Continuing operations 2025 2024 2025 2024
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
items
1
(pre-IFRS 16) for the year were £26m
(2024: £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 per cent.
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 (2024: £48m).
Tax
The effective tax rate
1
was 42 per cent
(2024
3
: 26percent) on the profit for the year, reflecting
the derecognition of deferred tax assets in North
America. 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 rate in FY26 to be around 25per cent.
Earnings per share – continuing
operations
Calculation of Headline diluted earnings per share
1
Headline
pre-IFRS 16
1
Continuing operations 2025 2024
3
Headline profit before tax
2
(£m) 108 114
Income tax expense
2
(£m) (45) (29)
Headline profit for the year
2
(£m) 63 85
Attributable to non-controlling
interests(£m)
(7) (6)
Headline profit for the year
attributableto equity holders of
WHSmith PLC
2
(£m)
56 79
Weighted average shares in issue
(diluted) (no. of shares – millions)
129 131
Headline diluted EPS
2
(p) 43.4 60.3
The above measures are calculated on a pre-IFRS
16 basis.
Headline diluted EPS
1,2
was 43.4p (2024: 60.3p
3
),
adecrease of 28 per cent on the previous year.
EPS calculated on an IFRS 16 basis is provided in Note
10 to the financial statements, and a reconciliation
between the IFRS 16 and pre-IFRS 16 earnings per
share is provided in Note A4 to the Glossary on
page209.
The diluted weighted average number of shares in
issue used in the calculation of Headline diluted EPS
1
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 North America.
For the year ended 31 August 2025, this was £7m
(2024: £6m).
1 Alternative performance measure defined and explained in the Glossary on page 209
2 Before non-underlying items
3 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 exclude results from discontinued operations
28 WH Smith PLC Annual Report and Accounts 2025
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Financial review continued
Non-underlying items
1
IFRS
Headline
(pre-IFRS 16)
1
£m Continuing operations Ref. 2025 2024 2025 2024
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 associated with 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 (99) (41) (91) (41)
Finance costs associated with onerous contracts (2) (1) – (1) –
Total non-underlying items recognised in the Income statement (100) (41) (92) (41)
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 below.
A tax credit of £18m (2024: £5m) has been recognised
in relation to the above items (£18m pre-IFRS 16
(2024: £5m)) from continuing operations.
(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.
1 Alternative performance measure defined and explained in the Glossary on page 209
(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
(2024: £14m) was recorded within non-underlying
items for impairment of non-current assets on a pre-
IFRS 16 basis, of which £24m (2024: £13m) relates to
property, plant and equipment and £nil (2024: £1m)
relates to intangible assets. On an IFRS 16 basis
the total impairment charge of £53m (2024: £22m)
comprises £24m property, plant and equipment
(2024: £11m), £nil intangible assets (2024: £1m) and
£29m (2024: £10m) right-of-use assets.
A charge of £24m on a pre-IFRS 16 basis (2024: £9m;
IFRS 16 basis £3m; 2024: £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.
29 WH Smith PLC Annual Report and Accounts 2025
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Financial review continued
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 ROW. Impairment charges in
the North America and ROW 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 (2024: £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 £5m-£7m.
1 Alternative performance measure defined and explained in the Glossary on page 209
2 Excludes cash flow impact of non-underlying items
3 Excluding capital expenditure related to non-underlying items of £nil (2024: £1m)
4 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 exclude results from discontinued operations
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 M&A activity and Group legal
entity structure
Costs of £1m (2024: £4m) have been incurred arising
from professional and legal fees in relation to a
reorganisation of the Group’s legal entity structure.
Cash flow
Free cash flow
1
reconciliation –
continuingoperations
pre-IFRS 16
1
£m Continuing operations 2025 2024
4
Headline Group operating profit before
non-underlying items
1
134 142
Depreciation, amortisation and
impairment (pre-IFRS 16)
2
51 44
Non-cash items 2 12
Headline EBITDA
1, 2
187 198
Capital expenditure
3
(81) (105)
Working capital (pre-IFRS 16)
2
4 (22)
Net tax paid (28) (18)
Net finance costs paid (pre-IFRS 16)
2
(19) (18)
Free cash flow
1
63 35
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 division, and £5m of head
office restructuring and other transformation costs
across all divisions. 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.
30 WH Smith PLC Annual Report and Accounts 2025
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Financial review continued
The Group generated Headline EBITDA
1
of £187m
in the year (2024: £198m
4
). Capital expenditure was
£81m (2024: £105m) as we continued to invest in
new stores, IT and energy-efficient chillers and other
store equipment. We had a working capital inflow of
£4m in the year (2024: outflow 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 (2024: £35m). This year, we expect, subject
to investment opportunities, net debt 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 continuing
investment in new stores in North America alongside
ongoing transformation costs.
Net corporation tax payments in the period were
£28m (2024: £18m).
Capital expenditure was £81m (2024: £105m), which
includes the additional spend from opening 79 stores
around the world.
£m Continuing operations 2025 2024
New stores and store development 54 64
Refurbished stores 16 12
Systems 9 9
Other 2 20
Total capital expenditure
2
81 105
1 Alternative performance measure defined and explained in the Glossary on page 209
2 Excluding capital expenditure relating to non-underlying items of £nil (2024: £1m)
3 Draw-down of £141m as at 31 August 2025
4 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 exclude results from discontinued operations
Reconciliation of Headline net debt
1
Headline net debt
1
is presented on a pre-IFRS 16 basis.
See Note 20 of the Financial statements and Note 8
ofthe Glossary for the impact of IFRS 16 on net debt.
Pre-IFRS 16
1
£m 2025 2024
4
Opening Headline net debt
1
(371) (330)
Free cash flow
1
63 35
Non-underlying items – continuing
operations
1
(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 debt
1
(390) (371)
Net overdraft (70) (61)
Convertible bond (320) (310)
Headline net debt
1
(390) (371)
As at 31 August 2025, the Group had Headline net debt
1
of £390m comprising convertible bonds of £320m
and net overdrafts of £70m (2024: £371m, convertible
bonds of £310m and net overdrafts of£61m).
On an IFRS 16 basis, net debt was £874m
(2024: £997m), which includes an additional £484m
(2024: £626m) of lease liabilities.
In addition to the free cash flow, the Group had
outflows relating to non-underlying items from
continuing operations of £38m (2024: £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 (2024: £7m inflow).
This year, we would expect, subject to investment
opportunities Headline net debt 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.
Financing and capital allocation
The Group has highly 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 equivalents 71
Revolving credit facility
3
400 June 2030
Convertible bonds 327 May 2026
US private placement notes 200 2032-2037
Term loan 120 March 2028
The Group has a revolving credit facility (“RCF”) with a
maturity date of 13 June 2030 and a £327m convertible
bond with a maturity of 7 May 2026, which has a fixed
coupon of 1.625 per cent.
31 WH Smith PLC Annual Report and Accounts 2025
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Financial review continued
In 2025, the Group also secured new financing
arrangements to diversify the Group’s sources of debt
financing and to extend the Group’s debt maturity
profile in advance of the convertible bond maturing
on 7 May 2026. This comprised a three-year term loan
of £120m and US private placement notes of £200m
with a tenor of seven, ten and 12 years. The new
arrangements are undrawn at 31 August 2025.
As at 31 August 2025, Headline net debt
1
was £390m
(2024: £371m) and the Group has access to c.£650m
of liquidity.
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: PNC Capital Markets
LLC, J.P. Morgan Securities PLC, BNP Paribas, London
Branch and Skandinaviska Enskilda Banken AB
(PUBL). This additional loan provides further financing
surety for the group as a backstop facility, which will
remain in place until the US private placement notes
are drawn down and the convertible bond is repaid.
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 leverage 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, and,
protect our business assets through maintenance
and transformation projects; and
• 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 proposed a final dividend of 6.0p per
share in respect of the financial year ended 31 August
2025, which, together with the interim dividend, gives
a full-year dividend of 17.3p per share. This reflects
the cash generative nature of the business and our
confidence in the future prospects of the Group.
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.
Return on capital employed
1
ROCE %
2025 2024
2
UK 38% 35%
North America 4% 10%
Rest of the World and Other 22% 23%
Total Group 18% 20%
Return on capital employed is calculated as the
Headline Group operating profit
1,3
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/obligations and net
current and deferred tax balances.
Leverage
1
pre-IFRS 16
1
£m 2025 2024
2
Headline EBITDA
1
187 198
Headline net debt
1
390 371
Leverage – multiple 2.1x 1.9x
Leverage at 31 August 2025 was 2.1x (2024: 1.9x),
comprising Headline net debt
1
over Headline EBITDA
1
.
The Group plans to reduce the leverage position to
below 2.0x.
Fixed charges cover
1
pre-IFRS 16
1
£m 2025 2024
2
Headline net finance costs before
non-underlying items
1
26 28
Headline fixed operating lease charges
1
(Note A12)
232 216
Total fixed charges 258 244
Headline EBITDA
1
187 198
Headline fixed operating lease charges
1
232 216
Headline EBITDA before fixed charges
1
419 414
Fixed charges cover – times 1.6x 1.7x
Fixed charges, comprising fixed property operating
lease charges and net finance costs, were covered
1.6times (2024: 1.7 times
2
) by Headline EBITDA
1
before
fixed charges.
1 Alternative performance measure defined and explained in the Glossary on page 209
2 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 exclude results from discontinued operations
3 Before non-underlying items
32 WH Smith PLC Annual Report and Accounts 2025
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Balance sheet
IFRS
Headline
pre-IFRS 16
1
£m 2025 2024
2
2025 2024
2
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
(2024: £335m
2
).
Discontinued operations
The Group completed its sale of the High Street and
Funky Pigeon businesses in 2025, both of which
are considered discontinued operations. The loss
from discontinued operations in 2025 amounted
to£113m (2024: profit of £17m), primarily arising from
the difference between the carrying amount of net
assets disposed and the agreed selling price and
disposal costs.
Remediation plan
In response to the findings of the independent and
comprehensive review undertaken by Deloitte LLP,
wehave taken decisive actions and implemented
a robust remediation plan. Both the Board and
management are taking the situation and the
findings extremely seriously and are committed
toaddressing them swiftly and effectively.
The remediation plan is sponsored by the Group CFO
with the Chair of the Audit Committee providing
oversight from the Board. We have created an
Executive Committee drawn from Group Finance,
Risk and our People functions with responsibility for
delivery of the plan, and an external consulting firm
asan adviser to support the plan.
The remediation plan has been 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 the fix through cultural change,
enhanced training and monitoring.
Further details on the findings of the Deloitte Review
are set out onpages 94 and 95.
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.
Max Izzard
Group Chief Financial Officer
19 December 2025
Financial review continued
1 Alternative performance measure defined and explained in the Glossary on page 209
2 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 exclude results from discontinued operations
33 WH Smith PLC Annual Report and Accounts 2025
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Section 172(1) statement
Listening to our stakeholders
Stakeholder considerations play
an important part in the Board’s
discussions and decision-making to
promote the success of the Company.
Regular engagement ensures that
the Board is aware of stakeholder
views and interests and enables it to
operate in a balanced and responsible
way. TheBoard carefully considers
the diverse needs and priorities of
stakeholders in its decision-making,
while ensuring WHSmith’s long-term
success and reputation is promoted
andpreserved.
Section 172(1) of the Companies Act 2006 requires each
director to perform their duty to promote the success
of the Company for the benefit of its members as a
whole, and in doing so to have regard to the interests
of its stakeholders. WHSmith’s interactions with key
stakeholders and the ways inwhich their interests
have been taken into account by the directors in their
decision-making during the year ending 31 August
2025 are summarised on the following pages.
Further examples of how stakeholder views have been
considered can be found in our Corporate governance
section on pages 74 to 95.
Our purpose:
To make every
one of life’s
journeysbetter
Our people
Customers
Investors and
lenders
Landlord
partners
Community
groups
Suppliers
andbusiness
partners
34 WH Smith PLC Annual Report and Accounts 2025
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Section 172(1) statement
continued
Key Board decisions in 2025
Decision to divest the High Street
and Funky Pigeonbusinesses
In the first quarter of the financial year, the Board made
a strategic decision to explore options for a divestiture
of the High Street division. Advisers were appointed to
seek expressions of interest from potential purchasers.
Following receipt of offers, commercial negotiations
and due diligence, a sale of the High Street and
Funky Pigeon businesses were agreed in June and
August respectively.
During the process, the Board focused primarily on
delivering value for shareholders and the long-term
future of the Company, while also considering the
potential impact on all other stakeholder groups:
• Investors: the Board engaged with the Company’s
key investors to ensure their feedback was
considered in the decision-making process.
• Our people: the Board ensured colleagues were kept
informed by executive management throughout
the offer period to ensure transparency and alleviate
concerns from colleagues.
• Suppliers: an extensive transformation programme
was initiated to ensure that contractual arrangements
for suppliers were novated to the new trading entities
in order to minimise any disruption to trading terms
and conditions.
• Landlord partners: the Company actively
communicated with landlord partners at
appropriate times to explain the reasoning behind
the business strategy and provide reassurance that
customer service and operational activity would
continue as normal.
Strategic action supported by theBoard
• Appointment of an executive steering committee
tooversee the divestitures and manage the
operational separation activities of the continuing
and discontinued businesses.
Strategic action supported by theBoard
• The commissioning of an independent and
comprehensive review conducted by Deloitte LLP.
• The establishment of a Special Committee of
directors to oversee the independent review process
and engage with Deloitte LLP.
• Engagement with investors and lenders.
• Engagement with other stakeholders, including
colleagues, landlord partners, customers and
suppliers within the confidentiality parameters
of the Deloitte Review and applicable legal and
regulatory requirements.
The Board took further action in 2025 as the Deloitte
Review continued through to its completion.
Further details are provided on page 95.
Outcomes
The principal outcomes of the commissioning of the
Deloitte Review, in addition to the proactive measures
undertaken by the Board were:
• Analysis of the Deloitte Review’s findings, and
immediate and long-term remediation actions
to address material weaknesses of controls and
governance and failures identified.
• Delegation of the oversight of the remediation plan
to the Audit Committee Chair, with the Group CFO
as the plan sponsor.
• Reinforcement of the global supplier income
policy across the North America division, with new
governance and controls frameworks and refreshed
mandatory training.
• Acceleration of the introduction of a new Group-
wide supplier income management system and
Finance Transformation programme.
• A commitment to fostering a culture of integrity,
transparency and accountability and empowering
teams to speak up.
• An ongoing process to consider actions to be taken
in respect of individuals and to strengthen the North
America leadership, finance and commercial teams.
• Ongoing engagement with the Company’s brokers,
advisers and management to ensure oversight
and control.
• Disclosure to the financial markets in accordance
with UK Listing Rules.
• Regular engagement with prospective purchasers,
followed by dialogue with all stakeholder groups
toprovide feedback and assurance.
• Engagement and constructive debate with
executive management and WHSmith colleagues.
Outcomes
By implementing these strategic actions, the
Company achieved, or aimed to achieve, the
following outcomes:
• A decision by the Board to divest the High
Street businesses.
• Reassurance to investors, lenders, colleagues,
customers and suppliers that the Company would
continue to deliver its commercial aims during a
period of potential change to minimise disruption
and uncertainty.
• Appropriate governance and oversight from the
Board in relation to the proposals, decision-making
and due diligence, providing stakeholders with
confidence and assurance.
Decision to commission an
independentreview
The Company announced in August 2025 that
afinancial review had identified there had been
anoverstatement of expected trading profit in North
America for the current financial year and that the
Board had commissioned an independent and
comprehensive review by Deloitte LLP.
As directed by the Board, the Deloitte Review focused
on an investigation into the timing of the recognition
of supplier income in North America. Further details
can be found on page 94.
35 WH Smith PLC Annual Report and Accounts 2025
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Our people
The success of WHSmith depends
on all of the colleagues employed
by the Company. It is essential
that they feel engaged,
motivatedand appreciated.
Section 172(1) statement
continued
What matters to our people
• Feeling valued
• Being treated with respect and dignity
• Having opportunities for personal growth
andcareer development
• Being rewarded fairly
How did we engage?
• Our designated non-executive director for workforce
engagement, Simon Emeny, provided oversight
forthe Board
• Simon Emeny attended employee forums to listen
to feedback from colleagues
• The Chief People Officer updated the Board on
employee-related matters, including employee
engagement, staff retention rates, learning and
development, gender pay gap statistics, diversity
and inclusion, and workforce remuneration
• The Group Chief Executive and other senior
executives hosted regular webinars with support
centre colleagues to provide strategy and
performance updates and answer any questions
• Board members and senior executives attended
business meetings throughout the year, including
leadership meetings, trading updates and Risk
Committee meetings and inclusion sessions
• Our annual employee engagement survey
wasfollowed up with meetings with colleagues
to gain further understanding and build action
plans together
What were the key topics raised?
• Implications for colleagues of the sale of the High
Street and Funky Pigeon businesses
• Job security, remuneration and benefits
• Development and growth for all of our colleagues
• Work/life balance and wellbeing
• Culture and authenticity
How did we respond?
• The Board approved an action plan to address
actions from the employee survey and monitored
implementation throughout the year
• We continued to highlight our WHSmith
Values based on Customer Focus, Drive for
Results, Accountability and Valuing our People,
incorporating them into our employee policies
andperformance management processes
• We extended our learning and development
proposition, giving colleagues access to a wider
range of development opportunities
• We reviewed our processes for performance
management and communicated a new approach
to providing feedback and evaluation for colleagues
throughout the year
• We increased our communication and engagement,
including more targeted communications for
different teams, and continued with webinars
and business line specific meetings with
senior executives
• Management acted on feedback from our employee
networks, chaired by sponsors from our Executive
Committee, giving all colleagues the opportunity
to participate and influence our broader diversity,
equity and inclusion (“DEI”) strategy
36 WH Smith PLC Annual Report and Accounts 2025
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Section 172(1) statement
continued
What matters to our customers
• Availability and range of products
• Convenience and nature of the store environment
• Customer service
• Value for money
• Safe and responsibly sourced products
How did we engage?
• Board members visited stores to assess and review
the customer experience and service standards
• The Managing Directors of each business unit
updated the Board on customer engagement,
market trends and commercial responses
• We used quantitative and qualitative analysis
ofcustomer feedback through point of sale, online
surveys and focus groups, to provide additional
customer insights
• Store teams and customer service teams are
inconstant dialogue with customers
• The Board received regular updates on customer
feedback and service standards, and ensured
systems were in place to comply with all relevant
product safety legislation
What were the key topics raised?
• Convenience of our offering
• Nature of store environments
• Customer service levels
• Product availability
• Pricing
How did we respond?
• The Board received strategy updates from
the Managing Directors of each business
unit and approved the customer-facing
commercial strategies
• We further extended the roll-out of our one-stop-
shop formats for travel essentials providing food-to-
go, health and beauty, tech accessories, books and
magazines under one roof
• We continued to invest in our retail estate, opening
79 new stores during the year
• We looked at ways of tailoring our customer
experience in different formats to optimise how
weengage with different customer segments
• Customer feedback was communicated to the
relevant parts of the business for further action
where needed
Customers
Customer loyalty and enthusiasm
for our retail proposition are
critical to our success.
Understanding the needs
ofourcustomers ensures that
weprovide the products and
service that they expect.
37 WH Smith PLC Annual Report and Accounts 2025
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Section 172(1) statement
continued
Investors and lenders
Our investors include individual
and institutional shareholders,
and providers of debt and
financial capital, such as banks
and bondholders. We maintain an
active dialogue with our investors
through an extensive investor
relations programme.
What matters to our
investorsandlenders
• Long-term value creation and growth opportunities
• Capital allocation
• High-performing Board and Senior Executives
• High standards of business conduct and
good governance
• Transparency
How did we engage?
• Individual meetings, virtual presentations and
investor roadshows were hosted by members
ofthe Board
• The Board received reports and updates about
shareholder relations at each meeting to ensure
that Board members were informed of investors’
and proxy advisers’ views on strategy and
corporate governance
• Direct engagement for investors took place via our
Investor relations team
• Annual report and interim trading updates with
investor presentations were provided by the
Group Chief Executive and Group CFO. These were
interspersed by more regular trading updates
• An online portal, operated by our registrar,
Computershare, provided shareholders with
theability to manage their shareholdings
• At our Annual General Meeting, the Group Chief
Executive gave an update on how the Group
isperforming and the Board answered questions
from shareholders
What were the key topics raised?
• Strategy for business growth
• Operational delivery
• More detailed information on the return
oncapital employed
• Corporate governance practices
• Sale of divested businesses and reshaping
ofthe Company
How did we respond?
• The Board dedicated one of its meetings to
reviewing and approving the Company strategy
• The Group Chief Executive and Group CFO held
meetings with individual shareholders as part of
aninvestor roadshow
• We conducted investor interactions through
meetings with major institutional shareholders,
individual shareholder groups and financial analysts,
attended by directors and senior management,
including our Chair, Group Chief Executive and CFO
• The ESG Committee incorporated investor feedback
into the ESG strategy
• The Chair and Chair of the Audit Committee
engaged with the Company’s largest shareholders
in respect of the North America accounting issue
38 WH Smith PLC Annual Report and Accounts 2025
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Section 172(1) statement
continued
Landlord partners
Our landlord partners own the
buildings where our retail units are
located. They include airport
operators, rail infrastructure partners,
hospital trusts and other retail estate
landlords. Our business success is
dependent on retaining and winning
new space and in order to do so, we
must understand what considerations
are important to them.
What matters to our
landlordpartners
• Store formats and product ranges that are appealing
to their customers
• Customer service and satisfaction
• Value of revenue and rent paid per square metre
ofretail space
• Effective operational implementation
• Compliance with their sustainability requirements
How did we engage?
• Board, executive and senior managers met
with landlords
• We held regular dialogue with landlord
representatives on performance levels in existing
stores and future opportunities
• As part of the tender submission process for new
contracts, we attended meetings, webinars and
conducted written engagement with landlords
• We participated in various landlord-hosted working
groups to collaborate on different challenges
on topics
• We organised store visits for landlords to share
examples of latest retail formats
• Membership of appropriate trade bodies and
attendance at industry conferences and events
What were the key topics raised?
• Board approval for tenders in Australia, Ireland,
theUK and the USA
• Emerging global trends in retailing and
implications for store design and WHSmith format
development opportunities
• Sustainability requirements as part of tender
submissions and subsequent landlord
partner dialogue
How did we respond?
• We opened 79 new stores during the year
• We continued our focus on product ranges, stock
volumes and staffing levels to meet demand from
seasonal increases in airport footfall
• The Group invested in store design, shop fit-outs
and product ranging
• We continued to develop a variety of format options,
including extension of a one-stop-shop for travel
essentials, greater localisation of designs and
aplatform for a variety of brands
• We confirmed ongoing dialogue with airport
operators on ways to work together to ensure that
we meet customer needs
39 WH Smith PLC Annual Report and Accounts 2025
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Section 172(1) statement
continued
Community groups
The relationship we have with the
communities where we operate is
key to the sustainability of our
business. We work with a range of
international, national and local
charities, supporting them
through a combination of
fundraising, volunteering and
financial and in-kind donations.
What matters to our
communitygroups
• Support for local and national causes
• High standards of corporate responsibility
forenvironmental and social issues
How did we engage?
• The Board’s ESG Committee met four times
during the financial year and received briefings
from the Sustainability Director on environmental
and social issues, including interactions with
community stakeholders
• Senior managers participated in sustainability-
focused working groups for trade organisations such
as the British Retail Consortium and Ethical Trading
Initiative (“ETI”)
• We held regular meetings with key charity partners
• The Group participated in ESG surveys run by
organisations such as the disclosure organisation,
CDP, the United Nations Global Compact and
the ETI
• Stakeholders raised questions, views and concerns
through the sustainability@whsmith.co.uk
email address
What were the key topics raised?
• Support for community groups and charities
• The importance of support for pre-school children
indisadvantaged areas to address disparities in
levels of literacy
• A wide range of different charities and community
groups applied for support
How did we respond?
• The ESG Committee reviewed and approved the
Sustainability Strategy, action plans and targets for
the year under our three pillars of Planet, People
and Community
• We continued our long-term partnerships with
the National Literacy Trust in the UK and Miracle
Flights in North America, and provided financial and
in-kind support to a number of other charities and
community causes with over £1m in donations
• We discussed possible partnerships with landlord
partners to look at ways to help local communities
• We participated in industry working groups on key
environmental and social issues
40 WH Smith PLC Annual Report and Accounts 2025
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Section 172(1) statement
continued
Suppliers and
businesspartners
We work closely with thousands
ofsuppliers, ranging from large
multinational companies to small
and medium-sized enterprises,
toprovide products, goods and
services which are critical for the
smooth running ofour business.
We have agreements with joint
venture, franchise and other
partners to run stores on our
behalf and our UK and US-based
distribution centres and logistics
are operated by a third-party
provider, GXO.
What matters to our suppliers
and business partners
• Fair trading and prompt payment in line with
agreed terms
• Opportunities for growth in their business
• A business partner that treats them fairly
• Responsible sourcing and high ethical standards
inthe supply chain
• Long-term relationships
How did we engage?
• Board overview of information on key suppliers
where material, for example, when approval of major
supplier or franchise contracts is required
• Overview by the ESG Committee of labour and
environmental standards in the supply chain
viaquarterly and annual updates
• Direct engagement with suppliers and franchise
partners via individual meetings
• Supplier conferences for major groups of suppliers
such as trade suppliers for individual businesses
or geographies, or suppliers of non-trade goods
and services
• Programme of audit and supplier engagement
onlabour standards
• Anonymised survey of workers in our own-brand
supply chain
What were the key topics raised?
• Supplier and product innovation
• How suppliers can expand their product offerings
within WHSmith stores
• Supply chain operations to ensure the right
products at the right time
• Strategies for science-based carbon targets and
optimal packaging design
• Compliance requirements for emerging legislation
How did we respond?
• The Board, through the Audit Committee,
received updates on the risk and resilience of our
supply chains
• We worked with business partners to provide
suppliers with customer insight data specific
toour stores
• The Board oversaw the consolidation of UK
warehousing from three sites to one
• We engaged with suppliers on human rights
due diligence in their supply chains and carbon
reduction targets and plans
41 WH Smith PLC Annual Report and Accounts 2025
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Sustainability review
WHSmith has a long-standing
programme of sustainability activity.
As a leading global travel retailer,
we recognise the influence our
business canhave on society and the
environment – and the importance
ofusing that influence forgood.
Our customers, colleagues and partners expect us
to act with integrity, and we know that responsible
operations are key to delivering long-term business
success. Sustainability is embedded in how we work
and is an important part of our business.
Developed through stakeholder engagement, our
sustainability strategy targets the issues where our
actions can have the greatest impact. It is built around
three core pillars – Planet, People, and Communities
– which shape our initiatives and guide our progress.
These pillars rest on a strong foundation of ethical
business practices, providing a consistent framework
for responsible action.
Responsible business policies and processes
Minimising our
impact on theplanet
Net zero by 2050
Reduce packaging and waste
Zero deforestation in our
supply chain
Our journey to a sustainable business
Creating value for all stakeholders
Engaging
our people
Protect health, safety
and wellbeing
Promote diversity, equity
and inclusion
Human rights and
supplier management
Contributing
tocommunities
Help children to develop
alove of reading
Make a positive impact
through fundraising,
donations and volunteering
Reduced Scope 1 and 2
emissions by 89 per cent since
2020, exceeding our science-
based target trajectory.
Increased the percentage of
emissions in our supply chain
covered by science-based
targets to 53 per cent.
Completed an initial
assessment of nature-based
risks associated with our
supply chain.
Expanded the reach and
influence of our diversity,
equity and inclusion
employee networks.
Continued our partnership
with the National Literacy Trust,
running promotions to raise
funds for their work.
Our sustainability highlights
42 WH Smith PLC Annual Report and Accounts 2025
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Sustainability review continued
Governance and our
approach toreporting
Environmental and social governance (“ESG”)
issues are central to risk management, business
development and delivery of the expectations of
shareholders. A fully embedded framework of clear
governance structures, risk management processes
and internal controls is key to the delivery of our
sustainability activities.
Our Board-level ESG Committee has oversight
ofour sustainability strategy, setting our ambition
and monitoring progress as detailed on pages 92
to93. Board and executive-level committees ensure
that ESG risks and opportunities are well-managed
and that we deliver against our sustainability
commitments. Our governance bodies regularly
discuss new and existing topics that matter to
our stakeholders. Priority issues are addressed
by programmes and action plans with clear and
measurable targets and committed resources.
We undertake an annual materiality assessment
todetermine the most important sustainability issues
for our business. This assessment incorporates the
views of stakeholders who provide input in a number
of different ways (see pages 34 to 41). We use their
feedback to identify areas where our activities could
have an impact on society and/or the environment,
or where there are significant risks or commercial
opportunities for our business.
The assessment is reviewed by our ESG Steering
Committee and is used to determine what we
measure and include within our reporting, which
isalso informed by stock exchange listing and
corporate governance rules. Further details are
provided in our Sustainability Addendum and Policies
and Position Statements.
Our governance framework
Board
Ultimate responsibility for all aspects of ESG, including strategy,
risk management and prioritisation of key issues
Audit Committee
Provides oversight of
risk management of
ESG, including internal
controls and external
reporting requirements
ESG Committee
Provides oversight of the
ESGstrategy and monitors
progress against objectives
and targets
Remuneration
Committee
Ensures remuneration policies
and plans support ESG targets
Group Executive Committee
Defines and monitors business strategy and financial plans,
including those related to ESG
ESG Steering Group
Responsible for developing ESG action plans and
delivering progress against objectives and targets
Business Risk Committees
Responsible for implementing risk management
processes, including those relating to ESG
43 WH Smith PLC Annual Report and Accounts 2025
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Benchmark External rating
Again included in the Dow Jones Sustainability World Index based on long-term economic,
environmental and social criteria (now renamed Dow Jones Best in Class Index). One of only
11 speciality retailers to beincludedglobally.
Received an ESG Risk Rating of 10.3 from Sustainalytics assessed at low risk of experiencing
material financial impacts from ESG factors. This rating places us in the top position for
speciality retailers.
Awarded a “C+” rating by Institutional Shareholder Services, placing in the top decile for
sustainability industry leaders.
AAA, the highest possible rating awarded by Morgan Stanley Capital International in its ESG
assessment, signifying a leader in managing material ESG risks and opportunities relative to
industry peers.
The ESG Committee has responsibility for ensuring
the Group has appropriate climate policies, action
plans and targets that are part of a wider sustainability
strategy. This includes the development of short,
medium and long-term goals and targets in relation
to climate change, development of a carbon
transition plan and monitoring progress. This year,
the ESG Committee discussed climate change
infour meetings.
The ESG Committee received dedicated briefings
from the Sustainability Director on current and
emerging legislation, including changes to reporting
requirements in the UK and Europe, and reviewed
progress against the Group’s carbon targets. Climate-
related skills and experience of individual ESG
Committee members are set out on pages 72 to 73.
The Remuneration Committee ensures that, where
appropriate, the Group’s incentive plans are aligned
with targets relating to climate change. Climate-
related performance indicators have been included
in theLong-Term Incentive Plan awards as set out
onpage 102.
We engage with a number of external proxy agencies,
benchmarking schemes and other membership
organisations. We are signatories of the UN Global
Compact and we continue to rank highly in external
benchmarks and indices (correct asat31 August 2025).
Responsible business practices
We place great importance on our business operating
in a responsible and ethical manner. We aim always
to act with integrity, making the right decisions and
demonstrating the appropriate behaviours to earn
the respect of our customers and all those with
whom we do business. We expect our people to
report areas of non-compliance and for all such areas
to be appropriately investigated and acted upon.
Unfortunately, the Deloitte Review has shown that
we have fallen short of these standards inour North
American business. The Board recognises the need to
do better going forwards. The remediation plan that
it has introduced includes robust measures to seek to
ensure that all parts of the Company act with integrity,
and our colleagues understand the role they have
to play to ensure the business operates responsibly
and ethically.
Our Code of Business Conduct sets out how our
business operates, and what is expected of every
person who works for, and on behalf of, WHSmith.
Sustainability review continued
It includes policies relating to individual conduct,
such as for anti-bribery and anti-corruption measures,
conflicts of interest and data protection, as well as
those relating to how we work together, such as
for DEI, anti-harassment and bullying, and health
and safety. It also sets out our business standards in
relation to fair trading practices, such aspricing and
marketing, quality and product safety, trade controls,
competition and supply chainpractices.
All colleagues are required to confirm that they
have read, and are working in accordance with, our
Code of Business Conduct on an annual basis and
are encouraged to report any suspected breaches.
Everyone who works for, or on behalf of, WHSmith
has a responsibility to report anything that they
are aware of that may be unlawful or criminal, or
could amount to an abuse of our policies, systems
or processes. Reports can be made internally or
using our independently operated and confidential
whistleblowing helpline at safecall.co.uk/report.
Safecall operates under a non-retaliation policy, so that
anyone who raises a concern in good faith is treated
fairly. Each report is formally and robustly investigated
and monitored to ensure that any corrective action
or remediation has been undertaken. The helpline
isavailable to our suppliers and business partners and
is communicated through our Responsible Sourcing
Requirements. These standards set out in more
detail the behaviours and conduct we expect from
all suppliers.
We require all colleagues and anyone working for
usin any capacity to comply with the UK Bribery
Act, in addition to any local anti-bribery and anti-
corruption laws. Our Code of Business Conduct states
that colleagues or others working on our behalf must
never offer or accept any kind of bribe, and that our
subcontractors, consultants, agents and others we
work with must have similar anti-bribery and anti-
corruption measures in place.
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Sustainability review continued
Aim Target Progress
Climate action Net zero emissions
by2050
By 2030: reduce absolute
Scope 1 and 2 emissions
by80 per cent from 2020
base year.
Absolute Scope 1 and
2 emissions for the
continuing business
reduced by 89* per cent
since 2020.
By 2027: 75 per cent
ofsuppliers by emissions
covering purchased
goods and services and
up-stream transport
anddistribution will have
science-based targets.
As of 31 August 2025, 53* per
cent of purchased goods
and services and up-stream
transport and distribution
emissions are covered by
science-based targets.
Reducing waste Reduce the
environmental
impactfrom waste
andpackaging
By 2025: reduce waste
material and minimise
own-brand plastic
packaging against
a2020baseline.
Waste generated from
the discontinued business
reduced by 20 per cent.
Waste in the continuing
business is segregated and
minimised, but no data is
available because collection
is aggregated by landlord
partners with waste from
other retailers.
Protecting
naturalresources
Net zero deforestation By 2025: ensure forestry
materials in own-brand
and non-trade goods
come from recycled or
certifiedsources.
100* per cent of pulp,
paper and timber in
own-brand and non-
trade products purchased
during 2025 came from
certified sources or
recycledmaterials.
We engaged SLR Consulting to provide independent limited assurance covering components of the data marked with an
asterisk (*) in accordance with assurance standard ISAE 3000. Full details of the methodology and SLR Consulting’s assurance
statement are available at whsmithplc.co.uk/sustainability
Climate action
We recognise we have a responsibility to reduce
theimpact on climate and nature from our activities.
WHSmith is targeting net zero across our full value
chain by 2050, aligned with the scientific pathway to
limit global warming to no more than 1.5˚C averaged
above pre-industrial levels.
We have already made good progress towards this
target, reducing emissions by 89 per cent since 2020.
We have a long track record of reducing energy
consumption and increasing efficiency, investing in
technology and equipment, and switching to lower-
carbon sources of energy and fuel.
But we know that more is needed, particularly
for emissions in our wider value chain, and so we
continue to work with our suppliers to encourage
them to focus on setting out their own trajectories
tonet zero. 53 per cent of Category 1 and 4 supply
chain emissions are now covered by science-based
carbon reduction targets.
Our carbon transition plan includes a number
of initiatives to reduce carbon emissions from
stores andlogistics, to switch more of our power
torenewable sources and to take action to adapt
tothe changing climate.
We know that we will not be able to reach net zero
in isolation, and encourage customers, suppliers,
business partners and policy makers to join us on
our journey.
This year, we have separated the energy and carbon
data for our continuing and discontinued businesses,
with previous years being recalculated so that
baselines, trends and current status can be compared.
More information on our climate strategy, including
commitments, climate risks, opportunities and action
plans for transitioning to net zero, is included in our
climate-related financial disclosures on pages 52 to 62.
Planet
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Sustainability review continued
Reducing waste
Waste is not only damaging to the environment but
adds additional cost to our business. We are focused
on reducing excess materials and maximising
recycling wherever we can.
The majority of waste from our continuing business
arises from stores where our landlord partners
are responsible for central shared collection and
treatment facilities. These include airports, railway
stations and hospitals, where all waste is aggregated
from multiple tenants, and store-specific waste data
isnot available.
We participate in site-level working groups with some
of our partners to look at ways of working together
with other retailer partners to reduce waste generated
at a site, and improve segregation for recycling.
We operate a recycling system which enables us to
recycle most forms of waste, including cardboard,
paper, plastics and metals. Separate facilities for waste
segregation are available in our stores, distribution
centres and support centres.
Reusable skips transport goods between distribution
centres and stores, minimising the need for more
disposable packaging made from cardboard or plastic.
We regularly review the type and quantities of
packaging we use for our own-brand products,
including both primary and secondary packaging
used to protect goods during transit and distribution.
We look for ways to minimise packaging where
possible and use cardboard and forms of plastic
that can be recycled where these provide a better
environmental option than virgin and hard-to-
recycle materials.
In the UK, we are reviewing the implications of
Extended Producer Responsibility legislation, and
looking at ways to minimise financial costs through
more effective packaging design.
We are in regular dialogue with many of our suppliers
of tertiary branded products, particularly for our food
and drink ranges, and are monitoring developments
in the industry in relation to increased use of
recycled materials.
We continue to focus on reducing food waste, which
predominately arises from chilled food that has
reached its use-by date. Our stock control systems use
historical and predictive data to order enough food to
meet customer demand, while ensuring that we only
stock food that we expect to sell.
In order to further reduce waste, we operate
adiscounting strategy to reduce the price of chilled
food that is approaching, but has not yet exceeded,
itsuse-by date.
We partner with the food redistribution organisation
Too Good to Go, who provide an online application
to connect customers to any of our stores that have
surplus unsold food.
This application allows customers to reserve a
bag of food, which is approaching its use-by date,
topurchase later in the day from a WHSmith store
atareduced price.
Natural resources
Our Biodiversity Policy sets out our standards and
requirements for our supply chain and includes a
zero deforestation policy for any WHSmith-branded
products. Our standards require that all paper, card
and wood for our own-brand products are sourced
from legal and well managed forests that have been
certified to credible certification standards such
asFSC
®
or PEFC™ or from verified recycled sources.
Suppliers must provide proof of Chain of Custody
certification and in line with the requirements
of national and international timber regulations,
we carry out an assessment of supplier timber-
sourcing systems.
Through our due diligence processes, we can
demonstrate that 100* per cent (2024: 100 per
cent) ofWHSmith-branded products containing
paper-based materials originate from certified or
recycled material.
Preparations are well under way to comply with EU
Deforestation Regulations, where in-scope products
inEurope which are made from cocoa, paper or
timber, will be risk assessed in accordance with
the legislation.
This year, we completed a biodiversity risk
assessment aligned to the Taskforce for Nature
Disclosures (“TNFD”) framework and covering the
full value chain, including operations, upstream and
downstream activities.
This assessment of both dependencies and impacts
identified that the main biodiversity risks for WHSmith
are associated with sourcing of products made from
high volume commodities such as cocoa and coffee.
A secondary risk is associated with increasing
regulatory impacts based on components that have
potential nature-related impacts such as packaging
and product origin requirements for deforestation.
We are now looking at how we should respond
to these risks through additional mitigation and
incorporating our responses into our climate
transition planning.
46 WH Smith PLC Annual Report and Accounts 2025
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Sustainability review continued
Aim Target Progress
Employee
experience
Create an
environment that
supports physical,
mental and financial
wellbeing
By 2025: improve our
employee engagement
score from a 2021
baseyear.
Our fourth global engagement
survey undertaken in October 2024
showed a 27 per cent improvement in
engagement levels.
Health, safety and wellbeing have remained
a priority, with a continued focus on root
cause analysis for any accidents.
This year, we ensured that learning
opportunities were included
within individuals’ performance
review discussions.
Diversity,
equity and
inclusion
Increase diversity of
seniormanagement
By 2025: increase
gender and ethnic
diversity of the Board,
Group Executive
and senior manager
populations from
a2021base year.
The proportion of women at Board level
has increased from 37 to 50* per cent.
Following the sale of the High Street and
Funky Pigeon businesses, within the
continuing business:
• the proportion of women at Group
executive level has reduced from
abaseline of 22 to 11* per cent
• the proportion of female senior managers
has increased from 32 to 33* per cent
• six* per cent of senior managers are from
ethnic minorities.
Human rights
in oursupply
chain
Protect workers
rights in our
supplychains
By 2025: 15 per
cent of own-brand
suppliers will have
worker representation
committees in place.
20* per cent of own-brand suppliers have
worker representation committees inplace.
We engaged SLR Consulting to provide independent limited assurance covering components of the data marked with an
asterisk (*) in accordance with assurance standard ISAE 3000. Full details of the methodology and SLR Consulting’s assurance
statement are available atwhsmithplc.co.uk/sustainability. All data in this table is for the continuing business other than the
engagement score which is for the Group pre-divestiture of the High Street and Funky Pigeon businesses
Employee engagement
Effective colleague engagement and an open,
inclusive culture are essential to creating an
environment for our teams to deliver for our
customers. We continue to focus on ways in which
our colleagues can share their experiences of working
with WHSmith. Our Group Chief Executive, Group CFO
and the Managing Directors of each division brief our
support centre teams on a monthly basis to provide
updates on the Company’s strategy and the latest
operational developments and answer any questions.
We have a number of communication channels
that are used for engaging colleagues across the
business, including feedback forums with senior
management and various network committees with
executive sponsors.
To help us to understand more about how our
colleagues feel about working for WHSmith, we
use a third-party research organisation to carry out
our annual engagement survey. The results of the
survey are used to improve the working environment
in support centres and stores; advance dialogue
and engagement; and build collaboration across
our teams.
Our people
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Sustainability review continued
Talent, learning and development
Our talent, learning and development programmes
are designed to provide our colleagues with the
knowledge and skills they need to deliver their role
and to support them as they develop their careers.
We provide a range of learning opportunities designed
to help our colleagues develop their aptitude
and experience.
These include online courses, development
workshops, mentoring and coaching and we continue
to review and progress these activities, to ensure
that they meet the requirements for our business
and colleagues. Individuals also have regular career
conversations with their managers during the year,
with more formal performance reviews taking place
twice yearly.
Reward and benefits
We believe in rewarding all colleagues with fair and
competitive reward packages. All colleagues are
entitled to a base salary and benefits, including
pension and staff discount. Participation in a pension
plan is offered to all colleagues in accordance with
local legislation. We support working from home
through hybrid working arrangements in roles where
remote working is feasible.
In the UK, WHSmith operates a government-approved
Save-As-You-Earn share option scheme, which
provides colleagues with the opportunity to acquire
shares in the Company on favourable terms. At the
end of the savings period, the participant has the
opportunity to buy the shares at a special option price
that is fixed at the start of the scheme at a discount
tothe share price at that time. As at 31 August 2025,
337 colleagues were participating.
Health, safety and wellbeing
We are committed to maintaining high standards
ofhealth, safety and wellbeing and the Board
monitors the Company policies, processes and
practices on an annual basis. The Group has a number
of health and safety committees that comprise
colleague representatives and professional health and
safety advisers.
Colleagues receive health, safety and wellbeing
training appropriate to their role, including in relation
to fire safety, manual handling, how to prevent
slips, trips and falls and how to recognise and help
colleagues who may be affected by poor mental
health. The Group Health and Safety at Work Policy
is the basis for our health and safety management
system, which sets out responsibilities, processes
and procedures.
This year, there were 42* reportable accidents across
the Group involving colleagues, contractors and
members of the public and no fatalities. We continue
to look at the root causes of safety incidents to try
toeradicate them at source.
To help protect the broader wellbeing of our
colleagues, we are committed to creating a workplace
where our colleagues feel valued, have a sense of
belonging and are supported at every stage of their
career. Our aim is to ensure that all line managers
are trained in mental health awareness and that they
have access to the right tools to be able to support
colleagues who may be experiencing stressful
life events.
WHSmith has partnered with several organisations
to ensure our mental wellbeing provision is robust
and meaningful. In the UK, the Retail Trust provides
our Employee Assistance Programme (“EAP”),
offering support for colleagues and immediate family
members, and in-store counselling when incidents
occur. Localised EAP offerings are also available for
colleagues in other countries.
Research shows that financial wellbeing can have
a strong impact on our mental health. Current and
retired colleagues and their families who are in
financial difficulty or hardship can apply for help from
the WHSmith Benevolent Fund, a registered charity
established in 1925. Financial support and many
useful budgeting and educational resources are also
available for our colleagues to access through our EAP.
Diversity, equity and inclusion
At WHSmith, our people are fundamental to the
success of our business whatever their age, race,
religion, gender, sexual orientation or disability.
We continue to focus on developing a culture of DEI,
backed up bya framework of policies, procedures
and ways ofworking, including a Board-approved
DEI policy.
We hope that our people genuinely feel that they
can bring their whole selves to work. We want to
ensure that all our colleagues receive equal and
fair treatment, and this applies to recruitment and
selection, terms and conditions of employment,
promotion, training, development opportunities
and employment benefits. We believe in
creating aworking environment that is free from
discrimination and harassment, and we will not
permit or tolerate this in any form.
Our DEI action plan sets out how we are working
towards our goal of creating an environment where
everybody is welcome and feels they belong. Our DEI
Committee enables colleagues from across our
business to engage directly with leadership and work
collaboratively on improvements.
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Sustainability review continued
We recognise the value that employee networks
can bring. This year we added a seventh employee
network for international colleagues, InternationALL,
to our existing networks covering Pride, Gender Equity,
Race and Culture, Disability, Parents and Carers, and
Wellbeing. These groups have provided a channel
for colleague-led engagement and input to our
DEI priorities.
The networks are each sponsored by a member of the
Group Executive, providing visible senior leadership
and a way for colleague views to be relayed to the
senior management team.
We run regular internal engagement campaigns
linked with key events during the year, including
International Women’s Day, Pride, Black History
Month, International Day of Persons with Disabilities
and a variety of religious celebrations. These activities
are always framed as part of our wider DEI strategy.
Our external partnerships continue to evolve and allow
us to externally benchmark our work. We have signed
several industry charters, committing to making
progress on improving DEI in our business.
We are signatories to the British Retail Consortium’s
Race at Work Charter, and are members of the
industry organisation, Diversity in Retail. We have
continued our involvement with the Stonewall
Diversity Champions programme, developed to
unlock the potential of our LGBTQ+ workforce. We also
partner with the Business Disability Forum.
In terms of equal opportunities, the Company
gives full and fair consideration to applications for
employment when these are received from disabled
people. Training, career development and promotion
opportunities are equally applied for all our colleagues,
regardless of disability.
We remain committed to improving diversity at senior
levels. Our latest Gender Pay Report can be found on
our website.
Gender representation as at 31 August 2025 (continuing business)
Number of
employees
Percentage of
employees
Number of
seniormanagers
Percentage of
seniormanagers
Men 3,923* 42%* 45* 65%*
Women 5,367* 57%* 23* 33%*
Not specified/prefer not to say 51* 1%* 1* 2%*
Ethnic representation as at 31 August 2025 (UK continuing business)
Number of
employees
Percentage of
employees
Number of
seniormanagers
.Percentage of
seniormanagers
White British or other White
(including minority-white groups)
2,742* 59%* 47* 85%*
Asian/Asian British
1,050* 22%* 2* 4%*
Black/African/Caribbean/
BlackBritish
182* 4%* 0* 0%*
Mixed/multiple ethnic
82* 2%* 1* 2%*
Other ethnic group
104* 2%* 0* 0%*
Not specified/prefer not to say 501* 11%* 5* 9%*
Senior managers include executive management and direct reports defined as colleagues graded at levels one and two below
We engaged SLR Consulting to provide independent limited assurance covering components of the data marked with an
asterisk (*) in accordance with assurance standard ISAE 3000. Full details of the methodology and SLR Consulting’s assurance
statement are available at whsmithplc.co.uk/sustainability
Human rights and our supply chain
As a global retailer, we have a responsibility to respect
and support the dignity, wellbeing and human rights
of those in our own business, our supply chain and the
communities that we serve.
We must act in a way that avoids infringing the rights
of others and prevents adverse human rights impacts.
We manage this through due diligence processes in
line with the United Nations Guiding Principles for
Business and Human Rights.
Our Human Rights Policy sets out the minimum
requirements that everyone working for, and with,
WHSmith must meet.
We are committed to ensuring full respect for the
human rights of anyone working for us in any capacity
and to fair and safe work for all workers throughout
our supply chain.
We prioritise those risks where the impact on workers
is likely to be greatest and where we are likely to be
able to have the greatest impact through our actions.
The six priority areas for protecting human rights in
our supply chain are: health and safety; freedom of
association and collective bargaining; working hours
and overtime; gender equality; social insurance; and
supply chain transparency.
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Sustainability review continued
We use a number of external sources of information
and data published by governments, international
agencies and other third-party experts; and
information gathered from workers during site visits,
surveys and on-site meetings.
We take a zero-tolerance approach to modern slavery
and our latest Modern Slavery Statement sets out the
steps we have taken to implement this stance.
WHSmith is a member of the Ethical Trading Initiative
(“ETI”), an alliance of companies, trade unions and
non-governmental organisations that promotes
respect forworkers’ rights around the globe.
Our Responsible Sourcing Requirements are based
on the ETI Base Code and underpin our strategy and
sustainable sourcing activities. We will only place
orders with suppliers who are committed to working
towards compliance with these standards, and we
endeavour to bring about continual improvement
through a programme of factory audits and
ongoing engagement.
This year, we participated in several working groups
with other retailers to discuss ways of working
together and to help to develop the next phase
ofETI’s strategy.
WHSmith is also a member of the United Nations
Global Compact (“UNGC”) and this year has
participated in the Modern Slavery working group
with other retailers to discuss challenging topics and
how to work collaboratively to respond. The working
group also provided an opportunity to participate in
a peer review exercise of modern slavery statements,
supporting further development of our work in
this area.
Our due diligence processes seek to provide risk
control, mitigation and worker remedy where
needed. WHSmith’s Audit and Engagement team
conducts audits of our own-brand suppliers at least
every two years, assessing compliance with our
standards and grading suppliers as gold, silver, bronze
and unacceptable.
The team uses a risk-based audit approach for tier
two suppliers who manufacture major components
that are then used by our direct tier one suppliers
of finished products. We continue to work with our
supply chain to build capacity to improve standards.
We use a mix of announced and unannounced audits,
and a factory must be graded bronze or above if we
are to work with them.
Our ESG Committee reviews progress against our
responsible sourcing strategy annually, looking at our
audit and engagement programmes, emerging risks,
targets and performance.
The most frequent issues encountered include non-
conformances linked to health and safety compliance,
working hours and social insurance requirements, all
common problems in China where a large proportion
of our suppliers are based. We are working with ETI
and other retailers to look at ways of tackling these
systemic challenges.
To supplement the information we gain from supplier
audits, our team also spends a significant part of its
time engaging with suppliers on an ongoing basis
tobuild stronger and more transparent relationships.
The team’s engagement focuses on resolving specific
issues identified during audits and on delivering wider
projects to help suppliers deliver on key areas such
asworker representation or health and safety.
We have an independent hotline for workers to report
issues they are concerned about, which we then
investigate and follow up with supplier management
to ensure any complaints or suggestions are dealt
within the appropriate way. In addition, we conduct
an anonymous worker survey where workers can
provide feedback. Queries raised typically involve
queries about topics such as pay, accommodation
andrelations with other workers.
This year, we continued to make good progress
against our target to increase the number of suppliers
covered by our worker representation initiative.
The aim of this programme is to help suppliers to
develop fully functioning worker committees to
represent workers on any matter affecting their rights,
employment conditions or working environment
toresolve problems as they arise.
Of the 138* factories of suppliers who continue to
supply to WHSmith as at 31 August 2025, 20 per cent*
(2024: 19 per cent) of them have established worker
committees that have been operating for a year
or more.
Our due diligence processes for products that do not
carry our brand include an assessment of compliance
with our Responsible Sourcing Requirements.
All trade products are now risk assessed prior to
purchase on the basis of country of origin and type
ofproduct supplied.
Any higher risk products are further assessed
through a review of third-party audit reports
toensure compliance with our environmental and
social requirements.
We have also introduced a process at the supplier
onboarding stage to ensure that suppliers are
aware of, and can operate in accordance with,
ourResponsible Sourcing Requirements.
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Sustainability review continued
Aim Target Progress
Literacy Help children to develop
aloveofreading
By 2025: work with the National Literacy Trust to
provide a book to every child in the UK who does
notown one of their own.
The target was based on 2019 research by the National
Literacy Trust which suggested nearly 400,000
children in the UK did not own a book of their own.
Since then, WHSmith has donated over 600,000
books (or cash equivalents) to those most in need.
Supporting
charities and
local causes
Make a positive impact
through fundraising,
donationsandvolunteering
By 2025: increase the number of colleagues
involvedin supporting charities through
fundraisingand volunteering from a 2021 baseline.
Applications for support to the WHSmith Trust from
colleagues supporting charities through fundraising
and volunteering were 20 per cent higher than
in2021.
We engaged SLR Consulting to provide independent limited assurance covering components of the data marked with an asterisk (*) in accordance with assurance standard ISAE 3000.
Full details of the methodology and SLR Consulting’s assurance statement are available at whsmithplc.co.uk/sustainability
WHSmith has a long history of supporting charities,
local communities and other worthwhile causes
through a variety of initiatives. The Company
actively engages in fundraising, encourages its staff
to volunteer, and provides financial and in-kind
donations to make a positive difference in the areas
where we operate.
We regularly raise money for registered charities
through in-store fundraising and sales of cause-
related products. To support and encourage employee
involvement with charities, the WHSmith Group
Charitable Trust (the “WHSmith Trust”) matches funds
raised by colleagues for charities of their choosing
and provides financial donations to charities where
colleagues have chosen to volunteer.
This year, through our charity partnerships, colleague
and customer fundraising and in-kind donations
we have donated £1,059,000* to charities and other
good causes.
WHSmith has long been passionate about nurturing
a love of books among children, wanting them to
develop the reading and writing skills that help them
thrive in life.
Unfortunately, research shows that the number
of children and young people who say they enjoy
reading in their free time continues to decline.
We have been a long-term partner of the National
Literacy Trust who are working to try and reverse this
trend, and this year, we continued our support for
their Young Readers’ Programme, providing books
and other materials for schools in socio-economically
disadvantaged areas.
This was amplified by the WHSmith Trust which
provided a financial contribution towards the
programme. Over the past five years of our work
with them, we have donated the equivalent of
over 600,000 books, through book donations and
financial contributions.
Other literacy projects this year included participation
in World Book Day with almost 317,000 World Book
Day vouchers being redeemed in our stores. We ran
a programme in partnership with the WHSmith
Trust donating WHSmith vouchers to local schools
to exchange for books in our stores to increase
school library resources. We also ran a promotion in
conjunction with Puffin and the National Literacy
Trust to “Get Kids Reading with Diary of a Wimpy Kid”.
The promotion raised over £20,000.
In North America, we have a longstanding partnership
with a charity called Miracle Flights, which is a non-
profit organisation providing commercial flights
for children in need of life-saving medical care, not
available in their local hospitals. WHSmith North
America sells their toy bear mascot in stores and this
year raised over £226,000 for the work of the charity.
Our International team has also raised money and
provided product donations for local charities and
causes in the vicinity of our airport stores.
The full extent of our community investment
activity is outlined in our Sustainability Addendum
2025 and details of how we engage with charities
and other good causes are set out in our Code
ofBusiness Conduct.
Contributing to communities
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Sustainability review continued
Climate-related financial disclosures
Introduction
The Task Force on Climate-related Financial
Disclosures (“TCFD”) established a framework for
understanding and analysing climate-related risks
and opportunities. WHSmith recognises that climate
change presents a number of potential risks and
opportunities for our business. Our target is to be net
zero across our value chain by 2050.
In line with the requirements of UK Listing Rule
6.6.6R(8), our disclosure of climate-related financial
information is consistent with the Recommendations
of the TCFD, and its recommended disclosures and all-
sector guidance. Our approach to materiality for TCFD
reporting is the same as for other components of ESG
and is set out on page 43. Governance for climate
issues is aligned with wider ESG Governance controls
as shown on page 43.
Board oversight of climate risks
andopportunities
The Board has ultimate responsibility for ensuring
climate change is embedded into the Group’s
strategy, risk management, financial and business
planning processes. It monitors and oversees
progress against targets for climate-related issues.
Climate considerations are included in performance
monitoring and any decisions regarding major
financial approvals and acquisitions. The ESG, Audit
and Remuneration Committees of the Board provide
oversight of certain climate-related activities, and any
issues of material significance are discussed as they
occur. The work of the Committees is detailed on
pages 89 to 98.
The Audit Committee has responsibility for ensuring
that the Group has identified climate risks and
opportunities, that those risks and opportunities
have been adequately assessed, and that appropriate
risk management, monitoring and mitigation
plans are in place. The Committee also oversees the
Group’s wider obligations in relation to non-financial
reporting. Climate-related matters are incorporated
into quarterly updates from the Group Audit and Risk
Director where significant, as part of the Group’s wider
risk management processes.
TCFD recommendations and recommendeddisclosures
Disclosure
location
Governance
(a) Describe the Board’s oversight of climate-related risks and opportunities Page 52
(b) Describe management’s role in assessing and managing climate-related risks and opportunities Page 53
Strategy
(a) Describe the climate-related risks and opportunities the organisation has identified over the
short, medium and long term
Pages 55
and 56
(b) Describe the impact of climate-related risks and opportunities on the organisation’s businesses,
strategy and financial planning
Pages 54
to 56
(c) Describe the resilience of the organisation’s strategy, taking into consideration different
climate-related scenarios, including a 2°C or lowerscenario
Pages 54
to 56
Risk management
(a) Describe the organisation’s processes for identifying and assessing climate-related risks Page 53
(b) Describe the organisation’s processes for managing climate-related risks
Pages 55
to 57
(c) Describe how processes for identifying, assessing and managing climate-related risks are
integrated into the organisation’s overall risk management
Pages 56
and 57
Metrics and targets
(a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities
inline with its strategy and risk management process
Page 58
(b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (“GHG”) emissions,
andtherelated risks
Pages 60
and 61
(c) Describe the targets used by the organisation to manage climate-related risks and
opportunitiesand performance against targets
Page 62
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Sustainability review continued
Management’s role
The Group Chief Executive has the delegated
authority from the Board to manage WHSmith’s
actions in relation to the Company’s strategy and
climate change. He is assisted by a number of senior
managers in the assessment and management
ofclimate-related matters.
• The Group Sustainability Director supports the
Group Chief Executive in progressing WHSmith’s
net zero transition strategy, including developing
climate scenarios, identifying climate risks and
opportunities, developing transition plans and
embedding them into business activities, and
ensuring progress is appropriately monitored.
She isresponsible for updating the Board and
the ESG Committee on climate-related matters,
including a review of progress against the Group’s
targets, at least three times a year.
• The Managing Directors of each business division
identify, monitor, manage and mitigate climate
risks and opportunities associated with their
activities, principally through the established risk
management framework which ensures integration
between different business functions. They are also
responsible for ensuring the delivery of plans to
reduce emissions and capitalise on carbon-related
opportunities within their businesses.
• The Group CFO is responsible for monitoring the
effective application of the Group’s processes for
managing climate risks. He is also responsible for
providing assurance over financial information and
climate-related disclosures.
There are a number of governance bodies and
reporting processes to ensure management is
informed about climate-related issues. The ESG
Steering Group has responsibility for leading the
delivery of carbon commitments, meeting once
every other month to review progress against targets.
Minutes of these meetings provide the basis for
a report to each meeting of the ESG Committee.
The Business Risk Committees are responsible
for identifying and assessing climate risks and
opportunities and ensuring appropriate due diligence
and mitigation. They meet once per quarter and
provide input to the Group risk report to the Audit
Committee four times per year.
Identifying and assessing risks
andopportunities
Our framework for identifying and assessing climate-
related risks is integrated into Group-wide processes
for risk identification and prioritisation (see pages 65
to 70). We use the following processes to identify and
assess transition and physical risks and opportunities:
• monitoring of changes in the external
policy environment, including existing and
emerging legislation;
• observing market developments, such as
technological advances that may reduce our
operating costs, or changes in consumer behaviour
that may impact sales of particular products or
customer footfall in certain locations; and
• evaluating changes in our cost base related
toproperties, logistics or supply of goods that may
be linked to climate-related impacts.
We maintain a register of climate risks and
opportunities, across short, medium and long-term
time horizons. These time horizons are defined
as follows:
• Short-term – up to three years: we develop financial
plans and use them to manage expectations and
performance on a three-year cycle. We assess the
Group’s viability under the requirements of the
UK Corporate Governance Code over a three-year
period and our financial plans incorporate any
decarbonisation measures required to meet our
near-term targets and address short-term risks.
• Medium-term – three to ten years: many of our
financial commitments, such as contractual
agreements with landlord partners, and the useful
economic life of our assets often exceed three
years. Medium-term climate risks are considered
in all investment decisions involving longer-term
commitments and many of our climate-related
opportunities are often materialised within this time.
• Long-term – beyond ten years: it is expected that the
product mix in our stores could look very different to
the current offering, addressing the societal changes
that will come with transitioning to a net zero world.
This timescale is beyond our financial planning and
investment period horizons, but we recognise that
longer-term risks may need to be incorporated into
our future business strategy and planning.
Climate-related risks and opportunities are assessed
in relation to the severity of potential business impact
(on a scale from one to six) and the likelihood of the
business being impacted (low, medium or high).
This scoring is in line with all other risks included in the
Company’s risk register. Determination of the severity
of impact includes both financial and reputational
components, and other factors such as our ability to
respond to a particular risk. In assessing the likelihood,
we consider factors such as whether similar risks have
materialised in the past and our ability to mitigate
the risk. This allows us to identify the more significant
potential risks for further financial assessment and
incorporation into the risk registers and summary risk
maps prepared by all business functions.
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Sustainability review continued
We consider environment and social sustainability,
which includes climate-related issues, to be a principal
risk based on the potential financial impact on our
business and stakeholder expectations that we will
conduct our business in a responsible and sustainable
way. Failing to deliver our sustainability agenda could
damage our reputation, introduce higher costs and
impact our ability to meet our strategic objectives.
Scenario analysis
This year, in order to update and re-evaluate our
assessment of climate risk and opportunities, we
commissioned a third-party consultancy to help
us understand how our business could be affected
under three different climate scenarios, over short,
medium and long-term horizons. The work was a
refresh of analysis that was first undertaken in 2022,
and incorporated changes that have taken place since
then, including the sale of our High Street and Funky
Pigeon businesses. Data from leading climate science
and policy bodies such as the Network for Greening
the Financial System (“NGFS”), the International
Energy Agency (“IEA”) and the Intergovernmental
Panel on Climate Change (“IPCC”) were used to
support our analysis and the development of the
scenario narratives.
Current policies scenario
This scenario assumes only currently
implemented government policies are preserved.
There is no reduction in emissions and climate
change accelerates to 2.5°C of warming by 2050 and
more than 4°C by 2100, bringing irreversible change.
This scenario provides an indication of potential
outcomes under business as usual. It is linked to the
IPPC Representative Concentration Pathway (“RCP”)
8.5 scenario, involving little to no transition risks in the
early stages (as no additional action is being taken),
but results in irreversible and disruptive physical risks.
Delayed transition scenario
This scenario follows a path in which social, economic
and technological trends do not shift markedly
from historical patterns, but the world attempts
increased action to limit emission growth around
2030 and beyond. There is a failure to cut emissions
in the short term, and the Paris agreement goals
are not met, resulting in more than 2°C of warming
by 2050. This scenario is linked to the IPCC RCP4.5
scenario, involving several physical and transition risks
after 2030.
Net zero 2050 scenario
This is an ambitious scenario that limits global
warming to 1.5°C by 2100 through stringent policy
intervention and innovation, reaching net zero
emissions around 2050. It offers an indication of
potential outcomes where global warming is limited
to current internationally agreed levels. It is broadly
in line with the IPCC RCP2.6 scenario, involves more
transition risks in the early stages and physical risks are
less extreme than under the other scenarios.
Climate risks and opportunities and their
impact on our business
The analysis has helped to estimate indicative
financial impacts from different climate risks under
the three scenarios. The table on pages 55 and
56 sets out the most significant climate risks and
opportunities for WHSmith, the potential impacts
they may have on our business and our resilience to
respond. We have assessed transition risks associated
with societal changes in policies, technologies,
markets and stakeholder expectations; and physical
risks arising from acute climate-related weather
events, or longer-term chronic changes to the climate.
Opportunities from mitigation and adaptation to
climate change are also included.
The impacts detailed in the table on pages 55 and
56 are stated prior to mitigation or controls being
inplace and are subject to uncertainties attributed
to the underlying scenario models, impact pathways
and assumptions made. They assume that our
core business activities remain largely unchanged
throughout the defined time horizons, and any
increases in costs are fully absorbed by WHSmith.
The financial impacts quoted are not forecasts but
are based on the outputs from modelling derived
from different data inputs and plausible modelled
scenarios. These are indicative estimates and are
subject to a wide range of uncertainties.
The financial implications of the risks and
opportunities identified are considered within the
Group’s financial planning processes. The modelling
undertaken to date has determined that the financial
impacts are not expected to be significant within our
short-term forecast period.
Over the medium and longer term, the results of
the scenario analysis have been considered in the
assessment of viability and goodwill impairment,
where appropriate, but are not considered to be
material. We will continue to keep this assessment
under review.
The results of our scenario analysis do not currently
identify any significant impact on our business model
over the time horizons assessed, and, therefore,
nofurther changes in strategy are required, beyond
our current activities to decarbonise our business
inline with limiting global temperature rises to 1.5°C.
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Sustainability review continued
Summary of climate-related risk and opportunities
Potential financial impact
1
Climate risk/opportunity and business impact
Short
term
Medium
term
Long
term Business resilience and strategic response
Rising climate policy-driven costs (policy, legal and market risk)
Increasingly stringent climate policies, including rising carbon taxes
and new pricing schemes, could raise operational energy costs and
the cost of purchased goods and logistics by adding levies onto the
cost of energy and fuel. Modelling assumes growth in line with NGFS
figures and that the full costs of price increases are passed on to
WHSmith by its suppliers.
Key financial impact: increased operational expenditure resulting
from rising prices for electricity, logistics and the cost of goods.
Geographies affected: global retail, purchasing and
distribution operations.
Current policies
We closely monitor any changes in legislation, taxation policies and
market dynamics. Our procurement team seek to minimise the price
we pay for electricity and we have a balanced energy purchasing
strategy to mitigate price volatility. We continue to reduce energy
consumption and switch to low carbon alternatives wherever feasible.
Future cost projections for energy and fuel are included in our financial
plans and any rises in the cost of trade goods would be partly passed
ondown the value chain.
Metrics used: electricity, gas and fuel consumption (page 59);
costofgoods and energy and fuel pricing (not disclosed).
Delayed transition
Net zero 2050
Travel demand shift (policy, legal and market risk)
A shift in air travel patterns driven by carbon levies and the growth
of lower emission alternatives (e.g. rail) could reduce air passenger
volumes, leading to lower sales and profitability in airport stores.
Key financial impact: reduced income from lower air
passenger numbers.
Geographies affected: global retail operations.
At present, there is
insufficient data for
predicted passenger
numbers under the
different climate
scenarios to be able
to model potential
financial impacts with
any certainty.
Our business is spread across the world with stores in many countries,
which mitigates the risk associated with any national or regional policy
responses to curb emissions from air travel. We will continue to engage
with policy makers and others in the aviation and rail sectors to ensure
any future potential impacts from climate policy are fully understood.
Metrics used: passenger number forecasts (page 12).
Commodity supply disruptions (acute and chronic physical risk)
Climate change is likely to result in acute and chronic changes in
precipitation patterns with some regions experiencing droughts
and others greater rainfall. These changes could affect the supply
and availability of raw materials for some product categories such
as food and drink, with a resulting increase in the cost of supply.
Figures quoted are for impacts on food lines only.
Key financial impact: higher cost of goods sold as raw material
prices rise.
Geographies affected: global purchasing operations.
Current policies
We sell a broad range of products, which means that even if certain
categories are impacted by supply chain challenges, revenues can be
maintained through sales of other product categories. We will continue
to evaluate our product offering in the context of medium and long-
term climate change and the impacts that this could have on different
raw materials in our supply chain, and, if necessary, adapt our ranges
as appropriate. Some of the increase in costs of raw materials will be
passed down the supply chain, mitigating the business impact.
Metrics used: cost of sales (page 164; Scope 3 emissions (page 61).
Delayed transition
Net zero 2050
1 Potential financial impact determined by impact on annual margin prior to any mitigation activity. Rangeshave been chosen to align
with our other accounting processes. There have been no identified impacts on investment in research and development, acquisitions
ordivestments or access to capital
<£10m £10–30m >£30m
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Sustainability review continued
Potential financial impact
1
Climate risk/opportunity and business impact
Short
term
Medium
term
Long
term Business resilience and strategic response
Airport disruptions and rising insurance premiums (acutephysical risk)
More frequent and severe extreme weather events, such as flooding,
could disrupt airport and rail operations, leading to temporary store
closures, reduced trading hours, and lost sales. Rising insurance
premiums associated with these risks would further add to
operating costs.
Key financial impacts: decline in income from stores in disrupted
locations and operational costs from higher insurance premiums.
Geographies affected: global retail operations.
Current policies
Our stock is held across many sites, including distribution centres,
supplier sites and in our stores. The impact of a flood event would
therefore be limited. We have a diverse product range with limited
ranges of fast-moving goods, and therefore the majority of our
logistics operations are resilient to any short-term impacts from major
weather events.
Metrics used: insurance costs (not disclosed).
Delayed transition
Net zero 2050
Low-carbon product growth (products and services opportunity)
Growing customer preference for lower-carbon products presents
anopportunity to increase sales in more sustainable product lines.
Key financial impact: increased revenues from expanding
sustainable ranges.
Geographies affected: global retail operations.
Current policies
Our commercial teams are constantly assessing consumer trends
and the potential for new products and can quickly adapt to any
developments in the marketplace to capitalise on new opportunities.
For example, in response to a warmer climate, we are ensuring our
ranges of travel products are meeting the needs of travellers.
Metrics used: sales revenues from products designed for a lower-carbon
economy (not disclosed).
Delayed transition
Net zero 2050
1 Potential financial impact determined by impact on annual margin prior to any mitigation activity. Rangeshave been chosen to align
with our other accounting processes. There have been no identified impacts on investment in research and development, acquisitions
ordivestments or access to capital
<£10m £10–30m >£30m
Managing climate risks
andopportunities
Climate risks are managed in line with our overall
risk appetite to ensure appropriate responses
are in place for those risks. These responses may
include accepting a risk without any further action,
mitigating or reducing the risk with appropriate
controls, transferring the risk, for example to insurance
providers, or stopping or modifying the activity that
gives rise to the risk. The decision as to which response
is appropriate depends on a number of factors,
including the nature of the risk in terms of impact
and likelihood, the level of resource that would be
required for different responses, the time frame over
which a risk is likely to materialise and the extent to
which the risk level could be reduced by a response.
An integrated approach ensures we manage climate
risks within our overall risk appetite over different
time horizons.
In addition to the strategic responses in the table,
other processes for managing climate risks and
opportunities are undertaken at Group, business
function and individual property level, and include:
• A Group-wide policy framework, which includes our
Environment Policy, Code of Business Conduct and
Responsible Sourcing Requirements for Suppliers;
• Monitoring of key metrics including energy and fuel
consumption and pricing, cost of sales, consumer
trend data and sales information;
• Operational procedures covering, for example,
processes relating to energy and fuel management;
• Emergency response plans, for example, for flood
management or for disruption to supply networks;
• Internal audit and investigation; and
• Annual attestation processes by senior managers
of business functions, joint ventures and
franchise partners.
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Sustainability review continued
Senior management and the Board undertake regular
reviews of risk and opportunities relating to climate
change to ensure that any emerging issues that might
impact our strategy are appropriately identified and
evaluated. Significant climate-related issues form
part of risk reports to the Audit Committee. The ESG
Committee evaluates the annual update of the climate
risk and opportunity register and ensures appropriate
responses are in place. This includes any significant
update to our understanding and assessment of
climate-related risks and opportunities, such as where
there have been major changes to the Company
and/or changes in scenario data and assumptions.
At an operational level, each business division reviews
its risk profile and risk responses throughout the
year to ensure climate risks and opportunities are
managed effectively.
Our climate risk management processes follow the
overall approach for Group-wide risk management.
Climate risks are integrated into budgetary decisions
regarding spend on equipment or logistics.
Climate risks and opportunities are considered from
a strategic and operational perspective to ensure
we maintain a comprehensive view of potential
climate-related impacts over different time horizons.
Senior management and the Board regularly review
climate risks and opportunities in line with other
risks, to ensure a holistic view and that risk mitigation
responses are appropriate to risk materiality and are
properly integrated into relevant business activities.
Climate strategy
The Group’s strategy incorporates the delivery
ofoursustainability plans as a key enabler, including
minimising our impact on the environment and
decarbonising our activities (page 14). We recognise
that transitioning to a net zero business is the best
way of mitigating climate risk and capitalising on any
climate-related opportunities. Our target is to become
a net zero emissions business by 2050. Our intention
is to reduce Scope 1, 2 and 3 emissions by at least
90 per cent by 2050 (from a 2020 baseline) before
neutralising any residual emissions.
As a first step to this long-term goal, we have set near-
term targets to help track our performance against
our long-term climate target. The following targets
were developed using the Science Based Target
initiative’s (“SBTi’s”) Criteria and Recommendations
for Near-Term Targets, Version 5.0 and have been
validated by SBTi.
• We will reduce absolute Scope 1 and 2 GHG
emissions by 80 per cent by 2030 from a 2020 base
year; and
• 75 per cent of our suppliers (by emissions) covering
purchased goods and services and upstream
transport and distribution services will have science-
based targets in place by 2027.
Our carbon transition strategy focuses on a number
ofkey actions:
• continuing to reduce our electricity and gas
consumption through increased energy efficiency
and investment in more efficient heating, lighting
and cooling. Key projects include centralised
remote management of air conditioning and
ventilation; replacement refrigerators, rollout of half
hourly automatic meter reading and upgrading
LED lighting.
• continuing to invest in renewable electricity
fordirect and indirect power purchases.
• reducing our dependence on fossil fuels
fortransport and logistics.
• enhancing supplier engagement across all Business
Divisions to ensure our supply chain is adequately
disclosing carbon emissions and setting targets
toreduce them.
• working with landlord and franchise partners to look
at opportunities to collaborate to reduce emissions.
• reducing carbon emissions from packaging.
• working with others in the retail sector to encourage
other stakeholders such as governments and
policy makers to make more rapid and larger scale
interventions towards net zero. We were a founding
member of the British Retail Consortium’s Climate
Action Roadmap, which was established to bring
together retailers, suppliers, policy makers and other
stakeholders, and to support customers to deliver
the UK retail industry’s ambition for net zero.
Metrics and performance
againsttargets
We use a number of different metrics to measure
ourclimate-related impacts, evaluate progress against
our targets and monitor risks and opportunities.
They have been developed with consideration
ofthe cross-industry metrics described in the
TCFD implementation guidance table A2.1, where
we consider these to be material to our business.
Key metrics used to measure and manage climate risk
and opportunities are listed below and included in the
table on pages 55 and 56.
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Sustainability review continued
Metrics for managing climate risk (continuing business)
Metric Link to risk Units 2025 2024 2023
Electricity and gas
consumption
Increased costs
for energy and fuel
MWh 44,661
*
43,560 44,352
Fuel consumption Increased costs
for energy and fuel
millions of litres 1.3
*
1.2 1.1
Electricity from
renewable sources
Increased costs
for energy and fuel
andincreased costs
for meeting net
zerotargets
MWh 41,128
*
39,820 21,962
Absolute Scope 1
emissions
Increased costs
for meeting
net zero targets
tonnes CO
2
e 86
*
34 43
Absolute Scope 2
emissions
Increased costs
for meeting
net zero target
tonnes CO
2
e 1,468
*
1,809 9,336
Absolute Scope 3
emissions
Increased costs
of raw materials
tonnes CO
2
e 383,502 375,807 326,117
Other climate-related metrics
Metric Link to risk Units 2025 2024 2023
GHG Scope 1 and 2
emissions intensity
Industry benchmark tonnes CO
2
e/£m
revenue
1.0
*
1.3 7.1
GHG Scope 1 and 2
emissions intensity
Industry benchmark tonnes CO
2
e/million
square foot
1,063
*
1,297 7,117
We engaged SLR Consulting to provide independent limited assurance covering components of the data marked with an
asterisk (*) in accordance with assurance standard ISAE 3000. Full details of the methodology and SLR Consulting’s assurance
statement are available at whsmithplc.co.uk/sustainability
Executive remuneration: Climate-related performance indicators have formed part of executive incentive plans
(see Directors’ remuneration report on pages 96 to 119).
Carbon pricing: The main carbon taxes affecting our business are the UK Climate Change Levy, which is included
in the cost of electricity and gas used to power our buildings and the UK Fuel Duty, which is included in the cost of
diesel and petrol used for the distribution of our goods. These carbon taxes are part of energy and fuel costs, which
we monitor on an ongoing basis. We have also included carbon pricing in our scenario analysis, using projections
from models by the IEA and the NGFS.
External benchmarks: We monitor performance on climate change in external benchmarks, including the CDP
Climate Change disclosure initiative.
Energy and fuel consumption
We use energy to light, heat and cool our premises.
We have been working for many years to reduce the
amount of energy we use, recognising opportunities
to reduce our overall GHG emissions and operating
costs for the business.
Energy consumption in 2025 for our continuing
business was 44,661* MWh (2024:43,560) a slight rise
of two per cent. We are continuing with a range of
energy reduction measures to minimise the amount
of energy that we use.
These include:
• further development of our building management
system to monitor energy consumption across
stores and adjustment of energy settings for lighting,
heating and air conditioning to minimise energy;
• replacement of LED lights coming to the end
oftheir life, with new, more energy-efficient ones;
and
• the use of fridges with doors that prevent cold
airlosses, increasing energy efficiency.
Our fuel consumption for transport in 2025 was
1.3 million* litres (2024: 1.2 million), with the slight
increase due to activity to separate the networks
for each business, including relocating stock to the
correct distribution centre and picking location,
aswell as rationalising our distribution centres and
transport hubs.
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Energy consumption (continuing business)
Metric 2025 2024 2023
Energy use (buildings) MWh
UK 21,039
*
21,131 22,194
Non-UK 23,622
*
22,429 22,158
Total 44,661
*
43,560 44,352
Energy use (buildings) MWh
Gas 469
*
187 232
Grid electric (renewable) 41,128
*
39,820 21,962
Grid electric (non-renewable) 3,064
*
3,553 22,158
Total 44,661
*
43,560 44,352
Fuel use for transport (million litres) 1.3
*
1.2 1.1
Energy consumption (discontinued business)
Metric 2025 2024 2023
Energy use (buildings) MWh
Gas 6,552
*
7,307 9,416
Grid electric (renewable) 21,274
*
26,678 30,139
Grid electric (non-renewable) 0
*
0 0
Total (all UK) 27,826
*
33,984 39,556
Fuel use for transport (million litres) 0.5
*
0.5 0.6
Energy use is calculated from metered billing data for electricity and gas supplied directly to WHSmith under half-hourly billing data. Non-half-hourly data is extrapolated using floor areas
and numbers of stores. We engaged SLR Consulting to provide independent limited assurance covering components of the data marked with an asterisk (*) in accordance with assurance
standards ISAE 3000 and3410. Further data and full details of the scope and methodology for reporting energy, fuel use and carbon emissions and SLR Consulting’s full assurance statement
is available at whsmithplc.co.uk/sustainability
Sustainability review continued
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Sustainability review continued
Scope 1, Scope 2 and Scope 3 GHG emissions, and related risks
Global Scope 1 and 2 emissions (tonnes CO
2
e) (continuing business)
Metric 2025 2024 2023
Scope 1 emissions from purchased natural gas 86
*
34 43
Percentage of emissions from UK-based operations 100% 100% 100%
Scope 2 emissions (market based) from purchased electricity 1,468
*
1,809 9,336
Percentage of emissions from UK-based operations 0%
*
0% 0%
Total Scope 1 and 2 emissions (market based) 1,554
*
1,843 9,379
Percentage of emissions from UK-based operations 5.5%
*
1.9% 0.5%
Market based carbon intensity metric (tonnes CO
2
e per £m revenue) 1.0
*
1.3 7.1
Market based carbon intensity metric (tonnes CO
2
e per million square foot floorspace) 1,063
*
1,297 7,117
Scope 2 emissions (location based) from purchased electricity 11,666
*
12,425 13,120
Scope 1 and 2 emissions (tonnes CO
2
e) (discontinued business)
Metric 2025 2024 2023
Scope 1 emissions from purchased natural gas 1,199
*
1,336 1,723
Percentage of emissions from UK-based operations 100%
*
100% 100%
Scope 2 emissions (market based) from purchased electricity 0
*
0 0
Percentage of emissions from UK-based operations 0% 0% 0%
Total Scope 1 and 2 emissions (market based) 1,199
*
1,336 1,723
Percentage of emissions from UK-based operations 100%
*
100% 100%
Market based carbon intensity metric (tonnes CO
2
e per £m revenue) 3.3
*
3.0 3.7
Market based carbon intensity metric (tonnes CO
2
e per million square foot floorspace) 415
*
463 532
Scope 2 emissions (location based) from purchased electricity 3,765
*
5,524 6,241
Emissions have been calculated using the methodology defined in the GHG Protocol Corporate Standard. We use the market based method for Scope 2 for our total emissions to account
forpurchasing of low-carbon electricity. Our reporting boundary includes our operations in the UK and our directly run international businesses where we have operational control, consistent
with those included in our consolidated financial statements. Our reported Scope 1 and 2 emissions include all UK and international properties, both owned and leased, over which we have
operational control. We engaged SLR Consulting to provide independent limited assurance covering components of the data marked with an asterisk (*) in accordance with assurance
standards ISAE 3000 and3410. Further data and full details of the scope and methodology for reporting energy, fuel use and carbon emissions and SLR Consulting’s full assurance statement
is available at whsmithplc.co.uk/sustainability
60 WH Smith PLC Annual Report and Accounts 2025
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Sustainability review continued
Our total Scope 1 and 2 market based emissions
decreased this year to 1,554* tonnes CO
2
e (2024: 1,843),
as a result of switching more of the electricity used
to run our stores in Europe and North America to
renewable sources.
Emissions reductions were also made through
investments in more efficient lighting, control systems
and refrigeration.
One hundred per cent of the electricity for buildings
in the UK, Europe and the USA is renewably sourced.
Where we procure direct from energy suppliers,
electricity is purchased through green tariffs. Some of
the electricity provided by our landlord partners is
from renewable sources, and we purchase renewable
electricity certificates for any non-renewable electricity
provided by landlord partners. All certificates are retired
on our behalf to avoid double-counting.
Emissions from our UK operations were 86* tonnes
CO
2
e (2024: 34). These residual emissions arise from
the combustion of natural gas and, to date, we
have been unable to remove them completely as
alternative technologies appropriate for our buildings
do not yet exist. As the technology and nature of our
operations evolve, we expect to be able to reduce
emissions from these activities.
Global Scope 3 emissions (tonnes CO
2
e) (continuing business)
Scope 3 category 2025 2024 2023
1. Purchased goods and services and capital goods
and services
326,000 282,300 248,000
2. Capital goods and services Included in our purchased goods and services category.
3. Fuel and energy-related activities 2,100
*
3,100 4,200
4. Upstream transport and distribution 11,700 11,800 10,200
5. Waste generated in operations 2 7 17
6. Business travel 1,400
*
1,500 1,300
7. Employee commuting 11,100 11,000 10,700
8. Upstream leased assets Included in Scope 1 and 2 as in our operational control.
9. Downstream transport and distribution Not relevant for our business.
10. Processing of sold products Not relevant for our business.
11. Use of sold products 13,500 49,000 36,800
12. End-of-life treatment of sold product 14,000 11,700 9,500
13. Downstream leased assets Not relevant for our business.
14. Franchises 3,700 5,400 5,400
15. Investments Not relevant for our business.
Total Scope 3 emissions 383,502 375,807 326,117
Global Scope 3 emissions (tonnes CO
2
e) (discontinued business)
Total Scope 3 emissions 145,016 137,223 142,303
Scope 3 emissions have been calculated in accordance with the Greenhouse Gas Protocol Corporate Value Chain (Scope
3) Accounting and Reporting Standard. Our reporting boundary includes our operations in the UK and our directly run
international businesses where we have operational control, consistent with those included in our consolidated financial
statements. We engaged SLR Consulting to provide independent limited assurance covering components of the data
marked with an asterisk (*) in accordance with assurance standardsISAE 3000 and 3410. Further data and full details of the
scope and methodology for reporting emissions and SLR Consulting’s full assurance statement are available at whsmithplc.
co.uk/sustainability
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Sustainability review continued
The majority of our Scope 3 emissions are from
Category 1 (purchased goods and services) which
increased this year as our cost of purchased goods
increased. As a first step towards our target for 75 per
cent of suppliers to have science-based targets in place,
we have started to engage with our largest suppliers.
Those with science-based targets in place now
represent 53* per cent of Category 1, 2 and 4 emissions.
We are working with our transport and logistics
operators to reduce Category 4 emissions and have
minimised fuel consumption through better route
planning and optimisation of delivery schedules,
drivertraining and vehicle telematics.
Category 11 emissions (use of sold products) have
decreased this year due to an improvement in
the methodology, which has enabled us to more
accurately calculate use phase emissions for sales
ofour electronic and electrical travel accessories.
Progress against targets
Target 2020 baseline 2025 Progress
Reduce Scope 1 and 2 GHG emissions by80%by 2030 14,305 tonnes
CO
2
e
1,554
*
tonnes
CO
2
e
89%
*
reduction
75% of supply chain emissions to be covered by
science-based targets by 2027
Unknown 53%
*
of emissions
are covered by
science-based
targets
All forestry materials will be from recycled or certified
sources in WHSmith-brandedproducts
99% 100%
*
Met or on track to meet target
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Sustainability review continued
Non-financial and sustainability information statement
In accordance with the requirements of section 414CA and 414CB of the Companies Act 2006, the table below sets out where stakeholders can find information relating
to non-financial and sustainability matters in our Annual Report and Accounts. In addition, the Sustainability Addendum 2025 and the Policies and Position Statements
section of our website contain a wide range of information on environmental and social matters. Due diligence arrangements for each topic, including training, monitoring
and auditing of policy compliance are included in the respective policy documentation on our website.
Disclosure requirements Policies, guidance and standards which govern our approach Where to find more information Pages
Environmental matters Environmental Policy – sets out our approach to protecting the environment.
Biodiversity Policy and Animal Welfare Policy – sets out our approach to sourcing
ourproducts responsibly.
Responsible Sourcing Requirements – sets out the minimum standards we expect
fromour suppliers.
Section 172(1) statement
Sustainability review
Principal risks and uncertainties
Corporate governance report
40
46
70
80 and 92 to 93
Colleagues Code of Business Conduct – sets out the standards expected of all colleagues and
includes procedures for whistleblowing, managing conflicts of interest, complying
withcompetition law and receipt of gifts.
Health and Safety Policy – describes how we manage safety and our commitment
toprotecting colleagues and customers.
Bullying and Harassment Policy – sets out measures to prevent bullying
and harassment.
Diversity, Equity and Inclusion policy – sets out our commitment to encouraging
diversity,equity and inclusion.
Data Privacy, Data Retention and Privacy Policies – protecting colleagues’ privacy
and data in accordance with national and international regulations.
Section 172(1) statement
Sustainability review
Corporate governance report
Directors’ remuneration report
36
47 and 48
80 and 81, 92 and 93
96 to 119
Social matters Code of Business Conduct – sets out our business standards for responsible retailing,
meeting sanctions and trade controls, quality control and product safety. It also sets
outour business principles for engaging with stakeholders, including customers,
suppliersand business partners and local communities.
Section 172(1) statement
Sustainability review
Principal risks and uncertainties
34 to 41
44
66 to 70
Respect for human
rights
Human Rights Policy – sets out how we respect and support the dignity, wellbeing
andhuman rights of everyone associated with our Company.
Responsible Sourcing Requirements – sets out the minimum standards we expect from
our suppliers in relation to protecting the human rights of workers in our supply chain.
Section 172(1) statement
Sustainability review
Principal risks and uncertainties
34 to 41
49 and 50
68
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Sustainability review continued
Disclosure requirements Policies, guidance and standards which govern our approach Where to find more information Pages
Anti-corruption, anti-
bribery and prevention
of facilitation of tax
evasion matters
Code of Business Conduct – includes our expectations for business and colleague
responsibilities for these matters.
Sustainability review
Principal risks and uncertainties
Corporate governance report
44
67
83
How we manage risk Schedule of matters reserved for the Board
Audit Committee terms of reference
Corporate governance report
Principal risks and uncertainties
88 and 89
65
Business model Schedule of matters reserved for the Board Business model 8 and 9
Non-financial key
performance measures
Key performance indicators –
non-financial
Sustainability review
17
42 to 64
Climate-related
financialdisclosures
Sustainability review
Principal risks and uncertainties
Corporate governance report
Notes to the financial statements
52 to 62
70
80, 92 and 93
144
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Principal risks and uncertainties
Identify
Risk registers
compiled by
each business
function/Risk
mapping to identify
emerging issues
Assess
Determining
the likelihood of
risk occurrence/
Evaluating the
potential impact
Mitigate
Agreeing actions
to manage the
identified risks/
Ensuring control
measures are
in place
Monitor
Reviewing the
effectiveness
of controls/
Maintaining
continued oversight
and tracking
Risk management framework
Our risk management framework is designed
so that material business risks throughout the
Group can be identified, assessed and effectively
managed. This framework incorporates the following
core elements:
Risk monitoring responsibilities
Board and Audit Committee
Overall responsibility for risk management oversight
rests with the Board, exercised through the delegated
monitoring by the Audit Committee. Day-to-day
management of risk is embedded within the business
through a layered approach, as summarised below.
Business Risk Committees
andExecutive Management
Formal Risk Committees are held on a quarterly basis
within each Business Operating Division, comprising
members of each Divisional Executive team and
Senior Management, the CFO and Group Risk and
Audit Director. These Business Risk Committees
act as a forum to review the updated risk registers
and reports on ongoing risk monitoring activity
undertaken by Internal Audit and other corporate
oversight functions. All principal business functions
compile risk registers to identify key risks, assess
them in terms of their likelihood and potential
impact, and determine appropriate control strategies
tomitigate the impact of these risks, taking account
ofrisk appetite.
Operational Audit, Loss Prevention
andSecond Line Oversight Functions
These functions help to monitor compliance
with internal control procedures across stores,
distribution centres and other areas of the business,
encompassing our ongoing programme of store
audits and stocktaking results, and help to identify
and monitor further areas of emerging risks.
Internal Audit
The Audit function facilitates the ongoing update
ofcorporate and business function risk registers,
andconducts an independent programme of activity
in order to evaluate and test the working of internal
controls in relation to the Group’s systems and
processes. The results of this ongoing programme
areshared with the Business Risk Committees and
theGroup Audit Committee.
Annual review of the effectiveness
of internal control
In August 2025, the Group announced to the market
an identified overstatement of Headline trading profit,
primarily related to the acceleration of supplier income
recognition within the North American division.
The Board recognises the issue and the material
weaknesses identified and remains committed
totheongoing development of risk management
andthe internal control framework across the business.
As a result:
• The Group engaged Deloitte to conduct
anindependent review of the circumstances
surrounding the overstatement. The outcome
of the Review have been used to define
aremediation plan.
• The Group is partnering with an external firm to
accelerate workstreams already underway aspart
of Provision 29 readiness and has commenced
a Finance Transformation programme.
Both programmes focus on strengthening key
financial and other foundational controls across
the business.
The Board will continue to monitor and review
the effectiveness of material controls and report
in line with the requirements of the UK Corporate
Governance Code Provision 29. The Group has
engaged Deloitte to provide independent assurance
over their Provision 29 approach.
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Principal risks and uncertainties continued
Board review of principal risks
anduncertainties
Principal risks are described on the following pages,
along with explanations of how they are managed
and mitigated. The Group recognises that the profile
of risks constantly changes and additional risks not
presently known, or that may be currently deemed
immaterial, may also impact the Group’s business
objectives and performance. Our risk management
framework is therefore designed to manage rather
than eliminate the risk of failure to achieve business
objectives, and, as such, can only provide reasonable
and not absolute assurance against these principal
uncertainties impacting on business performance.
Changes in principal risks
comparedto last year
The table which follows summarises the principal
risks and uncertainties agreed by the Board. The table
incorporates further information relating to the
movement in the level of these risk exposures during
the year, to highlight whether, in our view, exposure
toeach of the principal risks is increasing, decreasing
or remains broadly the same.
Ongoing global conflicts
WHSmith has no direct operations in countries
impacted by the current ongoing global conflicts.
The business could however be significantly impacted
by any further potential escalation of these conflicts
orwider geopolitical threats.
Emerging risks
Our risks will continue to evolve in response to future
events and new challenges, where further emerging
risks may develop that could materially impact
the business in the future. Our Risk Forums and
Monitoring Framework seek to identify such potential
changes in our risk landscape.
Change in risk level
Higher No change Lower
Principal risks/explanation Mitigation Change
Treasury, financial and credit risk management
• The Group’s exposure to and management
ofcapital, liquidity, credit, interest rate and foreign
currency risk are analysed further in Note 1 of the
financial statements.
• The Group also has credit risk in relation
toitstrade, 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’s Treasury function seeks to reduce exposures to interest rates, foreign exchange
and other financial risks, to ensure sufficient liquidity is available to meet foreseeable needs
and to invest cash assets safely and profitably.
• The Group does not engage in speculative trading in financial instruments and transacts
onlyin relation to underlying business requirements. The value of any deposit that can be
placed with any approved counterparty is based on short-term and long-term credit ratings
and, in accordance with the Group’s treasury policy, it is limited to a maximum of £75m for
each approved counterparty.
• The Group’s Treasury policies and procedures are periodically reviewed and approved by
theAudit Committee and are subject to Group Internal Audit review.
• In March 2025, the business announced a successful refinancing, encompassing £320m
ofnew long-term debt. The new financing includes: £200m from US private placement
notes, deepening the investor pool; and a £120m bank term loan across three to five years,
backed by a group of existing banking partners.
• The Group also exercised a one-year extension option in relation to its existing £400m
revolving credit facility, taking the maturity date to June 2030.
• The Group have 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.
Due to financial
control issues
inNorth America
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Principal risks and uncertainties continued
Principal risks/explanation Mitigation Change
Treasury, financial and credit risk management continued
In addition, 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.
This refinancing diversifies the Group’s sources of debt financing and extends the Group’s
debtmaturity profile in advance of the convertible bond of £327m maturing in May 2026.
As a result of the recent financial control failure, as noted above the Group is partnering with
an external firm to accelerate workstreams already underway as part of Provision 29 readiness
and has commenced a Financial Transformation Programme. Both programmes focus
onstrengthening key financial controls across the business.
Economic, political, competitive and market risks
• 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 sales,
passenger numbers, 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.
• The Group’s performance is dependent on the levels of consumer confidence and upon
effectively predicting and quickly responding to changing consumer demands, both in
the UK and internationally. The Group conducts customer research to understand current
demands and preferences in order to help translate market trends into saleable merchandise
and store formats.
• The Group is a member of a number of key industry bodies which provide insight
and updates.
Uncertainties
relating to
geopolitical threats
or escalation
ofglobalconflict
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Principal risks and uncertainties continued
Principal risks/explanation Mitigation Change
Brand Standards
• The WHSmith brand is an important asset and
failure to protect it from unfavorable 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.
• The Group monitors the Company’s reputation, brand standards and key service and
compliance measures to ensure the maintenance of operating standards and regulatory
compliance across all our operations. We undertake regular customer engagement
tounderstand and adapt our product, offer and store environment.
• We operate a framework for monitoring compliance with all regulatory, hygiene and safety
standards, encompassing supplier and store audits and clearly defined sourcing policies
and procedures. Our ESG-related policies and processes encompass risk identification and
mitigation in respect of all environmental, ethical sourcing and other reputational risks.
Key suppliers and supply chain management
• The Group has agreements with key suppliers.
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.
• The Group conducts risk assessments of all its key suppliers to identify alternatives and
develop contingency plans in the event that any of these key suppliers fail.
• Suppliers are required to comply with the conditions laid out in our Responsible Sourcing
Requirements that covers areas such as production methods, employee working conditions
andquality control.
• The Group has contractual and other arrangements with numerous third parties in support
of its business activities. None of these arrangements alone are individually considered
tobeessential to the business of the Group.
Store portfolio
• 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 the Group will be able
tobid successfully for new contracts.
• The Group undertakes research of key markets and demographics to ensure that we
continue to occupy prime sites and identify appropriate locations to acquire new space.
• We maintain regular dialogue and good relationships with all our key landlords. The Group
also conducts customer research and analysis to gather feedback on changing consumer
requirements, which is shared with landlords as part of this ongoing relationship
management programme.
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Principal risks and uncertainties continued
Principal risks/explanation Mitigation Change
Business interruption
• An act of terrorism or war, or an outbreak of a
pandemic disease, 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 closure
of the Group’s distribution centres 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.
• The Group has a framework of operational procedures and business continuity plans that
are regularly reviewed, updated and tested. The Group also has a comprehensive insurance
programme covering our global assets, providing cover ranging from property damage and
product and public liability, to business interruption and terrorism. Back–up facilities and
contingency plans are in place and are reviewed and tested regularly to ensure that business
interruptions are minimised.
• The Group’s IT systems receive ongoing investment to ensure that they are able to respond
to the needs of the business. Back–up facilities and contingency plans are in place and are
tested regularly to ensure that data is protected from corruption or unauthorised use.
Uncertainties
relating to
geopolitical threats
or escalation
ofglobalconflict
Reliance on key personnel
• The performance of the Group depends on its
ability to continue to attract, motivate and retain
key support centre and store staff. The retail sector
is very competitive and the Group’s personnel
are frequently targeted by other companies
for recruitment.
• The Group reviews key roles and succession plans. The Remuneration Committee monitors
the levels and structure of remuneration for directors and senior management and seeks
toensure that they are designed to attract, retain and motivate the key personnel to run the
Group successfully.
Uncertainties
relating to noted
issues in North
America business
and leadership
changes
International expansion
• 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.
• The Group utilises three business models to manage risk in our overseas locations: directly
run, joint venture and franchise.
• The Group uses external consultants to advise on compliance with international legislative
and regulatory requirements, to monitor developments that may impact our operations
inoverseas territories and to conduct reputational due diligence on potential new business
partners. Our geographical spread of activity mitigates against the material concentration
ofrisk in any one area.
Uncertainties
relating to
geopolitical threats
or escalation
ofconflict asthe
business continues
to expand globally
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Principal risks and uncertainties continued
Principal risks/explanation Mitigation Change
Cyber risk, data security and data privacy compliance
• 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 sales.
• The Group employs a framework of IT controls to protect against unauthorised access to
our systems and data, including monitoring developments in cyber security. This control
framework encompasses the maintenance of firewalls and intruder detection, encryption
of data, regular penetration testing conducted by our appointed external quality assurance
providers and engagement with third party specialists, where appropriate.
• We have a Steering Group overseeing our approach and response to cyber risk, and
monitoring our programme of ongoing compliance with the Payment Card Industry Data
Security Standard and the GDPR.
Continuing
increase in no. of
externally reported
cyber threats
Environment and social sustainability
• 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 de-carbonise 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;
– rising climate and policy-driven costs; and
– supply chain disruptions 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.
• Our sustainability strategy, “Our Journey to a Better Business”, sets out policies, objectives and
action plans to address our key issues. It is overseen by Board and Executive level committees.
We have set a target to be net zero by 2050 and are taking action across the business
toincrease our climate resilience.
• We continue to focus on more environmentally responsible sourcing practices, reducing
andredesigning packaging where possible and ensuring traceability for forestry products.
• We sell a broad range of products across a large number of locations, meaning that the risk
of a reduction in revenues due to increased costs from acute and chronic changes in the
weather patterns is mitigated.
Viability statement
In accordance with the UK Corporate Governance
Code 2018, the directors are required to issue a
“viability statement” declaring whether the directors
believe the Group will be able to continue to operate
and meet its liabilities over a period greater than
12 months.
In assessing the Group’s viability, the Board has
considered current and historical performance, the
Group’s current financial position, the business model
and strategy, our approach to risk management and
our principal risks and uncertainties and mitigating
factors (see pages 65 to 70).
The Group’s business model and strategy is presented
on pages 8, 9 and 14. The Strategic report describes
the Group’s plans at both Group and operating
division level. These plans consider the Group’s cash
flows, committed funding liquidity positions, forecast
future funding and key financial metrics.
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Current financing
The Group’s financing arrangements are set out on
pages 31 and 32 and include a £400m multi-currency
revolving credit facility (“RCF”) maturing in June 2030
(of which £259m is undrawn at 31 August 2025); £327m
of convertible bonds maturing in May 2026; and
additional undrawn facilities comprising US private
placement notes of £200m and two term loans of
£200m and £120m respectively. The Group also has
cash and cash equivalents of £71m at 31 August 2025.
Financial covenants on these facilities are tested
half-yearly and are based on fixed charges cover
and leverage.
Assessment period
The Board considers a three-year period to be the
most appropriate timeframe for the Group’s viability
assessment. This period is consistent with the Group’s
financial planning cycle, management incentive
schemes and medium-term financing considerations.
Assessment of viability
In making the viability assessment, the directors have
modelled several scenarios for the three-year period
to 31 August 2028. As disclosed in the Strategic report
on pages 65 to 70, the Board has undertaken a robust
assessment of the emerging and principal risks facing
the Group, including those that would threaten its
business model, future performance, solvency or
liquidity. The process of mitigating and managing
these risks is described on pages 65 to 70 of the
Strategic report.
Within the viability scenario modelling we have applied
an assumption that we will be able to refinance existing
lending facilities as they become due.
The base case scenario is consistent with the latest
budget and three-year plan approved by the Board
inOctober 2025, which include management’s best
estimates of market conditions and includes
several assumptions including passenger numbers,
revenue growth and cost inflation. Under this
scenario, the Group has significant liquidity and
complies with all covenant tests during the three-year
assessment period.
The directors have modelled the impact of several
“severe but plausible” downside scenarios, based
on the identified principal risks covering a range of
adverse operational and financial impacts. The aim
of this modelling is to understand the circumstances
that could lead to the viability of the Group being
threatened, with particular focus given to those
risks that would have the most material and
pervasive impacts.
The primary severe but plausible downside scenario
reflects an economic downturn, representing a fall in
demand and cost inflation.
We have modelled the same assumptions as those
set out as part of the going concern assessment (refer
to page 144) extrapolated across the remainder of the
three-year viability assessment period. This scenario
assumes an increasing reduction to revenue
assumptions of up to ten per cent versus base case
to reflect the risk of lower passenger numbers; and
additional cost inflation, together with a decrease
in variable costs, including turnover-based rents.
Under the severe but plausible scenario, after taking
account of mitigating actions within the Group’s
control, including reducing capital expenditure for
new stores, the Group would continue to have liquidity
headroom on its existing facilities and comply with all
covenant tests throughout the assessment period.
Further severe but plausible scenarios have been
modelled taking into consideration other key principal
risks to the Group, including the loss of key contracts;
supply chain disruption; the impact of data breaches
and/or regulatory fines and increased carbon pricing.
We consider the likelihood of these scenarios
occurring concurrently to be remote and are
confident in the Group’s ability to apply further
mitigating actions in such a scenario, including
reducing operating expenditure, further reduction
or deferral of capital expenditure, reduction or
suspension of dividends, restructuring of operations
and renegotiation of facilities.
A reverse stress test scenario has also been conducted
to understand the level of revenue downside that
could be absorbed before covenants are breached.
Under this scenario in addition to management’s
mitigating actions in the severe but plausible scenario
a further assumption has been made that, post the
payment of the final dividend for the year ended
31 August 2025, no dividends would be paid in the
assessment period. In this reverse stress test scenario,
a covenant breach occurs upon revenue decreasing
by12.3 per cent on a phased basis.
The anticipated costs of our net zero climate change
commitments have been incorporated within the
base case model within the next three years. As set
out in our climate-related disclosures on pages 52 to
62, the impact on the Group’s financial performance
and position is not expected to be material in the short
term, however, we have modelled a scenario related
to the potential impact of increased carbon pricing
within the assessment period.
Conclusion
Taking account of all the above matters, the Group’s
current financial performance and position, and
the principal risks, the directors have a reasonable
expectation that the Group will be able to continue
inoperation and meet its liabilities as they fall due over
the viability assessment period.
This Strategic report was approved by the Board on
19 December 2025.
On behalf of the Board
Max Izzard
Group Chief Financial Officer
19 December 2025
Principal risks and uncertainties continued
71 WH Smith PLC Annual Report and Accounts 2025
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Directors’ biographies
Annette Court
Chair
Date of appointment: 1 September
2022. Annette was appointed as Chair
on 1 December 2022.
Committee membership: Chair of the
Nominations Committee.
Skills and experience: Annette has
a proven track record as a Chair
ofapublicly quoted company and
brings a wealth of experience from her
Board appointments, and has astrong
background in financial services
and technology. She is the Senior
Independent Director of Sage Group
PLC and a non-executive director of
Admiral Europe Compañia de Seguros
S.A. She was previously the chair of
Admiral Group PLC, CEO of Europe
General Insurance for Zurich Financial
Services and the CEO of Direct Line
Group (formerly RBS Insurance).
She has also been a member of the
Board of the Association of British
Insurers (“ABI”).
Andrew Harrison
Interim Group Chief Executive
Date of appointment: 19 November 2025.
Committee membership: None.
Skills and experience: Andrew has
considerable travel retail experience
and a deep understanding of the
Group and its strategy. Andrew joined
WHSmith in May 2021 as Managing
Director for the UK Travel division and
became CEO of the UK division in
January 2025. Prior to joining WHSmith,
Andrew spent 15 years with Manchester
Airports Group where he held various
roles, including Commercial Director
and Managing Director of Manchester
Airport, Managing Director of Stansted
Airport, Chief Operating Officer and
Chief Strategy Officer. He also spent
adecade at Marks & Spencer.
Max Izzard
Group Chief Financial Officer
Date of appointment: 1 December 2024.
Committee membership: None.
Skills and experience: Max is an
accountant and highly experienced
finance director with deep expertise
in multi-site international consumer
businesses and a strong background in
strategic transformation and business
development. He has a wealth of
expertise in a variety of international
businesses and a deep understanding
of operations and finance. Previously,
he was SVP Group and Corporate
Finance at Burberry plc where he held
a variety of senior roles, helping to
support the strategic transformation
and development of the business,
overseeing group finance functions,
and taxand treasury. Prior to Burberry,
Maxheld several senior commercial
andgroup finance roles at IHG PLC.
Colette Burke
Non-Executive Director
Date of appointment: 1 July 2023.
Committee membership: Member
of the Audit, ESG, Nominations and
Remuneration Committees.
Skills and experience: Colette has
significant US and retail experience.
She is the Executive Vice President and
Chief Commercial Officer of the LEGO
Group, responsible for the Group’s
global commercial strategy. Prior to
joining the LEGO Group, she had a
25-year career at consumer electronics
company Bose Corporation as Global
Head of Sales and Marketing and
across a wide range of commercial,
general management and marketing
leadership roles at a global, regional
and national level, including 19 years
working in the USA.
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Directors’ biographies continued
Nicky Dulieu
Non-Executive Director
Date of appointment: 9 September
2020. Nicky will step down from the
Board on 2 February 2026.
Committee membership: Chair
of the Remuneration Committee
and a member of the Audit, ESG
and Nominations Committees.
Nicky stepped down as Chair
of the Audit Committee on
30 November 2024.
Skills and experience: Nicky has
substantial financial and retail expertise.
She trained as an accountant and held
various strategic and financial roles
within Marks & Spencer Group PLC
over a 23-year period. In 2006, Nicky
joined the board of Hobbs Limited as
Chief Operating Officer and Finance
Director and was Chief Executive from
2008 until 2014. With her finance
and retail expertise, she is a valuable
member of the Board and Chair of the
Remuneration Committee. She is a non-
executive director of Barratt Redrow plc
and The Unite Group PLC.
Simon Emeny
Non-Executive Director
Date of appointment: 26 February 2019.
Committee membership: Senior
Independent Director and a member
of the Audit, ESG, Nominations
andRemuneration Committees.
Skills and experience: Simon has a
wealth of consumer-facing experience,
including transport hub sites, and
brings this broad range of skills and
commercial expertise to the Board
and its Committees. He is Executive
Chairman of Fuller, Smith & Turner
PLC, a role he has held since July 2025,
having previously held the role
of Group Chief Executive since 2013.
Simon isalso a non-executive director
of National Gallery Global Limited.
He was previously the Senior
Independent Director of Dunelm
Group PLC.
Situl Jobanputra
Non-Executive Director
Date of appointment: 1 March 2024.
Committee membership: Chair of
the ESG Committee and a member
of the Audit, Nominations and
Remuneration Committees.
Skills and experience: Situl has
significant financial and property
experience and brings this broad range
of skills and commercial expertise to
the Board and its Committees. He is
an experienced corporate financier,
having previously worked in mergers
and acquisitions, equity capital
markets, corporate broking and real
estate investment banking, latterly
at Deutsche Bank. He is the Chief
Financial Officer of Shaftesbury Capital
PLC, having joined in 2014 and served
on its board since 2017.
Helen Rose
Non-Executive Director
Date of appointment: 1 July 2024.
Committee membership: Helen
was appointed as Chair of the Audit
Committee on 1 December 2024 and
isa member of the ESG, Nominations
and Remuneration Committees.
Skills and experience: Helen has
significant operational, financial, risk
and UK retail experience and previously
held senior finance roles at Dixons,
Forte, Safeway and Lloyds Banking
Group over a 30-year executive career.
She brings strong change leadership
and transformation experience gained
from her roles as retail integration
director at Lloyds Banking Group and as
chief operating officer at TSB Banking
Group PLC. Helen is a fellow of the
Institute of Chartered Accountants
in England and Wales having trained
with Coopers & Lybrand. She is a non-
executive director of Greencore PLC and
is also a member of Chapter Zero.
Ian Houghton
Company Secretary and Legal Director,
and was appointed in September 1998.
Previous directors who served during the financial year ended 31 August 2025:
Robert Moorhead stepped down
as a director of the Company
on30 November 2024.
Carl Cowling stepped down
asa director of the Company
on19 November 2025.
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Corporate governance report
“We recognise that this
has been a disappointing
year andare now focused
on delivering for all our
stakeholders by taking
remedial actions to
improve our culture,
governanceandcontrols.”
Annette Court
Chair
This report, which forms part of the Directors’ report,
provides details of how the Company has applied the
principles of, and complied with the provisions of,
theUK Corporate Governance Code 2018 (the “Code”).
A copy of the Code is available publicly from frc.org.uk.
Board role and effectiveness
As Chair, my role is to run the Board to ensure that
the Company operates effectively and ensure that the
Board works collaboratively and has the right balance
of skills, knowledge, independence and experience
toassess, manage and mitigate risks.
Deloitte Review
The overstatement of expected profit in the North
America business was identified as part of the
preparation for the Group's year end results for the
financial year ended 31 August 2025. The Board
sincerely regrets what has happened. It has sought
to move swiftly and decisively to address these
serious matters.
The Board appointed Deloitte LLP in August 2025
toconduct an independent and comprehensive
review of the North America supplier income
recognition issue. The Board also formed a Special
Committee comprising Annette Court, Simon Emeny
and Helen Rose, supported by Ian Houghton, to
ensure appropriate governance over the Deloitte
Review and the wider effect of the Deloitte Review
on the Group. Deloitte and the Special Committee
were supported by the Company’s external legal
counsel, Freshfields LLP. In addition, alongside the
Deloitte Review, the Group finance team undertook
an extensive year end review process for the North
America business and identified additional one-off
costs relating to inventory.
The outcome of the Deloitte Review was announced
in November 2025.
The Board has committed significant time and effort
to ensure that the Company takes action to address
these issues and has developed a robust remediation
plan. Further details of the remediation actions we
have taken are set out on page 95.
More information in respect of the North America
accounting issues and prior year restatements are
setout in Note 1b on pages 148 to 152.
Purpose, values and culture
Our purpose is to make every one of life’s
journeys better.
We have been serving customers for over 230 years,
providing a retail destination of choice and a sense
of community for thousands of customers every
day. We have a presence in more than 30 countries,
employ approximately 9,000 employees, source
products from thousands of suppliers and play an
important part in local economies.
We seek to grow our business sustainably, providing
financial returns for our shareholders, while
maintaining high standards of environmental
stewardship and social equity. In seeking to deliver
such growth, it is important that our colleagues,
business partners and suppliers are able to make
the right decisions. Following the Deloitte Review,
the Board has put in place a remediation plan and
will take further action to substantially improve our
culture, governance and controls. We will support
our stakeholders with a strong values-based culture,
ongoing training and development, and a solid
foundation of responsible business governance,
policies and programmes. You can read more about
our purpose, values and culture on pages 34 to 64.
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Corporate governance report continued
Stakeholder engagement
As a Group, we have a long-standing commitment
to high standards of corporate responsibility,
which includes considering the interests of a broad
stakeholder group in making business decisions.
The Board remains focused on all our stakeholders,
including our colleagues, customers, shareholders
and the communities we are part of. You can read
about our engagement with investors on page 38,
with our customers on page 37, with our employees
on page 36 and community involvement on page 40,
and our approach to rewarding our workforce in the
Remuneration report.
There are a number of effective employee engagement
processes in place across the Group, including the
employee engagement survey and employee forums.
Simon Emeny is the designated non-executive
director with responsibility for workforce engagement.
The Company consulted extensively with employees in
respect of the sale of the High Street and Funky Pigeon
businesses during the year. You can read more about
the High Street consultation process on page 35.
Section 172 of the Companies Act 2006 (the “Act”)
requires a director to have regard to stakeholder
interests when discharging their duty to promote
the success of the Company for the benefit of the
shareholders as a whole. You can read how the Board
has had regard to the interests of the Company’s
stakeholders in accordance with Section 172 of the Act
on pages 34 to 41.
Board changes
As reported last year, Robert Moorhead retired as
CFO/COO on 30 November 2024. Robert Moorhead
was succeeded by Max Izzard who joined WHSmith
on 1 September 2024 as CFO Designate and was
appointed to the Board on 1 December 2024.
In addition, Nicky Dulieu stepped down as Chair of
theAudit Committee and was replaced by Helen Rose
on1 December 2024.
Following the Deloitte Review, Carl Cowling offered his
resignation which the Board accepted. Carl Cowling
stepped down as Group Chief Executive and as a
Board director on 19 November 2025. Carl Cowling
remains employed by the Company until 28 February
2026 to ensure an orderly handover of his duties.
On behalf of the Board, I would like to thank Carl
Cowling for his significant contribution to WHSmith
over the last 11 years. Upon being appointed as Group
Chief Executive in November 2019, Carl Cowling
successfully navigated the Company through the
global pandemic and, more recently, has strategically
repositioned the Group as a pure-play travel retailer.
We wish him every success in the future.
The Board has begun a comprehensive formal search
process for a new Group Chief Executive. Until a
permanent appointment is made, Andrew Harrison,
CEO of the Group’s UK division, was appointed as
a director and Interim Group Chief Executive on
19 November 2025.
Nicky Dulieu has decided not to stand for re-election
as a non-executive director at the AGM. I would like
tothank Nicky for her valuable contribution and
strong commitment to the Company.
The Company has commenced a search for Nicky’s
successor and, as previously noted, in response to the
findings of the Deloitte Review the Company intends
to strengthen the Board including additional North
America retail expertise.
Sale of WHSmith High Street
andFunky Pigeon businesses
As part of the Company’s goal to become a leading
global travel retailer, the Board considered and
approved the sale of the WHSmith High Street
business to Modella Capital. The sale of the High Street
business completed on 29 June 2025. The Board also
considered and approved the sale of the Funky Pigeon
business to Card Factory plc. The sale of the Funky
Pigeon business completed on 14 August 2025.
Thanks
I would like to offer my sincere thanks to all my
colleagues across the Group during this difficult time
and for their ongoing commitment to the Company’s
future success.
Outlook
We have much work to do in the future, including
rebuilding confidence in the Company that will have
been undermined following the matters that have
arisen in relation to the North America accounting
issues. We are now focused on delivering our strategy
of being a global travel retailer and providing
sustainable financial returns for our shareholders.
Annette Court
Chair
19 December 2025
Corporate governance statement
This report, which forms part of the Directors’ report,
together with the Strategic report and Directors’
remuneration report provides details of how the
Company has applied the principles of the Code.
Throughout the financial year ended 31 August 2025,
and up to the date of this report, the Board considers
that it has complied with the provisions of the Code
except as follows:
Board evaluation: the Board recognises the importance
of having a formal and rigorous annual evaluation
of the performance of the Board in accordance with
provision 21 of the Code. Having undertaken an
externally facilitated performance review in the last
financial year, the Board intended to conduct an
internally facilitated performance review during the
financial year ended 31 August 2025. The Board did not
feel that it could meaningfully conduct a review of its
performance during the current financial year while
the Deloitte Review was still ongoing.
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Corporate governance report continued
Accordingly, after careful consideration, the Board
decided to defer this performance review until after
the completion of the Deloitte Review.
Following the publication of the UK Corporate
Governance Code 2024, the Company has
been undertaking work to align its governance
framework with the requirements of the 2024 Code.
The Company will report on the application of the
2024 Code in respect of the financial year ending
31 August 2026 (save for in relation to provision 29
of the 2024 Code which applies to its financial year
ending 31 August 2027).
The Company’s disclosures on its application of
the principles of the Code can be found on the
following pages:
Board leadership and Company purpose
Chair’s letter See pages 74 and 75
ESG Committee report See pages 92 and 93
Purpose, values and culture See page 74
Strategy See pages 1 to 71
Shareholder and
stakeholderengagement
See pages 34 to 41
Division of responsibilities
Leadership, commitment and
Board support
See pages 76 and 77
Composition, succession andevaluation
Board and Committee evaluation See page 80
Nominations Committee report See pages 90 and 91
Audit, risk and internal control
Risks, viability and goingconcernSee pages 87 to 89
Audit Committee report See pages 84 to 89
Remuneration
Directors’ remuneration report See pages 96 to 119
The information that is required by Disclosure
Guidance and Transparency Rule 7.2 to be contained
in the Company’s Corporate governance statement
isincluded in this Corporate governance report, in the
Directors’ remuneration report on pages 96 to 119 and
in the Directors’ report on pages 120 to 124.
Composition and operation
oftheBoard
As at the date of this report, the Board comprised the
Chair, two executive directors and five independent
non-executive directors. Short biographies of each
of these directors, which illustrate their range of
experience, are set out on pages 72 and 73. There
is a clear division of responsibility at the head of the
Company: Annette Court (Chair) being responsible
for running the Board and Andrew Harrison
(Interim Group Chief Executive) being responsible
for implementing strategy, leadership of the
Company and managing it within the authorities
delegated by the Board. Simon Emeny is the Senior
Independent Director. The Board structure ensures
that no individual or group dominates the decision-
making process.
All the directors, whose biographies are on pages 72
and 73, served throughout the financial year ended
31 August 2025 and up to the date of this report with
the exception of Max Izzard who was appointed as
adirector on 1 December 2024 and Andrew Harrison
who was appointed as Interim Group Chief Executive
and a director on 19 November 2025. Carl Cowling also
served as a director throughout the financial year.
All of the non-executive directors who served
during the year and up to the date of this report are
considered by the Board to be independent.
All directors have access to the advice and services
ofthe Company Secretary and may take independent
professional advice at the Company’s expense in
the furtherance of their duties. The Board receives
appropriate and timely information, with Board and
Committee papers normally being sent out a week
before meetings take place. The need for director
training is regularly assessed by the Board.
The interests of the directors and their immediate
families in the share capital of the Company, along
with details of directors’ share awards, are contained
inthe Directors’ remuneration report on pages 96
to 119.
At no time during the year did any of the directors
have a material interest in any significant contract
with the Company or any of its subsidiaries.
Attendance at Board meetings
The Board met 12 times during the year. It is
expected that all directors attend Board meetings
and Committee meetings unless they are prevented
from doing so by prior commitments. The minimum
time commitment expected from the non-executive
directors is one day per month, attendance at
meetings, together with attendance at the AGM,
Board away-days and site visits, plus adequate
preparation time. Where directors are unable to
attend meetings, they receive the papers for that
meeting giving them the opportunity to raise any
issues and give any comments to the Chair in advance
of the meeting. Following the meeting, the Chair
briefs any director not present on the discussions
andany decisions taken at the meeting.
A number of additional meetings were held during
the year to deal with certain matters outside of the
normal schedule of meetings, including the sale
ofthe High Street and Funky Pigeon businesses,
theNorth America accounting issues and the related
independent Deloitte Review.
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Corporate governance report continued
The following table shows the number of Board and Committee meetings held during the financial year ended 31 August 2025 and the attendance record
ofindividual directors:
Number of meetings attended
Directors and role Board skills and competencies
Board
tenure
– years
Board
12
Audit
5
ESG
3
Nominations
2
Remuneration
6
Annette Court
(a)
Chair
Retail finance expertise, strong board leadership and
considerable governance experience.
3 12 of 12 – – 2 of 2 –
Colette Burke
(b)
Non-executive director
Strong commercial and marketing experience on a global
level, US and retail expertise.
2 10 of 12 4 of 5 3 of 3 2 of 2 5 of 6
Carl Cowling
(c)
Group Chief Executive
Strong leadership of the Group, strategic and retail expertise. 6 12 of 12 – – – –
Nicky Dulieu
Non-executive director
Finance and retail expertise, extensive knowledge of retail
and customer service.
5 12 of 12 5 of 5 3 of 3 2 of 2 6 of 6
Simon Emeny
Non-executive director
Commercial expertise and a wealth of consumer-
facingexperience.
6 12 of 12 5 of 5 3 of 3 2 of 2 6 of 6
Max Izzard
(d)
Group Chief Financial Officer
(“CFO”)
Financial and retail expertise with considerable experience
in strategic transformation and business development.
1 9 of 9 – – – –
Situl Jobanputra
Non-executive director
Financial and property expertise and an experienced
corporate financier.
1 12 of 12 5 of 5 3 of 3 2 of 2 6 of 6
Helen Rose
Non-executive director
Finance and operational expertise with considerable
experience in multi-site retail and financial services sectors.
1 12 of 12 5 of 5 3 of 3 2 of 2 6 of 6
a) Annette Court was invited to and attended five meetings of the Audit Committee, three meetings of the ESG Committee and six meetings of the Remuneration Committee
b) Colette Burke was unable to attend two Board meetings due to other commitments. She received the papers in advance of the meeting and gave her comments to the Chair
c) Carl Cowling was invited to and attended five meetings of the Audit Committee, three meetings of the ESG Committee, two meetings of the Nominations Committee and six meetings
of the Remuneration Committee. Carl Cowling stepped down as a director and Group Chief Executive on 19 November 2025
d) Max Izzard was appointed as a director and Group CFO of the Company on 1 December 2024
e) The Board has met 13 times, the Audit Committee has met five times, the ESG Committee has met once, the Nominations Committee has met twice and the Remuneration Committee
hasmet four times since 31 August 2025
Board and executive managementdiversity
The table on the following page shows a breakdown of the composition of the Board and executive management as at 31 August 2025 in accordance with the UK Listing
Rules disclosure requirements. As at 31 August 2025, one of the four senior positions on the Board was held by a woman and the representation of women on the Board
was 50 per cent, and the Board composition included one director from an ethnic minority background. This remains the case following the Board changes outlined above
which occurred after 31 August 2025. At the year end, the Board and members of executive management were asked to complete a diversity disclosure questionnaire
toconfirm which of the categories set out in the following table they identify with:
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Corporate governance report continued
Gender identity
Number of
Board members % of the Board
Number of senior positions
on the Board (CEO, CFO,
Chair and SID)
Number in executive
management
% of executive
management
1
Women 4 50 1 1 10
Men 4 50 3 9 90
Non-binary – – – – –
Not specified/prefer not to say – – – – –
Ethnic background
Number of
Board members % of the Board
Number of senior positions
on the Board (CEO, CFO,
Chair and SID)
Number in executive
management
% of executive
management
1
White British or other White (including
minority-White Groups)
7 88 4 10 100
Mixed/Multiple Ethnic Groups – – – – –
Asian/Asian British 1 12 – – –
Black/African/Caribbean/
Black British
– – – – –
Other ethnic group – – – – –
Not specified/prefer not to say – – – – –
1 Executive management includes the Group Executive Committee (most senior executive body below the Board) and the Company Secretary, excluding administrative and support staff,
asdefined by the UK Listing Rules
Matters reserved for the Board
The Board manages the Company through a formal
schedule of matters reserved for its decision, with its
key focus being on creating long-term sustainable
shareholder value. The significant matters reserved
for its decision include: the overall management of
the Company; approval of the business model and
strategic plans including acquisitions and disposals;
approval of the Company’s commercial strategy
and operating and capital expenditure budgets;
approval of the Annual Report and Accounts
statements, material agreements and non-recurring
projects; treasury and dividend policy; control, audit
and risk management; executive remuneration;
and environmental, social and corporate
governance matters.
The Board has a forward timetable to ensure that
itallocates sufficient time to key areas of the business.
The timetable is flexible enough for items to be
added to any agenda as necessary. The Board’s
annual business includes Chief Executive’s reports,
including business reports; financial results; strategy
and strategy updates, including in-depth sessions
on specific areas of the business and strategic
initiatives; consideration of potential acquisitions;
risk management; dividend policy; investor relations;
health and safety; whistleblowing; sustainability
strategy; Board evaluation; governance and
compliance; communications; and the Annual Report
and Accounts.
The Board set itself a number of objectives at the
beginning of the financial year to help it manage
the Company and support its strategy, including
inrelation to people and future talent planning, the
sale of the High Street and Funky Pigeon businesses,
growing the Group’s North American businesses,
setting its capital allocation policy, cyber security and
IT transformation. The Board reviewed how it had met
its objectives at each meeting during the year.
During the year, the Board assessed the basis on
which the Company generates and preserves value
over the long-term and considered the opportunities
and risks to the ongoing future success of the
business, the sustainability of the Company’s business
model and how its governance contributes to the
delivery of its strategy. Further information on the
risks and opportunities to the future success of the
Company can be found in the Strategic report on
pages 1 to 71.
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Board activities in the financial year ended 31 August 2025
Strategy
• Approval of Company purpose and values
• Approval of the Group’s long-term objectives and commercial strategy
ofthe Group
• Oversight of Group performance against strategy and budget
• Approval of the sustainability strategy and report
• Approval and oversight of sale of High Street
andFunkyPigeon businesses
• Reviewing the strategic plans for the businesses
• Approval of the Three-Year Plan
• Project and tender approvals
• Corporate strategy updates
Financial and operational performance
• The Company’s preliminary and interim results, trading statements
and the Annual Report and Accounts
• Reviewing the Group’s financial forecasts
• Refinancing of the Group’s facilities
• North America accounting issues
• Going concern and viability statements
• Fair, balanced and understandable assessment
• Climate-related disclosures
• Dividend, treasury and tax strategies
• Approval of the budget
• Approval of capital expenditure
Other stakeholder engagement
Customers • Extending our categories and ranges, including a greater focus on food,
healthand beauty, and technology products
• Global sourcing strategy
• Reviewing customer feedback and approving
customer-facing strategies
• Investing in existing and new stores
• Continuing to reduce environmental footprints where possible
and improving product environmental labelling
Shareholders • Annual General Meeting
• Investor relations updates
• Consultation on Board composition and North America
accounting issues
• Chair met significant shareholders
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Corporate governance report continued
Other stakeholder engagement continued
Employees • Annual health, safety and wellbeing reviews to ensure employee safety
• Company culture
• Focus on diversity, equity and inclusion
• People strategy
• Consideration of workforce pay, including the annual pay review
• Modern slavery update and statement
• Talent, succession planning and leadership
• Employee engagement insights
• Gender pay gap reporting
• Colleague leadership and development
• Sale of High Street business and programme
ofemployee communications
Governance and risk
• Appointed Deloitte to undertake an independent and comprehensive
reviewofthe North America supplier income recognition issue
• Risk framework and internal control review
• Regulatory compliance updates
• Group delegation of authority review
• Succession planning
• Principal risks and uncertainties review
• Ongoing monitoring of the Group’s cyber security
• Conflicts of Interest and new appointments
• Compliance with Listing Rules and Market Abuse Regulations
• Committee Terms of Reference review
Climate-related financial disclosures
The Board received presentations and updates on
the progress of the Company to comply with the UK
Listing Rules requirement to make disclosures which
are consistent with the Task Force on Climate-related
Financial Disclosures (“TCFD”) recommendations
and recommended disclosures, and the Companies
Act 2006 requirements in relation to climate-related
financial disclosures. You can read more on our
climate-related financial disclosures on pages 52 to 64.
Board and Committee
performancereview
The Board undertook an external Board performance
review in 2024 but decided not to carry out an
internally facilitated review for the financial year ended
31 August 2025 given the occurrence of the North
America accounting issues and the ongoing Deloitte
Review. The Board will undertake a performance
review in 2026.
While a performance review was not conducted
during the year, the Board nevertheless reviewed the
actions agreed following the external performance
review carried out in 2024 and agreed that good
progress had been made in respect of these actions,
including in respect of the Company’s Board
succession plan with the appointment of Max Izzard
as Group CFO.
The Group Chief Executive also normally reviews
the performance of the Group CFO and other senior
executives. The Chair reviews the performance of the
Group Chief Executive. The Chair also undertook a
review with each of the non-executive directors to
assess their effectiveness and commitment to the role.
During the year, the Chair had regular meetings with
the non-executive directors, without the executive
directors present, to discuss Board issues and how to
maintain the best possible team. The Board is satisfied
that each of the non-executive directors dedicates
sufficient time to the business of the Company and
contributes to its governance and operations.
The Senior Independent Director met the other
non-executive directors to undertake an assessment
of the Chair’s performance. The non-executive
directors confirmed that there are no relationships
or circumstances which are likely to affect, or could
appear to affect, her judgement or independence.
The non-executive directors, taking into account
the views of the executive directors, concluded
that Annette Court is an effective Chair and clearly
demonstrates her commitment to the role.
Succession planning
Under the Company’s Articles of Association, directors
are required to retire and submit themselves annually
for re-election and new directors appointed by the
Board offer themselves for election at the next AGM
following their appointment. The Company’s Articles
of Association give a power to the Board to appoint
directors and, where notice is given and signed by all
the other directors, to remove a director from office.
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During the year ahead, a key focus for the Board will
be the search process for a new Group Chief Executive
and recruitment of new non-executive members
tostrengthen the Board. In addition, it will continue
to focus on senior management succession plans
to facilitate the readiness of internal candidates for
all key roles across the business, including on an
interim basis if required. The Board seeks to ensure
that it demonstrates good governance, culture
and leadership, recognising that these are key
considerations for a strong, sustainable business and
that the tone comes from the top. The Board will
consider what further steps it can take in relation
to these matters in light of the conclusions of the
Deloitte Review. The Company’s purpose, values
and culture will continue to form an important
part of the Board’s discussions. The Nominations
Committee will continue to support the Board by
ensuring that culture is built into recruitment and
succession considerations.
Culture
The Board assesses and monitors the culture of the
business in a number of ways, including through:
interaction with executives, members of the senior
management team, and other employees in Board
meetings and on visits to stores, offices and other
Company locations; regular Board agenda items
and supporting papers, covering risk management,
internal audit reports and follow-up actions, customer
engagement, health and safety, accident reports,
employee engagement and retention, whistleblowing
and regulatory breaches; assessing the results of
colleague surveys, reviewing a range of employee
indicators, including engagement, retention,
absence, learning and development, gender pay,
DEI, workforce composition and demographics; and
engaging with other stakeholders, as described in
the Section 172 Statement on pages 34 to 41 and the
Corporate governance report. Disappointingly, the
North America supplier income recognition issue
and outcome of the Deloitte Review highlighted
shortcomings in our culture and the Board is
committed to rebuilding the culture of the Company
such that it fully reflects our values.
The Board recognises the importance of being
visible and accessible to customers and employees.
During the year, Annette Court and Helen Rose
attended Business Risk Committee meetings and the
non-executive directors accompanied management
on site visits to Travel stores. The Board visited its stores
in Euston and Kings Cross rail stations. The Board
believes that site visits provide directors with valuable
insights into the business, helping to deepen their
knowledge and understanding of the Company.
When joining the Board, a new non-executive director
typically meets individually with each Board member
and with senior management to give them insight
into all aspects of the business, including our strategy,
culture, values, sustainability, governance, and the
opportunities and challenges facing the business.
The Company Secretary briefs them on policies, Board
and Committee procedures, and core governance
practice. They visit a number of business locations
and meet key advisers. They also receive induction
materials including recent Board and Committee
papers and minutes, strategy papers, investor
presentations, Matters Reserved for the Board and the
Board Committees’ Terms of Reference.
During the year, Max Izzard participated in an
induction programme, which included a review of
previous Board papers and minutes, a briefing paper
on the duties of directors, Terms of Reference for
the Board and Committees, and Group policies and
procedures, including the Code of Dealing; meetings
with senior executives, including the Managing
Directors of the Group’s UK and international
businesses; attended trading and risk committees;
meetings with shareholders; meetings with advisers;
and store visits.
Diversity policy
The Board values diversity in all its forms, both within
its own membership and at all levels of the Group.
The Board is highly supportive of the initiatives
the Company has in place to promote diversity
throughout the business. The Board believes that
diversity in its widest sense is a key component to
the success of the Company and receives reports
on the Company’s diversity profile to ensure that
the workforce reflects our commitment to diversity.
The Board aims to ensure its membership, and that
of the wider Group, reflects diversity in its broadest
sense so that it has a combination of demographics,
skills, experience, race, age, gender, sexual orientation,
education and professional background, thereby
providing a wide range of perspectives, insights and
challenge needed to support good decision-making.
The Board’s diversity policy sets out the Company’s
approach to diversity applicable to the Board, its
Committees and senior management and aims to
ensure that the Board nominations and appointments
process, and the hiring and promotions process for
senior management, are based on fairness, respect
and inclusion, and that the search for candidates
will be conducted with due regard to the benefits
of diversity.
Further information on the Company’s commitment
to diversity can be found in the Nominations
Committee report on pages 90 and 91 and in the
People section of the Strategic report on pages
47to 49.
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Risk management
The Board appointed Deloitte LLP in August 2025 to
conduct an independent and comprehensive review
of the North America supplier income recognition
issue. The Deloitte Review identified that 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.
Factors that contributed included weaknesses in the
composition of the finance team and insufficient
systems, controls and review procedures for
supplier income across commercial and finance
functions in North America. The Board is developing
a robust remediation plan tostrengthen its risk
management framework which will be monitored
and governed by the Board and appropriately assured.
More information in respect ofthe North America
supplier income recognition issue is set out on
page 95.
The Company maintains its framework of risk
management and internal control with a view to
safeguarding shareholders’ investment and the
Company’s assets. This framework is designed to
identify, evaluate, manage and monitor risks that may
impede the Company’s objectives. It cannot, and is
not designed to, eliminate risk entirely. This framework
provides a reasonable, not absolute, assurance against
material misstatement or loss. The main features of
the risk management and internal control framework
operated within the Group are described below.
The framework has been in place throughout the year
under review and remains in place to date.
The Board has overall responsibility for the Group’s
framework of risk management and internal
control and has conducted a detailed review of
its effectiveness during the year to ensure that
management has implemented its policies on risk and
control. This review included receiving reports from
management, discussion, challenge, and assessment
of the principal risks. In addition, the Board received
presentations from management on higher risk
areas, for example, cyber security, UK supply chain/
IT transformation and international expansion.
The Board has established an organisational structure
with clearly defined lines of responsibility, which
identify matters requiring approval by the Board.
Steps continue to be taken to embed internal control
and risk management further into the operations
of the business and to deal with areas that require
improvement, which come to the attention of
management and the Board. The Board confirms that
there is an ongoing process for identifying, evaluating
and managing emerging and principal risks faced
by the Group, including those risks relating to social,
environmental and ethical matters. The Board
undertakes a robust assessment of the Group’s
emerging and principal risks. The Board confirms that
the processes have been in place for the year under
review and up to the date of this report and that they
accord with the Financial Reporting Council (“FRC”)
Guidance on Risk Management, Internal Control
and Related Financial and Business Reporting (the
“Risk Management and Internal Control Guidance”).
The processes are regularly reviewed by the Board.
The principal risks and uncertainties facing the Group,
together with the procedures and processes for
identifying, managing and the steps taken to mitigate
principal and emerging risks, can be found in the
Strategic report on pages 65 to 71.
Further information on internal controls and risk
management can be found in the Audit Committee
report on page 85.
Engagement with shareholders
The Board’s primary role is to promote the success
of the Company and the interests of shareholders.
The Board is accountable to shareholders for the
performance and activities of the Group. The Company
recognises the importance of communicating
with its shareholders to ensure that its strategy
and performance are understood. This is achieved
principally through the Annual Report and Accounts
and the AGM. In addition, a range of corporate
information, including all Company announcements
and presentations, is available to investors on the
Company’s website whsmithplc.co.uk. For more
information on shareholder engagement see page 38.
Formal presentations are made to institutional
shareholders following the announcement of the
Company’s full year and interim results. The Board
recognises that the AGM is normally the principal
forum for dialogue with private shareholders.
All directors normally attend the AGM and are
available to answer questions that shareholders
maywish to raise.
The Board as a whole is kept fully informed of the
views and concerns of major shareholders. The Group
Chief Executive and Group CFO update the Board
following meetings with major shareholders and
analysts’ briefings are circulated to the Board.
The Group Investor Relations Director also carries
out aregular programme of work and reports to the
Board the views and information needs of institutional
and major investors. This is part of the regular contact
that the Group maintains with its institutional
shareholders. The Chair and non-executive directors
also attend meetings with major shareholders and
other stakeholders.
During the year, the Chair and Chair of the Audit
Committee engaged with the Company’s largest
shareholders in respect of the North America
accounting issues.
Corporate governance report continued
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Anti-corruption
The Company has continued to enhance its policies
and procedures in order to meet the requirements
ofthe Bribery Act 2010. These policies and procedures
include training for individuals to ensure awareness
of acts that might be construed as contravening the
Bribery Act. The Group’s policy on anti-bribery and
corruption is included in the Company’s Code of
Business Conduct at whsmithplc.co.uk/sustainability.
Fair, balanced and understandable
The Board confirms that it considers the 2025
Annual Report and Accounts, taken as a whole, is
fair, balanced and understandable and provides the
information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy.
Discussion of the Board’s assessment of the Annual
Report and Accounts is described in the Audit
Committee report on page 87.
Board Committees
The Board delegates specific responsibilities to the
Board Committees, being the Audit, ESG, Nominations
and Remuneration Committees. Details of the role,
composition, responsibilities and activities of the
Audit Committee can be found on pages 84 to 89, the
ESGCommittee on pages 92 and 93 the Nominations
Committee on pages 90 and 91 and the Remuneration
Committee in the Directors’ remuneration report on
pages 96 to 119. The role and responsibilities of each
Committee are set out in formal Terms of Reference,
which are available on the Company’s website
whsmithplc.co.uk.
Approvals Committee
The Approvals Committee facilitates the internal
approvals process by approving matters as delegated
by the Board. The Approvals Committee comprises
theGroup Chief Executive and the Group CFO.
Disclosure Committee
The Disclosure Committee is responsible for ensuring
compliance with the Company’s obligations under
the UK Market Abuse Regulation, UK Listing principles
and rules and the maintenance of disclosure
controls and procedures. The Disclosure Committee
comprises all of the directors of the Company and the
Company Secretary.
Corporate governance report continued
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Audit Committee report
Dear Shareholder
Following my appointment as Chair of the Audit
Committee in December 2024, I am pleased to
present my first report on the activities of the Audit
Committee for the financial year ended 31 August
2025. Our principal objectives are to oversee and
assist the Board in its responsibility to produce an
Annual Report and Accounts which is fair, balanced
and understandable, review the Group’s financial
results, assess the performance of both the Internal
Audit function and the external auditor, and
review the management of the Group’s systems
of internal control, business risks and related
compliance activities.
The other members of the Committee are Colette
Burke, Nicky Dulieu, Simon Emeny and Situl
Jobanputra, who are all independent non-executive
directors. The Board considers that I have recent and
relevant financial experience, as required by the Code,
and that the Committee, as a whole, has competence
relevant to the sector in which the Company operates.
The Committee met five times during the year. At the
invitation of the Committee, the Chair of the Board,
the Group Chief Executive, the Group CFO, the Group
Finance Director, the Director of Audit and Risk,
representatives of the Group’s senior management
team and of the external auditor attend meetings.
The Committee has regular private meetings with the
external and internal auditors during the year.
The Committee has been focused on the North
America supplier income recognition issue since it
was brought to the Board’s attention in August 2025.
More details of this issue are set out on pages 94 and
95. I have attended, along with the Chair, a number
ofmeetings with our largest institutional shareholders
in respect of this issue. Areas of particular concern
for the Committee in relation to the North America
supplier income recognition and inventory-related
issues have been:
(a) to understand how the supplier income
overstatement identified has accumulated over time,
how it has affected prior years’ results, and to consider
whether the impact on past years’ results together
with the inventory related issues was such as to
require them to be restated;
(b) to ensure that the Group’s relationship with
its suppliers, in North America, the UK and in our
international operations, have been the subject
ofrigorous focus;
(c) to safeguard the preparation of the FY25 financial
statements and the FY25 North America audit by: the
appointment of an interim CFO of the North America
division; an onsite review by the Group finance team
of the financial information to be consolidated in the
Group consolidated financial statements. A risk-based
approach was applied to scrutinising the balance sheet
based on judgement involved, source of information
and complexity to ensure that the financial information
was accurate and could be relied upon as part of
the external audit process; and providing additional
support to the North America finance team;
(d) to satisfy itself, in discussions with the Interim
Group Chief Executive and Group CFO and the
internal and external auditors and advisers, that the
remedial steps proposed, including to the Group’s
financial systems and internal controls are sufficient to
avoid any repetition of the issues that have emerged
in respect of supplier income and inventory; and
(e) to review the underlying profitability of the Group’s
North America division.
A comprehensive review of supplier income and
inventory controls is being undertaken across all
Group divisions by the internal audit team. The Group
has also taken steps to strengthen its Group finance
and Audit and Risk teams, including the appointment
of a new Group Finance director and Director of
Audit and Risk. More information in respect of the
North America accounting issues and prior year
restatements are set out on pages 94 and 95 and Note
1b on pages 148 to 152.
“We recognise that this
hasbeen a disappointing
year and are now focused
on improving our culture,
governanceand controls.”
Helen Rose
Chair of the Audit Committee
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Audit Committee report continued
A summary of other activities undertaken by the
Committee during the year is as follows:
Financial reporting
• reviewing the Interim results announcement and
the Annual Report and Accounts, including, where
relevant, compliance with the UK Listing Rules,
Disclosure Guidance and Transparency Rules,
the Code and statutory reporting requirements
and recommending those documents for
Board approval;
• reviewing the findings of the Deloitte report and
thework undertaken by Group Finance in reviewing
the North America balance sheet;
• considering the proposed balance sheet
restatements and notes for the financial years
ended 31 August 2024 and 31 August 2023;
• considering papers from management on the
significant financial reporting judgements
made in the preparation of the Interim results
announcement and the Annual Report
and Accounts;
• considering the Company’s going concern
statement and papers from management, which
consider the liquidity and covenant compliance
ofthe Group;
• considering the Company’s viability statement and
papers from management, which consider the
long-term viability of the Group;
• assessing and recommending to the Board that
the Annual Report and Accounts is fair, balanced
and understandable;
• considering presentations and updates on the
Company’s climate-related financial disclosures;
• monitoring the integrity of the Group’s financial
statements and trading statements;
• considering the Company’s emerging and principal
risks and uncertainties including risks identified in
respect of supplier income and inventory related
matters and reviewing the mitigating actions that
management has taken to ensure that these risks
are appropriately monitored and controlled;
• approval of the Group Tax Strategy;
• assessing the impact of new accounting standards
and guidance;
• agreeing the scope of PwC’s annual audit plans,
assessing the effectiveness of the external audit
process and considering the accounting, financial
control and audit issues reported by PwC that
flowed from their work;
• approval of plan for audit partner rotation;
• reviewing external auditor’s independence and
approving the policy on the engagement of PwC
tosupply non-audit services;
• negotiating and agreeing the audit fee;
• undertaking a performance review of Internal Audit
and the external auditor; and
• holding private meetings with the external and
internal auditors.
Risk management and internal controls
• reviewing the effectiveness of the Group’s financial
reporting, internal control policies and procedures
for the identification, assessment and reporting
of risk, including supplier income, inventory, cyber
security and tax;
• receiving reports and presentations from members
of the Company’s senior management;
• receiving reports from Business Risk Committees
on areas of the Company’s control and risk
management processes;
• considering the results of the internal control
certification evaluation of the Group’s control
systems and agreeing actions to be undertaken
bymanagement to enhance controls;
• receiving updates and recommendations on the
reforms to the Code and internal controls proposed
by the UK Government;
• considering the Company’s systems and framework
of controls designed to detect and report fraud and
money laundering;
• receiving reports from Internal Audit in respect
ofcalls to the Company’s independently operated
and confidential whistleblowing helpline Safecall;
• receiving and reviewing reports from the Internal
Audit and Risk teams and reviewing and agreeing
their annual plans;
• reviewing the Company’s liquidity and ensuring
thatit is compliant with its finance facilities;
• reviewing the Company’s treasury policy;
• considering and approving the report on the
Company’s payment practices; and
• reviewing the Committee’s Terms of Reference.
Audit Committees and the External
Audit: Minimum Standard
The Financial Reporting Council’s Audit Committees
and the External Audit: Minimum Standard (the
“Standard”) applies to the Company on a comply or
explain basis by virtue of the Company’s status as a
FTSE 350 constituent. This Audit Committee report
describes how, and the extent to which, the Company
has complied with the provisions of the Standard
(in particular the External auditor, External auditor
effectiveness and External auditor independence
sections of this report). There were no shareholder
requests for certain matters to be covered in the
audit during the year. The Company’s Annual Report
and Accounts for the year ended 31 August 2022
were reviewed by the FRC and they did not identify
any matters on which they wished to raise any
specific questions but made observations on certain
disclosures included in the Annual report.
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Audit Committee report continued
The FRC’s letter points out that its review was solely
based on a review of the Company’s Annual Report
and Accounts for the year ended 31 August 2022.
It states that the review did not benefit from a
detailed knowledge of the Company’s business or
an understanding of the underlying transactions
entered into and that the FRC’s role is not to verify the
information provided but to consider compliance with
reporting requirements and, as a result, the review
provides no assurance that the Company’s 2022
Annual Report and Accounts are correct in all material
respects. An explanation ofthe application ofthe
Group’s accounting policies isprovided on pages
144to 160.
Significant financial reporting
issuesand areas of judgement
In preparing the financial statements, there
are a number of areas requiring the exercise by
management of judgement. The Committee’s
role is to assess whether the judgements made by
management are reasonable and appropriate. In order
to assist in this evaluation, the Group CFO presents
an accounting paper to the Committee twice a year,
setting out the key financial reporting judgements,
and other papers as required.
The main areas of judgement that have been
considered by the Committee in the preparation of
the financial statements are as follows:
Supplier income
The Committee received a paper from management
on accounting for supplier income. It discussed
the types of supplier income arrangements and
estimates made in respect of the accounting for
these arrangements and the control deficiencies that
had arisen in the North America division. The paper
included the North America supplier income
recognition issue and resulting restatements of
financial information for the years ended 31 August
2024 and 31 August 2023. The Committee is satisfied
with the process and judgement adopted by
management for recognition of supplier income and
the enhanced disclosures introduced in Note 16 to the
financial statements. The Committee also considered
the activities that management carried out to ensure
this issue as set out in the Remediation plan together
with the outcomes of investigations by internal audit
and external third-party experts and concurred with
management’s assessment that adequate training
and processes have been implemented to ensure
compliance with policy and appropriate recognition
ofsupplier income going forwards.
Non-underlying items
The Committee considered the presentation of
the financial statements and, in particular, the
presentation of non-underlying items in accordance
with the Group accounting policy. This policy states
that adjustments are only made to reported profit
before tax in determining an alternative performance
measure where items 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.
The Committee received detailed reports from
management outlining the judgements applied
in relation to the non-underlying costs incurred
during the year. These costs included restructuring
and transformation costs linked to Board-agreed
programmes, costs relating to M&A activity,
impairment charges and other property costs,
significant items relating to pension schemes, costs
of the North America supplier income recognition
issue and amortisation of intangible assets acquired
inbusiness combinations.
This was a key area of focus for the Committee, which
was cognisant of the need to ensure that items were
appropriately classified and that the disclosure of the
non-underlying items was sufficient for users ofthe
financial statements to understand the nature and
reason for the items. The Committee challenged
management on the nature of items classified as non-
underlying to ensure that there was consistency of
treatment compared to the prior year. The Committee
received reporting from PwC on the work undertaken
in respect of the classification of non-underlying items.
Sale of High Street and
FunkyPigeonbusinesses
The Committee received a paper from management
on accounting for, and disclosure of, the sale of the
High Street and Funky Pigeon businesses in the year.
This set out the judgements made by management
in respect of determining whether the businesses
sold meet the criteria of discontinued operations and
the valuation of deferred consideration, including the
realisation of certain tax assets linked to the sale of the
High Street business. The Committee also received
reporting from PwC regarding the audit work they
performed over the sale of the businesses and is
satisfied as to the appropriateness of the Company’s
accounting and disclosures.
Inventory valuation
The Committee received a paper from management
on accounting for, and valuation of, inventory.
It discussed the judgements made by management,
with specific consideration given to inventory
provisioning, including provision for out-of-date, slow
moving, obsolete or lost stock, and inventory-related
costs, including the restatement of certain of these
costs in North America for prior periods. The Committee
also considered the control deficiencies related to
inventory and the action taken to remedy them as
set out in the Remediation plan. The Committee is
satisfied that the process and judgement adopted
by management for the valuation of inventory is
sufficiently robust to establish the value of inventory
held and is satisfied asto the appropriateness of the
Company’s accounting and disclosures.
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Audit Committee report continued
Valuation of store property, plant and
equipment and right-of-use assets
The Committee received a paper from management
on its impairment assessment for store-based
property, plant and equipment and right-of-use assets.
This set out the judgements made by management
in respect of its impairment indicator assessment
and the approach to determining a recoverable
amount. The Committee also received reporting
from PwC regarding the audit work they performed
over the impairment assessment and is satisfied as
to the appropriateness of the Company’s accounting
and disclosures.
Valuation of goodwill and other
indefinite-lived intangible assets
The Committee received a paper from management
on its impairment assessment for goodwill and other
indefinite-lived intangible assets. This set out the
judgements made by management in respect of
determining whether an impairment charge was
required, including the basis for the recoverable
amount, and the disclosure of reasonably possible
changes to key assumptions. The Committee also
received reporting from PwC regarding the audit work
they performed over the impairment assessment and
is satisfied as to the appropriateness of the Company’s
accounting and disclosures.
Going concern and viability statement
The Committee reviewed management’s assessment
of viability and going concern.
The Committee considered the impact of the North
America supplier income recognition issue on the
Group’s performance and financial position and the
forecast assumptions applied in the approved budget
and three-year plan. The Committee also considered
the Group’s financing facilities and future funding
plans. The Company received advice from external
lawyers in respect of the impact of the North America
supplier income recognition issue on the Company’s
finance facilities. The Committee concluded that
the assumptions applied are appropriate in both
the viability and going concern assessments,
and confirmed that the application of the going
concern basis for the preparation of the financial
statements continued to be appropriate, with no
material uncertainties.
The Committee reviewed the process and assessment
of the Company’s prospects made by management
in support of its longer-term viability statement,
including:
• the review period and alignment with the
Company’s internal plans and forecasts and with
its work to support the going concern basis of
presentation for the financial statements;
• the assessment of the capacity of the Company
to remain viable after consideration of future cash
flows, borrowings and mitigating factors; and
• the modelling of the potential financial impact of
certain of the Company’s principal risks materialising
using severe but plausible scenarios on the
Company’s financial performance.
The Committee received reporting from PwC on
the work undertaken to assess going concern and
viability and specifically discussed the content of the
disclosures made in the Strategic report on pages 70
and 71 and the basis of preparation within Note 1 of the
financial statements on page 144.
The viability statement is set out in the Strategic report
on pages 70 and 71.
Fair, balanced and
understandableassessment
At the request of the Board, the Committee has
considered whether, in its opinion, the 2025 Annual
Report and Accounts, taken as a whole, is fair,
balanced and understandable, and provides the
information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy. The Committee was assisted in its review
by a number of processes, including the following:
• the Annual Report and Accounts is drafted by
senior management with overall co-ordination
bya member of the Group Finance team to ensure
consistency across the relevant sections;
• an internal verification process is undertaken
toensure factual accuracy;
• an independent review is undertaken by the
Director of Audit and Risk to assess whether the
Annual Report and Accounts is fair, balanced and
understandable using a set of pre-defined indicators
(such as consistency with internally reported
information and investor communications);
• comprehensive reviews of drafts of the Annual
Report and Accounts are undertaken by the
executive directors and other senior management;
• an advanced draft is reviewed by the Board and the
Company’s Legal Director and, in relation to certain
sections, by external legal advisers; and
• the final draft of the Annual Report and Accounts
isreviewed by the Committee prior to consideration
by the Board.
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Following its review, the Committee advised the
Board that the Annual Report and Accounts, taken
as a whole, was considered to be fair, balanced and
understandable and that it provided the information
necessary for shareholders to assess the Company’s
position and performance, business model
and strategy.
Risk management
andinternalcontrols
The Board is ultimately responsible for the Group’s
system of internal control and for reviewing its
effectiveness. The Board has already taken steps
toensure that it will comply with the requirements
of Provision 29 of the 2024 Code which requires it to
give an annual confirmation as to the effectiveness
ofthe Group’s material risk management and internal
control frameworks. The Board has ensured that
the issues in the North America division have been
robustly investigated and that any deficiencies will
be fully mitigated. The Board has approved and
embarked on implementing its comprehensive and
detailed remediation plan, further details of which
areset out on page 95.
The Committee has reviewed the findings of the
Deloitte Review and has initiated remediation
actions to address the control failures that have been
identified in the North America division, including
strengthening oversight, enhancing documentation
and improving control design and execution.
The Committee monitors and regularly reviews
the effectiveness of the Group’s risk management
processes and internal financial and non-financial
controls. The key features of the risk management
process that were in place during the year are
as follows:
• each business has its own risk committee which
identifies and manages the risks in the business
and reports to the Committee. Members of the
Board, including the Chair of the Committee, attend
business risk committee meetings;
• each business conducts risk assessments based on
identified business objectives, which are reviewed
and agreed annually by the management of each
business. Risks are considered in respect of strategy,
reputation, operations, financial and compliance
and are evaluated in respect of their potential
impact and likelihood. These risk assessments are
updated and reviewed quarterly and are reported
tothe Committee;
• a Group risk assessment is also undertaken by
the Internal Audit team, which considers all areas
of potential risk across all systems, functions and
key business processes. This risk assessment,
together with the business risk assessments, forms
the basis for determining the Internal Audit Plan.
Audit reports in relation to areas reviewed are
discussed and agreed with the Committee;
• the Internal Audit team meets annually with all
senior executives, to undertake a formal review and
certification process in assessing the effectiveness
ofthe internal controls across the Group. The results
of this review are reported to the Committee;
• the Committee confirms to the Board that it
has reviewed the effectiveness of the systems of
internal control, including financial, operational,
and compliance controls and risk management
for the period of this report, in accordance with
the Code and the Risk Management and Internal
Control Guidance;
• the Board is responsible for approving the annual
budget and the three-year plan, for approving major
acquisitions and disposals and for determining
the financial structure of the Company, including
treasury and dividend policy;
• the Committee assists the Board in the discharge
of its duties regarding the Group’s financial
statements, accounting policies and the
maintenance of internal business, operational and
financial controls. The Committee invites input
and attendance from members of the senior
management team of the Group at its meetings
todiscuss the design and operation of key business
and internal controls and the assessment of risks
that affect the Group. The Committee provides
a link between the Board and PwC through
regular meetings;
• the Company has in place internal control and
risk management systems in relation to the
process for preparing consolidated financial
statements. The key features of these systems
are that management regularly monitors and
considers developments in accounting regulations
and best practice in financial reporting and,
where appropriate, reflects developments in the
consolidated financial statements. PwC also keeps
the Committee appraised of these developments;
the Committee and the Board review the draft
consolidated financial statements. The Committee
receives reports from management and PwC on
significant judgements, changes in accounting
policies, changes in accounting estimates and
other pertinent matters relating to the consolidated
financial statements, and provides robust and
independent challenge to management where
appropriate. The full year financial statements are
subject to external audit and the half-year financial
statements are reviewed by PwC;
• the Internal Audit team advises and assists
management in the establishment and
maintenance of adequate internal controls and
reports to the Committee on the effectiveness
ofthose controls;
Corporate governance report continued
Audit Committee report continued
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Audit Committee report continued
• there is a comprehensive system for budgeting and
planning, and for monitoring and reporting the
performance of the Company’s business to the Board.
Monthly results are reported against budget and
prior year, and forecasts for the current financial year
are regularly revised in light of actual performance.
These results and forecasts cover profit, cash flows,
capital expenditure and balance sheets; and
• routine reports are prepared to cover treasury
activities and risks, for review by senior executives,
and annual reports are prepared for the Board and
Committee covering tax, treasury policies, insurance
and pensions.
The Director of Audit and Risk attends the meetings
ofthe Committee to discuss the above matters.
As noted above, various remediation actions have
been initiated in light of the findings of the Deloitte
Review which will impact the above risk management
processes and internal financial and non-financial
controls. The Committee will oversee these actions
and the enhancements to be made to these processes
and controls. See pages 94 and 95 for further detail
onthe findings of the Deloitte review.
External auditor
During the year, PwC reported to the Committee
on their independence from the Company.
The Committee and the Board are satisfied that
PwC has adequate policies and safeguards in place
to ensure that auditor objectivity and independence
are maintained. Jon Sturges was appointed as the
PwC audit partner and Senior Statutory Auditor at the
conclusion of the financial year ended 31 August 2024.
In addition, PwC appointed a new US audit partner
toundertake the audit of the North America business.
The directors will be proposing the re-appointment
of PwC at the forthcoming AGM. The Committee will
continue to monitor the objectivity, effectiveness and
independence of PwC as external auditor.
External auditor effectiveness
In line with the Committee’s Terms of Reference, the
Committee undertook a thorough assessment of
the quality, effectiveness, value and independence
of the audit of the financial year ended 31 August
2024 provided by PwC. The Director of Audit and
Risk prepared a questionnaire seeking the views
and feedback of the Board, together with those of
Group and divisional management, and it formed
the basis offurther discussion with respondents.
Input was sought from Committee members and
from members of the management team on areas
including the auditor’s expertise, professionalism,
independence and challenge; their planning and
audit approach and whether the agreed audit plan
had been met; the quality and content of reporting
and the outputs from the audit; and governance of
the audit, including assessment of team members’
performance and independence. The findings of the
survey were considered by the Committee which
also considered the North America accounting issues
aspart of its assessment.
Overall, the Committee was satisfied as to PwC’s
independence and effectiveness. As a result, PwC’s
re-appointment as external auditor at the forthcoming
AGM is recommended to shareholders.
External auditor independence
The Committee has a formal policy on the Company’s
relationship with its external auditor in respect of
non-audit work to ensure that auditor objectivity and
independence are maintained. The policy is reviewed
annually by the Committee. The only significant
non-audit work undertaken by PwC in the financial
year ended 31 August 2025 related to the interim
review. The auditor may only provide such services
if such advice does not conflict with their statutory
responsibilities and ethical guidance. The Committee
made enquiries of PwC and management and were
satisfied that no such conflict existed.
On behalf of the Committee, my approval is required
before the Company uses PwC for non-audit services
as specifically set out in the policy, or if the fees exceed
£25,000 per matter. The Committee is satisfied that
it was compliant during the year with its policy in
respect of the scope and maximum level of permitted
fees incurred for non-audit services provided by
PwC. For the financial year ended 31 August 2025 the
non-audit fees paid to PwC were £188,150, of which
£186,800 related to the interim review, and the audit
fees payable to PwC were £3.7m.
The Company has complied during the financial year
under review, and up to the date of this report, with
the provisions of the CMA Statutory Audit Services
Order 2014.
Reflection by Committee Chair
The Committee is committed to supporting the Board
to help rebuild trust across all our stakeholders and
ensure that the remediation plan is fully implemented,
embedded across the Group and independently
assured. Further details on remediation can be found
on page 95.
I will be available at the Annual General Meeting
to answer any questions about the work of
the Committee.
Helen Rose
Chair of the Audit Committee
19 December 2025
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Corporate governance report continued
Nominations Committee report
“The Committee will focus on
continuing to strengthen the
composition of the Board.”
Annette Court
Chair of the Nominations Committee
Dear Shareholder
As Chair of the Nominations Committee, I am
pleased to present my report on the activities of
the Nominations Committee for the financial year
ended 31 August 2025. The Committee’s principal
responsibility is to ensure that the Board comprises
individuals with the requisite skills, knowledge,
independence and experience to ensure that it is
effective in discharging its responsibilities and ensure
that appropriate procedures are in place for the
nomination, selection and succession of directors
andsenior executives.
The other Committee members are Colette Burke,
Nicky Dulieu, Simon Emeny, Situl Jobanputra and
Helen Rose, who are all independent non-executive
directors. In the event of any matters arising
concerning my membership of the Board, I would
absent myself from the meeting as required by the
Code and the Senior Independent Director would
takethe Chair.
The Committee met twice during the year.
The principal matters discussed at the meetings
were succession planning for Board and senior
executives, career planning, identifying talent across
the businesses and reviewing the work that has been
undertaken in respect of improving diversity in the
Company’s senior leadership group.
As reported last year, Robert Moorhead stepped down
from the Board on 30 November 2024. He remained
as an employee of the Company until 28 February
2025 in order to assist with the transition to Max
Izzard as Group CFO. Max Izzard joined the Company
on 1 September 2024 as CFO Designate and was
appointed to the Board on 1 December 2024.
Following receipt of the Deloitte Review, Carl
Cowling offered his resignation which the Board
accepted. Carl Cowling stepped down as Group Chief
Executive and as a Board Director on 19 November
2025. The Board has begun a comprehensive formal
search process for a new Group Chief Executive and
is committed to appointing the strongest candidate
to lead the next phase and guide the Group’s
long-term growth strategy. Until a permanent
appointment is made, Andrew Harrison, CEO of the
Group’s UK division, was appointed as a director
and Interim Group Chief Executive on 19 November
2025. Andrew Harrison has considerable travel retail
experience and a deep understanding of the Group
and its strategy.
As part of the Company’s remediation plan
and following discussions with the Company’s
largest shareholders, the Board has also begun
a search process for strengthening the Board,
including additional North America retail expertise.
The Committee has appointed Russell Reynolds
Associates to assist in the identification of potential
candidates to replace Carl Cowling as Group Chief
Executive and in the appointment of new non-
executive directors. Russell Reynolds Associates
have signed up to the voluntary code of conduct for
executive search firms and had no other connection
to the Company or its directors.
The Committee keeps itself updated on key
developments relevant to the Company, including on
the subject of diversity and inclusion. Further information
on diversity and inclusion can be found on pages 48
and 49.
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Nominations Committee report continued
The Board believes in creating, throughout the
Company, a culture free from discrimination in any
form and is proud of its long history of being regarded
as a responsible and respected employer. The Board
believes that the benefits of a diverse workforce will
help the Company achieve its strategic objectives.
The Committee is fully committed to supporting
diversity and inclusion at Board and senior executive
level in compliance with the Code and recognises
the importance of diversity in effective decision-
making. The long-term aim is to increase the diversity
of our Board. The importance of diversity extends
beyond the Board to senior management and
throughout the Company. The Committee monitors
the progress made to increase diversity at Board and
senior management levels and compliance with
the three UK Listing Rules targets for gender and
ethnic diversity.
During the year under review, the Company had
50per cent women on the Board and 10 per cent in
the senior leadership team. The Board is committed
to strengthening the pipeline of women in senior
roles across the business and an action plan has
been agreed to take further steps to improve
workplace diversity.
The Company requires gender balanced shortlists
for all internal and external recruitment at a senior
executive level to ensure that we attract more women
at a senior level. Further information on the gender
balance of those in senior management and their
direct reports is set out in the Strategic report on
page49.
The Board recognises that diversity is not limited
to gender, but includes skills, experience, ethnicity,
disability and sexual orientation. The Board is
committed to having a diverse and inclusive
leadership team and will monitor ethnic diversity
across the Group. During the year, the Company
complied with the recommendations of the Parker
Review. Actions include the provision of mentoring,
as well as focused initiatives to better understand
the challenges faced by underrepresented groups
employed within the Company. The Company’s
recruitment policy requires that for all senior
management roles there must be a shortlist, which
includes at least one candidate from an ethnic
minority background. We will continue to appoint
onmerit, while aiming to broaden the diversity of the
talent pipeline.
The Company has a Diversity and Inclusion Committee
consisting of employees, including the Group Chief
Executive, from across the Group. The committee met
six times during the financial year ended 31 August
2025 and made recommendations on recruitment
and engaged with our customers and employees
to mark cultural and diversity-related events during
the year. The work of the Diversity and Inclusion
Committee is reported to the ESG Committee.
Further information on diversity is set out in the
People section of the Strategic report on pages
48and 49.
The Committee will continue to focus on succession
planning and talent management for key roles
across the Group, to ensure the Company develops
a pipeline of high-quality internal candidates for
senior management roles. Work is being undertaken
to ensure succession arrangements are in place for
Board members and key management.
In the coming year, Board composition and
effectiveness will be a key focus for the Committee
along with ensuring robust succession plans are
in place for the longer term to meet the needs of
the business.
Annette Court
Chair of the Nominations Committee
19 December 2025
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ESG Committee report
“Following the Company’s
strategic repositioning
toapure-play travel retailer,
wecontinue to focus on
along-term approach to
sustainability, aligned
with our purpose, strategy
andvalues.”
Situl Jobanputra
Chair of the ESG Committee
Dear Shareholder
As Chair of the ESG Committee, I am pleased to
present the report detailing the activities of the ESG
Committee for the financial year ended 31 August 2025.
Environmental and social sustainability continues to
be a fundamental part of how the Company operates
and remains a key driver of its long-term success.
The Committee met four times during the year,
receiving inputs from senior managers across the
business and regular updates from the ESG Executive
Steering Committee, which is chaired by the Group
Chief Executive. The Committee works closely with
the Audit and Remuneration Committees on relevant
ESG matters.
Work of the Committee during
thefinancial year
Throughout the year ended 31 August 2025, the
Committee undertook a thorough review of
WHSmith’s ESG strategy, assessing priorities, risks
and the measures in place to ensure effective
management and reporting. The Committee
reviewed the Company’s approach to materiality
and the resulting priority issues to ensure they are
incorporated into the Company sustainability strategy
and addressed by action plans and appropriate
objectives and targets.
Stakeholder engagement is a standing item on the
Committee’s agenda. This year, discussions focused on
feedback received from investors, proxy agencies and
key business partners such as landlords, franchisees,
and major suppliers. Topics raised included the
Company’s progress toward net zero; its position
on single use plastics and measures being taken
to reduce reliance on plastic packaging; progress
towards compliance with European legislation
on deforestation; and community partnerships.
Landlord partner interest in sustainability issues
continues to remain high.
WHSmith has committed to achieving net zero
by2050, with interim goals to reduce Scope 1 and 2
emissions by 80 per cent by 2030 (from a 2020 baseline)
and to ensure that 75 per cent of supplier emissions are
covered by science-based targets by 2027. During the
year, the Committee reviewed progress toward
these goals and the Company’s broader plans for
transitioning to a low-carbon economy. Updates were
The ESG Committee plays a vital role in overseeing the
governance of sustainability-related matters, including
the review and approval of the Company’s ESG strategy,
policies and performance.
Committee’s responsibilities
The Committee is responsible for ensuring that the
Company maintains an ESG strategy that is both
appropriate and effective. The aim is to ensure this
strategy is fully integrated with the core business
objectives and aligned with the Company’s purpose,
culture and values. The Committee ensures that
robust governance structures are in place to support
the successful execution of the sustainability strategy,
built around the three key pillars of Planet, People,
and Community.
In fulfilling its responsibilities, the Committee
considered appropriate ESG targets and key
performance indicators across short, medium and
long-term horizons. It monitors progress against
these targets regularly and provides guidance to
management on sustainability matters.
The Committee also oversees the Company’s
sustainability engagement with stakeholders, including
customers, colleagues, suppliers, communities,
investors and government. It stays informed on
external developments in the ESG landscape and
approves the Company’s sustainability disclosures in
the Annual Report, along other relevant information
for third parties. The Committee also reviews the
Company’s compliance with external standards and
ensures that its policies and principles remain aligned
with ESG best practices.
Membership and attendance
The Committee comprises a majority of independent
non-executive directors. The members of the
Committee are Colette Burke, Nicky Dulieu, Simon
Emeny and Helen Rose. The Chair and Group
Sustainability Director also attend, alongside others
from across the Company when needed.
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ESG Committee report continued
provided by the Group Sustainability Director on
carbon-related legislation and standards, including
the proposals by the UK Government for adoption
of new sustainability reporting standards; changes
in the scope and timetable for implementation of
the European Union’s (“EU”) Corporate Sustainability
Reporting Directive and evolving carbon reporting
legislation in Australia and California.
The Committee assessed climate-related risks and
opportunities, both short and long term, and reviewed
action plans to reduce Scope 1, 2 and 3 emissions. It also
evaluated the Company’s efforts to engage suppliers in
adopting science-based targets and developing carbon
reduction plans. In addition, the Committee monitored
the Company’s compliance with the Listing Rules and
the Companies Act 2006, particularly in relation to
climate-related financial disclosures and alignment
with the Task Force on Climate-related Financial
Disclosures (“TCFD”) recommendations.
The Company’s preparations are well underway
for compliance with incoming EU Deforestation
Regulations, and the Committee this year has
monitored progress on the implementation of
controls and supplier engagement activities to meet
the necessary requirements. The Committee also
received an update on Company compliance with
UKExtended Producer Responsibility regulations.
The Company’s approach to managing due diligence
processes for human rights and labour conditions in
the supply chain continues to evolve. The Committee
maintained its oversight in this area, reviewing the
Company approach to improving standards with
own brand suppliers and their supply chain, and due
diligence processes for any new third party suppliers
and/or products. The Committee also reviewed and
endorsed the Group’s Modern Slavery statement for
Board approval.
The Committee received updates on the Group’s
Diversity, Equity and Inclusion (DEI) programme,
including the activities of DEI employee networks,
executive sponsorship, and partnerships with
organisations such as Diversity in Retail, Stonewall
and the Business Disability Forum. During the year,
all employee policies were reviewed, de-biased and
updated in consultation with the employee networks
to ensure they reflected the Company’s equity and
inclusion aspirations. The Committee also reviewed
the Company’s approach to employee wellbeing
and the work of the Retail Trust as the Employment
Assistance Programme provider in the UK.
During the year, the Committee received an update
from the Group Construction Director on store
construction and refurbishment and how sustainability
considerations are integrated into decision-making.
Members reviewed the Company’s approach to energy
efficiency during construction and maintenance;
how life cycle analysis is being used to select better
options for fixtures and fittings, including for reuse and
recycling of components; and an initiative to promote
better mental wellbeing in the construction sector.
The Committee reviewed the Company’s community
engagement efforts in the UK and internationally.
It was briefed on the partnership with the National
Literacy Trust and the Young Readers Programme in
the UK. The Committee also learned about WHSmith’s
charitable work in North America with Miracle Flights;
and in Australia with the Beyond Blue and Starlight
Make a Wish Foundation charities.
Every year, the Committee reviews and approves any
updates to ESG-related policies – including those
covering environmental management, health and
safety, human rights, anti-bribery and corruption, and
codes of conduct. Changes this year included a review
of country-level risks associated with responsible
sourcing, a new Responsible construction policy and
further integration of wellbeing measures into the
Company DEI policy.
Priorities for the year ending
31August 2026
For the year ahead, the Committee will maintain its
oversight of the Group’s ESG agenda and will continue
to review emerging issues, materiality assessments,
and progress against sustainability objectives and
targets. Specific areas of focus will include:
• A review of the Company sustainability strategy with
a renewed focus on any ESG issues of relevance to
apure-play travel retailer;
• A review of progress against net zero targets and
evolution of carbon transition plans;
• Work on developing metrics to track materials use
and waste, particularly in respect of packaging and
chilled food;
• Regular updates on progress for compliance with
EU Deforestation Regulations;
• Oversight of human rights due diligence in the
supply chain, incorporating the activities of North
America and the Rest of the World businesses;
• A deep dive on the results of the employee
engagement survey to consider how the Company
values and ways of working can be further
improved and embedded within the culture
ofthe organisation. The Group will complete an
assessment of culture and behaviours to create
acultural change programme to mitigate identified
risks and embed desired change across all divisions
in the Group; and
• An update on community engagement work,
including fundraising and donation mechanics
in each of the businesses and partnerships with
charities and other community entities.
Situl Jobanputra
Chair of the ESG Committee
19 December 2025
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As announced on 21 August 2025, in preparation for
the Group’s year end results for the financial year
ended 31 August 2025, information was brought to the
Board’s attention that indicated that the recognition
of supplier income in the North America business
was being accelerated. The Board acted immediately
and appointed Deloitte to undertake an independent
and comprehensive review. The Board also formed
a Special Committee comprising of Annette Court,
Simon Emeny and Helen Rose, with the support of
Ian Houghton, to ensure appropriate transparency
and governance over the Deloitte Review and the
wider effect of the Deloitte Review on the Group.
Deloitte and the Special Committee were supported
by the Company’s external legal counsel, Freshfields
LLP. PwC also reviewed the scope of work and were
able to provide input at all stages of the independent
review. In summary, the Deloitte Review comprised
five workstreams:
• reviewing the Company’s methodology and
evaluating the evidential support underpinning
the identified overstatements in supplier income
to consider the accuracy and completeness of the
quantum and their accounting and financial impact;
• identifying and reviewing material relevant to
the identified overstatements to document the
facts and circumstances which gave rise to them,
documenting activities which do not follow the
Group’s relevant policies and procedures with
respect to accounting for supplier income and/or
which indicate potential management bias towards
particular reporting outcomes;
• reviewing systems and controls relevant to the
accounting for supplier income in the North
America division;
• reviewing and commenting on the methodology
adopted by the Group Internal Audit team to
evaluate the accuracy and existence of the level
of supplier income for the financial year ended
31 August 2025 across the Group, after correction of
the identified overstatement in the North America
division in FY25; and
• reviewing and commenting on the Quality of
Earnings Review analysis performed by the Group’s
Finance team for the North America business.
The Company announced the findings of the Deloitte
Review on 19 November 2025 which included:
• the accounting treatment for supplier income
adopted by the North America division was not
consistent with the Group’s stated accounting policy
and the relevant accounting standards;
• supplier income recognition had been overstated
inNorth America;
• the overstatement of supplier income identified
inthe North America division is substantially a
timing rather than an existence issue; and
• the methodology and conclusion of the Internal
Audit review of supplier income for the financial
year ended 31 August 2025 across the UK and ROW
Travel divisions was appropriate and that supplier
income had been appropriately recognised in
these divisions.
The Deloitte Review identified that this issue
had arisen against a backdrop of a target-driven
performance culture and decentralised divisional
structure, combined with limited level of Group
oversight of the finance processes in North
America. The following factors in North America
also contributed:
• weaknesses in the composition of the finance team;
and
• insufficient systems, controls and review procedures
for supplier income across Commercial and
Finance functions.
Scope of the Group Finance review
Alongside the Deloitte Review, the Group finance
team undertook an extensive year-end review
process for the North America business. The process
was designed to provide assurance that financial
information was not materially misstated. The scope
ofthe review comprised specified procedures,
including process flow walkthroughs and the
reperformance ofinternal review processes.
The review identified errors in the accounting for
inventory cost-related items leading to additional
restatements of prior period financial information, as
well as several process and control observations, which
form part of the remediation actions described below.
Corporate governance report continued
Deloitte and Group Finance Review
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Remediation actions
The Group appointed a new CEO for the North
America division in June 2025 and is currently in the
process of reviewing the North America leadership
team. The Group has also taken steps to strengthen
its Group Finance and Audit and Risk teams, including
the appointment of a new Group Finance Director and
Director of Audit and Risk. In addition, the Board has
put in place a comprehensive remediation plan which
will be monitored and governed by the Board and
appropriately assured to ensure that any deficiencies
are fully mitigated. This includes, but is not limited to:
• A commitment to fostering a culture of integrity,
transparency, and accountability; and empowering
teams to speak up and embed responsibility at every
level, including:
– steps have already been taken to raise awareness
of the Group’s external whistleblowing line to
ensure that employees, suppliers, and other
stakeholders have the ability to raise concerns
confidentially; and
– an assessment of culture and behaviours to
create a cultural change programme to mitigate
identified risks and embed desired change across
all divisions in the Group.
• North America division adoption of the global
supplier income policy, new governance and
controls frameworks and refreshed mandatory
training on supplier income. Mandatory training for
all commercial and finance teams across the Group
was completed in December 2025;
• Group-wide implementation of a new supplier
income management system accelerated to
early 2026;
• Finance Transformation programme accelerated to
enhance systems, processes, controls and centralise
Group Finance oversight, including:
– A centralised finance structure with global
policies, procedures and guidance cascaded
by the Group Finance team with appropriate
oversight and review; and
– A Group accounting policy manual codifying
methodologies to be deployed consistently across
the Group.
• The Group has appointed a third party assurance
provider to support internal audit to review
and validate the Group’s key financial controls
and processes;
• The Group is partnering with an external firm to
accelerate the workstreams already underway
as part of our Provision 29 (2024 Code) readiness
programme. This programme focuses on
strengthening key financial and other foundational
controls across the business;
• Ongoing consideration of actions in respect of
individuals which includes the application of malus
and clawback to recover excess amounts that had
been paid to any relevant executives in the financial
years ended 31 August 2023 and 2024 and steps
to strengthen the North America finance and
commercial teams; and
• Strengthening the Board, including additional North
America retail expertise. The Board, with the help
of an independent search firm, Russell Reynolds,
has commenced a search to identify new members
ofthe Board.
FCA investigation
We 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.
Corporate governance report continued
Deloitte and Group Finance Review continued
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Directors’ remuneration report
“We recognise that it has been
a challenging year and have taken
appropriate action but also recognise the
need to retain and motivate management
to rebuild trust and provide sustainable
financial returns for our shareholders.”
Nicky Dulieu
Chair of the Remuneration Committee
Annual statement from the Remuneration
Committee Chair
Dear Shareholder
On behalf of the Remuneration Committee (the “Committee”), I am pleased to
present the Directors’ remuneration report for the financial year ended 31 August
2025, which is in line with the Company’s approved Directors’ remuneration policy
(“Policy”). This report covers two areas:
• details of how the Policy was implemented in the financial year ended 31 August
2025 and how it will be implemented in the financial year ending 31 August 2026.
This section of the report is set out on pages 96 to 116 and is subject to an advisory
vote at our 2026 AGM; and
• a summary of the Policy approved at the 2025 AGM which is set out on pages
116to 119.
Ahead of the 2025 AGM, the Committee consulted with our largest shareholders
and their representative bodies on the Company’s approach to remuneration,
including the new Policy. I am grateful to all those who took the time to provide
feedback, which was, in the most part, supportive of the approach adopted by
the Committee. The feedback was informative for the Committee when finalising
the Policy. As a result, the Committee made changes to the proposal in respect
of bonus deferral requirements where an executive has met their shareholding
requirement. We have also received helpful feedback from shareholders in relation
to the performance measures used in our incentive plans which has been factored
into the revised structure for the next LTIP award (stated below).
The Policy was supported by 99.59 per cent of our shareholders and the Directors’
remuneration report (excluding the policy) was supported by 98.63 per cent of our
shareholders at our AGM in January 2025.
Financial performance and incentive outturns
forthefinancial year ended 31 August 2025
The Company’s performance during the financial year ended 31 August 2025 was
disappointing as it was significantly impacted by the North America accounting
issue. Further details of the findings of the Deloitte Review are set out on pages 94
to 95.
The Group made a Headline profit before tax and non-underlying items
1
of £108m.
This was below the annual bonus threshold target and, as a result, the executive
directors will not receive a bonus under the Company’s annual bonus plan.
The 2022 LTIP vesting percentage was determined by growth in the Company’s
Headline earnings per share
1
(before tax) (“EPS”), relative Total shareholder return
(“TSR”) and ESG metrics over the three-year performance period which ended on
31 August 2025. The Company did not meet the Headline EPS
1
threshold target and
the Company’s TSR ranked below median in the comparator group. Although the
Company substantially achieved the ESG metrics which would have resulted in 19.4
per cent of the award vesting, the Committee determined that this outturn would
not be appropriate in the circumstances and it was accordingly agreed with Carl
Cowling that his 2022 LTIP award would lapse in full.
1 Alternative performance measure defined and explained in the Glossary on page 209
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Directors’ remuneration report continued
Prior year incentive adjustments following
restatementof financialstatements
The Deloitte Review of supplier income in the Group’s North America division
identified expected supplier income adjustments of c.£13m for 2024 and c.£5m
for 2023. In addition, the Group has identified further adjustments in respect
ofNorth America of c.£7m for 2024 and c.£4m for 2023. These adjustments
weresubsequently audited by the Group’s auditors and restatements have
beenmade to the 2023 and 2024 financial statements as set out in Note 1b on
pages 148 to 152.
Based on the restated financial statements, executive director incentive outturns
were recalculated as follows:
• 2024 annual bonus (based on Headline profit before tax and non-underlying
items
1
): original outturn was 82.5 per cent of maximum; recalculated outturn is nil.
• 2023 annual bonus (based on Headline profit before tax and non-underlying
items
1
): original outturn was 100 per cent of maximum; recalculated outturn is
79per cent of maximum.
• 2021 LTIP (based partially on EPS): original outturn was 71 per cent of maximum;
recalculated outturn is 59 per cent of maximum.
The Committee carefully considered the facts of the North America accounting
issue and deemed it appropriate to apply the relevant malus and clawback
provisions to recover the excess amounts that had been paid to any relevant
executives in the financial years ended 31 August 2023 and 2024. The excess
amount originally awarded to Carl Cowling and former Group CFO/COO, Robert
Moorhead, in aggregate, was £887,512 in cash and 103,921 deferred bonus/
LTIP shares. To implement this decision, the Committee has resolved that any
erroneously awarded deferred bonus or LTIP shares will be cancelled and that it
will recover the excess amount that was received in cash by cancelling additional
deferred bonus and, if necessary, LTIP shares. Further details are provided on
page 106.
Board changes
Former directors
Following the Deloitte Review on 19 November 2025, Carl Cowling resigned as
Group Chief Executive with immediate effect. He remains a Group employee
until 28 February 2026 to ensure an orderly handover of his duties and, thereafter,
monthly salary payments subject to mitigation will be made for the remainder
ofhis 12-month contractual notice period.
Carl Cowling will not receive an annual bonus in respect of the financial year ended
31 August 2026 nor will he receive a 2025 LTIP award. His outstanding deferred
bonus shares are expected to be cancelled in full following the application of malus
and clawback as outlined above.
The Committee gave careful consideration as to the treatment of Carl Cowling’s
outstanding LTIP awards. While recognising the seriousness of the situation that led
toCarl’s resignation, the Committee also took into account his significant contribution
to the Group over the last 11 years, including successful navigation of the Group through
the global pandemic and his role in the strategic repositioning of the Group as a pure-
play travel retailer. The Committee’s conclusion was that Carl Cowling should retain
his outstanding LTIP awards (post application of malus and clawback as outlined on
page 106) time pro-rated up to the end of his employment and subject to performance
testing on the original dates. Any vested shares will remain subject to a two-year
holding period and Carl Cowling will be required to maintain a minimum shareholding
of 300 per cent of base salary (or his actual holding if less) for a period of two years after
he leaves the Group.
In light of the need for prior year restatements and based on his accountability
forthe Group Finance function, the Committee also revisited its previous decision
totreat Robert Moorhead as a good leaver for the purpose of his LTIP awards
and, after due consideration, concluded that this decision no longer remained
appropriate for unvested LTIP awards. Accordingly, all of Robert Moorhead’s
outstanding unvested LTIP awards will lapse. Further details are provided on
page 106.
Current directors
Following Carl Cowling’s resignation, the Committee determined the remuneration
arrangements for the interim management team. These arrangements, which
are consistent with our Policy, are designed to fairly reflect the scope and
responsibilities of the individuals’ roles, their criticality to the business and to ensure
they are both appropriately aligned with the goal of delivering long-term financial
and share price growth.
• Andrew Harrison’s salary as interim Group Chief Executive has been set at
£500,000 with an annual bonus opportunity of 150 per cent of salary and a 2025
LTIP award worth 300 per cent of salary.
• Max Izzard’s role as Group CFO has been expanded to encompass responsibility
for the remediation plan for the North America division. Max’s remuneration has
accordingly been adjusted to reflect his expanded role and will comprise a salary
of £500,000, annual bonus opportunity of 150 per cent of salary and a 2025 LTIP
award worth 350 per cent of salary.
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Directors’ remuneration report continued
Other key remuneration decisions
by the Committee during the year
• 2025 salary review – Following the annual salary review in March 2025, the
majority of the Group’s employees (who are based in stores) received a 6.5 per
cent pay increase, support centre employees received either a 2 or 2.5 per cent
pay increase and senior executives, including Max Izzard, received a 1.5 per cent
pay increase with effect from 1 April 2025. Carl Cowling’s base salary was increased
by 6 per cent.
• Adjustment of bonus/LTIP targets following the sale of the WHSmith High Street
and Funky Pigeon businesses – Following the sale of the High Street and Funky
Pigeon businesses during the financial year, the Committee agreed to adjust the
original targets set for the 2025 bonus by excluding the budgeted profit before
tax for the High Street and Funky Pigeon businesses in determining the bonus
outturn for the year. The Committee also adjusted the original targets for the
2023 and 2024 LTIP awards by excluding the budgeted contributions for the sold
businesses. The Committee, in exercising its discretion in this manner, has tried
to ensure that the new targets are not materially easier or harder to achieve than
the original targets. More details on the new targets can be found on pages 111
and 113. The Committee decided not to adjust the targets originally set for the
2022 LTIP as the vast majority of its three-year performance period had already
elapsed at the point that the businesses were sold.
• Performance measures for 2025 LTIP award – Over the last few years, the
performance measures for the LTIP have been based on EPS, relative TSR and
ESG metrics. Given the importance of this forthcoming award cycle to the
Company’s strategic development and in the context of share price performance
in the past year, the Committee has determined that the LTIP metrics for the 2025
LTIP award should be more strongly linked to our longer-term financial targets
and absolute returns to shareholders. Accordingly, for the LTIP grant in December
2025, the performance measures are:
Proportion
ofaward 40 per cent 30 per cent 30 per cent
Measure Growth in
pre-taxEPS
Growth in
absoluteTSR
Return on capital
employed
Although no longer an LTIP measure, management remains incentivised to
deliver the Group’s ambitious ESG strategy through a combination of the ESG
element of previously granted in-flight LTIP awards and personal targets within
the 2026 annual bonus plan.
• 2025 LTIP award and windfall gains – The Committee considered whether
the LTIP grant in December 2025 should be adjusted for windfall gains given
the recent fall in the Company’s share price. Given the specific share price
fact-pattern experienced by the Group and importantly the need to retain
and incentivise the new senior executive team going forward, the Committee
concluded that this should be reviewed prior to the vesting of this award in 2028.
• New plan rules – The Committee agreed to submit a new LTIP and an extension
of the Sharesave Scheme for approval by the Company’s shareholders at the 2026
AGM as the existing schemes will expire in 2026. Although the LTIP will continue
to be operated in line with the Policy approved by shareholders at the 2025 AGM,
the Committee has taken the opportunity to review the rules to ensure they reflect
current market practice and shareholder guidance and retain appropriate flexibility.
A full summary of the rules is provided in the Notice of Meeting for the 2026 AGM.
Stakeholder alignment
Notwithstanding the disappointing financial performance, the Company has
continued to support our colleagues, local communities and charitable activities –
you can read more about the Company’s work on pages 34 to 41.
The directors have proposed a final dividend of 6p per share, which, together with
the interim dividend of 11.3p per share paid in July 2025, makes a total dividend
of17.3p per share for the financial year ended 31 August 2025 (2024: 33.6p).
During FY26 we will continue to support colleagues with competitive pay and listen
carefully to feedback through continued engagement. We will work hard toensure
that we deliver business growth for the benefit of all stakeholders.
Conclusion
It has been a particularly challenging year and the Committee has been very mindful
of the difficult stakeholder experience. I hope you will agree that this isreflected in
the decisions reached by the Committee as outlined in this report totake appropriate
action in light of the stakeholder experience whilst ensuring weare able to retain and
incentivise the new senior executive team. The Committee also intends to undertake
a review of its approach to remuneration in light of the findings of Deloitte that the
the North America accounting issues arose against a backdrop of a target-driven
performance culture in the North America division.
Finally, this is my last letter to you as Chair of the Committee as I have decided
notto stand for re-election as a director at the 2026 AGM. I wish the Company well
for the future.
Nicky Dulieu
Chair of the Remuneration Committee
19 December 2025
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Directors’ remuneration report continued
This Directors’ remuneration report has been prepared in accordance with
the Large and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008, as amended in 2013, 2018 and 2019 (the “Regulations”), LR 6.6 of
the UKLA Listing Rules and the UK Corporate Governance Code 2018 (the “Code”).
1. Information subject to audit
The following information has been audited by PwC:
Section 2.5 – Summary of non-executive directors’ remuneration 2025;
Section 2.6 – Summary of executive directors’ remuneration 2025;
Section 2.8 – Payments made to former directors;
Section 2.9 – Payments for loss of office;
Section 2.11 – Annual bonus targets;
Section 2.15 – Share plans; and
Section 2.18 – Directors’ interests in shares.
2. Annual Directors’ remuneration report
The Committee presents the annual report on remuneration which, together with
the introductory letter by the Chair of the Committee on pages 96 to 98, will be put
to shareholders as an advisory vote at the forthcoming Annual General Meeting.
2.1 Remuneration Committee
Nicky Dulieu is Chair of the Committee. The other members of the Committee are
Colette Burke, Simon Emeny, Situl Jobanputra and Helen Rose. At the invitation
of the Committee, the Chair, Group Chief Executive, and the Company Secretary
may attend but exclude themselves in relation to discussions inrespect of their
own remuneration.
The Committee met six times during the year. All Committee members are
expected to attend meetings. The table on page 77 in the Corporate governance
report shows the number of meetings held during the year ended 31 August 2025
and the attendance record of individual directors. In order to avoid any conflict
of interest, remuneration is managed through well-defined processes ensuring
no individual is involved in the decision-making process related to their own
remuneration. In particular, the remuneration of all executive directors is set and
approved by the Committee; none of the executive directors are involved in the
determination of their own remuneration arrangements. The Committee also
receives support from external advisers and evaluates the support provided by
those advisers annually to ensure that advice is independent, appropriate and
cost-effective.
During the year, the Committee continued to receive advice from Deloitte LLP,
anindependent firm of remuneration consultants who were appointed in March
2024. Deloitte is a founding member of the Remuneration Consultants Group and
adheres to its code in relation to executive remuneration consulting in the UK.
Other parts of Deloitte, independent from the compensation advisory practice,
have provided support in respect of the independent review of the recognition
of supplier income accounting issue which was identified in the Group’s North
America division, tax advice, specific corporate finance support in the context
of merger and acquisition activity and unrelated corporate advisory services.
During the year, Deloitte’s executive compensation advisory practice advised
the Committee on developments in market practice, corporate governance,
institutional investor views, the development of the Company’s incentive
arrangements and the review of the Policy. Deloitte representatives also regularly
attend Committee meetings. Deloitte’s fees for advice provided to the Committee
during the year were £101,000 (excluding VAT), charged on a time and materials
basis. The Remuneration Committee is satisfied that the advice it has received has
been both objective and independent.
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Key Committee activities during the year
Alignment to strategy and
widerworkforce
Assessed the ongoing alignment of remuneration structures, measures and targets to strategy in the context of the review
ofthe Policy.
Reviewed wider workforce remuneration.
Reviewed the gender pay gap report and recommended to the Board that the gender pay gap report be published.
Agreed to submit an extension to the Sharesave Scheme for approval by the Company’s shareholders at the 2026 AGM.
Shareholder engagement The Committee Chair and Company Secretary met with major shareholders and discussed the proposed new Directors’
remuneration Policy.
The Committee considered investor feedback on remuneration, including the introduction of a new financial performance
measurefor the LTIP related to return on capital.
LTIP The Committee agreed that it should replace the ESG metrics with ROCE and the relative TSR metric with absolute TSR given the
importance of the forthcoming period to the Company’s strategic development and its focus on improving returns for shareholders.
Agreed to submit new LTIP scheme rules for approval by the Company’s shareholders at the 2026 AGM.
Pay for performance Assessed performance against bonus targets set for the financial year ended 31 August 2025 and LTIP awards granted
in the financial year ended 31 August 2023.
Reviewed and approved targets for the 2025 annual bonus and LTIP awards made in November 2024.
Governance Reviewed the application of malus and clawback.
Reviewed the progress of the executive directors against shareholding requirements.
Approved the 2024 Directors’ remuneration report.
Reviewed proxy agent commentary.
Agreed to vary the performance targets for the in-flight 2023 and 2024 LTIPs following the sale of the High Street
andFunkyPigeon businesses.
Pay/fees Approved pay rises for the Chair, Carl Cowling, Max Izzard and the senior leadership team.
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Directors’ remuneration report continued
As part of its last review of the Policy, the Committee considered the factors set out in Provision 40 of the Code. The Committee believes that the Policy addresses those
factors as set out below:
Simplicity The Policy and our approach to its implementation are simple, appropriately designed and well understood, reinforcing the Group’s
culture as well as strategy.
The Committee reviews performance metrics and targets each year to ensure that they continue to be clear and aligned to the
delivery of the strategy.
Predictability The Policy and remuneration structure have been broadly consistent over many years and the performance measures used in the
incentive plans are well aligned to the Group’s strategy and goals, with stretching targets, the maximum outcomes under any award
are clearly stated and, therefore, predictable.
Proportionality The balanced approach is proportionate and drives behaviours that promote high performance and sustainable growth to deliver
the long-term success of the Company for the benefit of all stakeholders, without encouraging or rewarding excessive risk-taking.
The Committee retains sufficient discretion to adjust formulaic incentive outcomes or require the repayment of previous awards
toensure that poor performance is not rewarded.
Risk The Committee reviews and sets performance targets each year to ensure that they drive the right behaviours and are appropriately
stretching without encouraging unnecessary risks.
Risk management is operated through annual bonus deferral, LTIP holding periods and required shareholding and post-
employment shareholding.
Malus and clawback provisions apply to the annual bonus, DBP and LTIP.
Clarity The Committee maintains a continual dialogue with shareholders and proxy agencies to understand their views. We consulted
withshareholders on remuneration arrangements, listening to, and taking into account, the feedback we received when developing
the Policy.
Our approach to disclosure is transparent with clear rationale provided on any changes to policy.
When considering remuneration for executive directors and senior management, the Committee takes into account the pay and
conditions of employees across the Group and, where appropriate, exercises oversight of remuneration throughout the Company.
Alignment to culture The Committee assesses performance under the annual bonus plan against a range of objectives, including those related to our
values and strategy.
The inclusion of ESG targets further helps to ensure incentive schemes drive behaviours consistent with Company purpose,
valuesand strategy.
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Directors’ remuneration report continued
2.2 How our Policy is linked to our strategy
Our Policy focuses on an approach to pay, which we believe is in our shareholders’ best interests and promotes the long-term success of the Company. While it provides
executive remuneration packages which are competitive, there is a very clear bias to variable pay with stretching and rigorous performance measures and targets
designed to reward the delivery of superior returns for shareholders. The table below shows how the performance measures that we use in our variable pay align
toour strategy.
Alignment to strategy Alignment to our stakeholders’ interests
Annual bonus
Headline PBT and
non-underlying
items
1
Headline PBT and non-underlying items
1
is one of our main KPIs assessing the profitability of the
Group andprovides stakeholders with information on the performance of the Group before the effect
of non-underlying items. The indicative financial outturn is subject to both potential reduction under
theassessment of personal performance, which includes behaviour and ESG-based factors and through
thebroad power to apply malus.
Shareholders and investors
ESG Management have personal objectives for the delivery of the Group’s ambitious ESG strategy. Customers and communities,
colleagues, suppliers, shareholders
and investors
LTIP
EPS EPS indicates how we are creating long-term value for our shareholders. Shareholders and investors
Absolute TSR Aligns management directly with returns for our shareholders. Shareholders and investors
ROCE Demonstrates how well management uses capital to generate profits and returns for our shareholders. Shareholders and investors
ESG The Company has an ambitious ESG strategy. Our outstanding LTIP awards contain stretching targets
inrespect of our impact on the environment, senior executive team diversity and supplier engagement.
Customers and communities,
colleagues, suppliers, shareholders
and investors
2.3 Gender pay disclosures
The Committee reviewed the gender pay gap report and recommended to the Board that the gender pay gap report be published. You can find more information on the
Company’s gender pay gap and the actions that are being implemented to reduce it on pages 48 and 49.
1 Alternative performance measure described and explained in the Glossary on page 209
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Directors’ remuneration report continued
2.4 Implementation of Policy in the financial year ending 31 August 2026
The Policy will be applied in respect of the executive directors as follows during the financial year ending 31 August 2026:
Element of pay Implementation of Policy
Executive directors
Base salary Carl Cowling resigned as Group Chief Executive on 19 November 2025. Andrew Harrison was appointed as Interim Group Chief Executive
on 19 November 2025. Max Izzard’s role as Group CFO has been expanded as outlined in the Committee Chair’s statement and his remuneration
hasbeen adjusted accordingly. Current salaries effective as of 19 November 2025 are as follows: Andrew Harrison £500,000 and Max Izzard £500,000.
Andrew Harrison and Max Izzard will not be eligible for any increase in salary from 1 April following the March 2026 annual review.
Benefits Benefits will continue to comprise the provision of a car allowance, private medical insurance and life assurance.
Pension The pension contributions are 3 per cent, in line with the wider workforce.
Annual bonus The bonus opportunity for Andrew Harrison will be 150 per cent of annual salary and for Max Izzard it will remain at 150 per cent of annual salary. It is
envisaged that the bonus metrics will continue to be based on a matrix of financial and personal performance with the financial performance measure
being Headline profit before tax and non-underlying items
1
. The financial bonus metrics will apply across the Group’s bonus plans, so that the whole
organisation is focused on delivering financial performance via the metrics that are applicable to each business. The Committee will publish the
Group targets for that financial year in next year’s report and, consistent with market practice, has elected not to pre-disclose them (or give numerical
personal objectives) on the basis of commercial sensitivity. Any bonus in excess of the on-target level will be deferred into shares if the executive director
has not met their shareholding requirements. If an executive director is already compliant with their shareholding requirement, the requirement to
defer any bonus into shares in excess of the on-target level will be reduced to 25 per cent.
Long-term
incentives
Annual LTIP awards will be 300 per cent of salary for Andrew Harrison and 350 per cent of salary for Max Izzard. The increase for Max Izzard recognises
his outstanding contribution in respect of delivering robust prior year financial statements and his expanded role in delivering the remediation plan
inNorth America.
Vesting of LTIP awards will be determined based on the following measures: 40 per cent based on EPS growth, 30 per cent based on absolute TSR
and 30 per cent based on ROCE. The EPS performance targets will be based on the growth in Headline pre-tax earnings per share. The absolute TSR
performance measure will be based on the returns received by shareholders over the performance period. The ROCE performance targets will be
based on how effectively the Company generates profits from its capital. More details on the targets are set out in section 2.15 of this report.
The Committee approved these performance measures as they are directly linked to the objectives set out in the Group’s strategy; there is a direct link
with shareholder value and there is a clear line of sight for participants between performance and reward.
The Committee retains a broad discretion to reduce vesting levels, including if it considers that there would otherwise be a windfall gain
or if management fails to deliver on the Company’s overall ESG expectations.
The Directors’ remuneration policy in respect of the Chair and non-executive directors will be applied as follows in the financial year ending 31 August 2026:
• Benefits include private medical insurance for the Chair and reimbursement of travel and subsistence costs incurred in the normal course of business by the Chair
andnon-executive directors; and
• Fees will be subject to an annual review in March 2026.
1 Alternative performance measure described and explained in the Glossary on page 209
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2.5 Summary of non-executive directors’ remuneration 2025 (audited)
The Chair received a pay increase of 1.5 per cent with effect from 1 April 2025. The current fee of the Chair of the Board is £332,920.
The fees of the non-executive directors were increased by 1.5 per cent with effect from 1 April 2025.
The current fees are £64,919 for the role of non-executive director with additional fees of:
(i) £16,230 payable for the role of Senior Independent Director (“SID”); and
(ii) £16,230 payable for being the Chair of the Audit, ESG or Remuneration Committee.
The table below summarises the total remuneration for non-executive directors as a single figure for the financial year ended 31 August 2025. Non-executive directors
arenot paid a pension and do not participate in any of the Company’s variable incentive schemes:
Base fee
£’000
Committee/SID fee
£’000
Benefits
(a)
£’000
Total
£’000
2025 2024 2025 2024 2025 2024 2025 2024
Annette Court 330 318 – – 1 – 331 318
Colette Burke 64 63 – – 1 1 65 64
Nicky Dulieu
(b)
64 63 20 25 – – 84 88
Simon Emeny 64 63 16 16 – 1 80 80
Situl Jobanputra
(c)
64 32 16 8 1 – 81 40
Helen Rose
(d)
64 11 12 – – – 76 11
Directors who resigned during 2024
Kal Atwal
(e)
– 2 – – – – – 2
Marion Sears
(f)
– 27 – 13 – – – 40
Total £’000s 650 579 64 62 3 2 717 643
a) Benefits primarily consist of travel and subsistence costs incurred in the normal course of business, in relation to meetings on Board and Committee matters and other Company events
which are considered taxable
b) Nicky Dulieu was appointed Chair of the Remuneration Committee on 7 February 2024. She stepped down as Chair of the Audit Committee on 30 November 2024
c) Situl Jobanputra was appointed as a non-executive director and Chair of the ESG Committee on 1 March 2024
d) Helen Rose was appointed as a non-executive director on 1 July 2024 and as Chair of the Audit Committee on 1 December 2024
e) Kal Atwal stepped down as a non-executive director of the Company on 12 September 2023
f) Marion Sears stepped down as a non-executive director of the Company on 7 February 2024
Directors’ remuneration report continued
1 Alternative performance measure described and explained in the Glossary on page 209
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2.6 Summary of executive directors’ remuneration 2025 (audited)
The table below summarises the total remuneration for executive directors as a single figure for the financial year ended 31 August 2025:
Salary
(a)
£’000
Benefits
(b)
£’000
Pension
(c)
£’000
Total fixed
remuneration
£’000
Annual
bonus
(d)
£’000
LTI
(e)
£’000
Total variable
remuneration
£’000
Total
remuneration
£’000
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
Carl Cowling
(g)
688 644 15 14 21 19 724 677 – 884 – 1,146 – 2,030 724 2,707
Max Izzard 340 – 10 – 1 – 351 – – – – – – – 351 –
Director who resigned during 2025
Robert Moorhead
(f)
121 476 5 14 4 14 130 504 – 637 – 811 – 1,448 130 1,952
Total £’000s 1,149 1,120 30 28 26 33 1,205 1,181 – 1,521 – 1,957 – 3,478 1,205 4,659
a) As explained in the Committee Chair’s annual statement, with effect from 1 April 2025, Carl Cowling received a salary increase of six per cent to £711,000 and Max Izzard, in line with other
senior executives, received a pay increase of 1.5 per cent to £456,750
b) Benefits relate to the provision of a car allowance, private medical insurance and life assurance
c) The pension figures in the table above for Carl Cowling and Robert Moorhead are the salary supplement received in lieu of any pension contribution into the Company’s defined
contribution pension scheme. Max Izzard participates in the Company’s defined contribution pension scheme and received a three per cent pension contribution
d) The performance measures for the annual bonus, and achievement against them are set out on pages 108 and 109. The Company did not achieve the threshold profit target for the
financial year ended 31 August 2025 and no bonuses were paid to the executive directors under the annual bonus plan
e) The performance measures for the LTIP, and achievement against them, are set out on page 111. The awards granted in November 2022 for Carl Cowling and Robert Moorhead lapsed
andwere cancelled respectively. Values for 2024 have been updated for the actual share price on the date of vesting (1,267p)
f) Robert Moorhead resigned as a director of the Company on 30 November 2024. His remuneration in the table above relates to the period to that date
g) Carl Cowling resigned as a director of the Company on 19 November 2025
h) Figures for 2024 are stated before the application of malus and clawback provisions exercised by the Committee in FY 2026
The total aggregate emoluments (excluding LTI) paid to the Board in the financial year ended 31 August 2025 was £1,922,000 and in the financial year ended
31 August 2024 was £3,345,000.
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Directors’ remuneration report continued
2.7 Application of malus/clawback to recover overpayment
Based on the restated financial statements, executive director incentive outturns
were recalculated as follows:
• 2024 annual bonus (based on Headline profit before tax and non-underlying
items
1
): original outturn was 82.5 per cent of maximum; recalculated outturn is nil.
• 2023 annual bonus (based on Headline profit before tax and non-underlying
items
1
): original outturn was 100 per cent of maximum; recalculated outturn is
79per cent of maximum.
• 2021 LTIP (based partially on EPS): original outturn was 71 per cent of maximum;
recalculated outturn is 59 per cent of maximum.
This resulted in a total overpayment to Carl Cowling of £516,000 in cash and 60,182
deferred bonus/LTIP shares and to Robert Moorhead of £372,000 in cash and 43,739
deferred bonus/LTIP shares.
The methodology for the application of malus/clawback will be as follows:
i. Where overpayment is in the form of shares, the excess number of shares will
becancelled.
ii. Where overpayment is in the form of cash, the net of tax excess cash value will
be recovered by cancellation of shares of an equivalent value, initially outstanding
deferred bonus shares followed by outstanding LTIP shares that are in their holding
period. The share price that will be used to value the shares will be the three-day
average used to calculate the number of shares awarded in the December 2025
LTIP award as opposed to the grant price at which they were issued.
More details of how malus and clawback has been applied will be set out in the
Directors’ Remuneration Report for the financial year ending 31 August 2026.
2.8 Payments made to former directors (audited)
No payments were made in the financial year ended 31 August 2025 to former
directors of the Company other than to Robert Moorhead, as disclosed in the
Summary of executive directors’ remuneration table on page 105 and the Directors’
remuneration report for the financial year ended 31 August 2024.
2.9 Payments for loss of office (audited)
Robert Moorhead stepped down as a director and Group CFO/COO on
30 November 2024 but remained as an employee of the Company until
28 February 2025 in order to assist with the transition to Max Izzard as Group CFO.
His outstanding deferred bonus shares are expected to be cancelled in full following
the application of malus and clawback provisions exercised by the Committee in
FY2026, as outlined above. In light of the requirement for prior year adjustments
and based on his accountability for the Group Finance function, the Committee
revisited its previous decision to treat Robert Moorhead as a good leaver for the
purpose of his unvested LTIP awards and, after due consideration, concluded that
this decision no longer remained appropriate for unvested LTIP awards. Accordingly,
all of Robert Moorhead’s outstanding in-flight unvested LTIP awards will lapse.
No payments were made in respect of any other director’s loss of office in the
financial year ended 31 August 2025.
1 Alternative performance measure described and explained in the Glossary on page 209
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Directors’ remuneration report continued
2.10 Assessing pay and performance
The Company’s TSR performance compared to the FTSE All Share Retailers Index since 2015 is set out in the graph below.
FTSE All Share Retailers Index
Accounting year end
0
50
100
150
200
2015 2016 2017 2019 2020 2021 2022 2023 202520242018
Total shareholder return performance since 31 August 2015
A
B
A
WH Smith PLC
B
a) The graph illustrates the TSR performance on a cumulative basis (with dividends reinvested) as at the end of each of the last ten financial years compared with the FTSE All Share Retailers
Index (the “Index”) over the same period
b) The Company is a member of the Index and, as such, this sector was considered to be the most appropriate comparator group upon which a broad equity market index is calculated
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Directors’ remuneration report continued
The table below summarises the Group Chief Executive’s remuneration and how
the Company’s variable pay plans have paid out over the past ten years.
Financial year
ended 31 August
Group Chief
Executive
Single figure
of total
remuneration
£’000
Annual bonus
(vesting versus
maximum
opportunity)
%
Long-term
incentive
(vesting
versus maximum
opportunity)
%
2025 Carl Cowling 724 – –
2024 Carl Cowling 2,707 82.5 71
2023 Carl Cowling 2,755 100 65
2022 Carl Cowling 1,632 100 –
2021 Carl Cowling 1,183 63 –
2020 – from 1
November 2019
Carl Cowling 531 – 13
2020 – until 31
October 2019
Stephen Clarke 221 – 13
2019 Stephen Clarke 3,416 100 69
2018 Stephen Clarke 2,879 93 58
2017 Stephen Clarke 4,112 98 81
2016 Stephen Clarke 5,179 100 98
Figures for 2023 and 2024 are stated before the application of malus and clawback provisions
exercised by the Committee in FY 2026
2.11 Annual bonus for the financial year ended 31 August 2025 (audited)
The performance targets used under the annual bonus plan are set to support the
Company’s strategic priorities and reinforce financial performance. The financial
performance targets are set by the Committee based on a range of factors,
principally the Company’s budget as approved by the Board. The Committee
agreed that the financial performance targets for the annual bonus plan for the
financial year ended 31 August 2025 should be based on Headline profit before tax
and non-underlying items. As explained on page 98, the Committee varied the
Company’s normal approach to determining the executive bonus outturns this
year given that the Headline profit before tax targets included the High Street and
Funky Pigeon businesses. Following the sale of these businesses, the Committee
adjusted the original targets set for the 2025 bonus by excluding the budgeted
profit before tax for the High Street and Funky Pigeon businesses in determining
the bonus outturn for the year.
Under the annual bonus plan, participants can earn a bonus based on the
achievement of a financial target and a personal rating measured against one or
more specific (financial and/or non-financial) objectives. The maximum level of
bonus paid to a participant in the plan is dependent on the achievement of both
the maximum financial target and the highest personal performance rating.
The Committee sets a threshold pay-out target and a maximum pay-out target
with straight-line vesting between the targets.
For the financial year ended 31 August 2025, save in exceptional circumstances,
no bonus was payable unless both the threshold financial target and at least
an acceptable personal rating (i.e. “Developing”) were achieved. For on-target
achievement of the profit target and a good personal rating (i.e. “Strong”), an
executive would earn 48 per cent of the maximum bonus available under the plan.
Maximum bonus opportunity for Carl Cowling was 160 per cent of salary and for
Max Izzard was 150 per cent for the financial year ended 31 August 2025. Any bonus
in excess of the on-target level will be deferred into shares if the executive director
has not met their shareholding requirements. If an executive director is already
compliant with their shareholding requirement, the requirement to defer any
bonus into shares in excess of the on-target level will be reduced to 25 per cent.
Bonuses for the financial year ended 31 August 2025 could be earned according
to the following scale (as a percentage of each executive’s respective maximum),
which is consistent with prior years. The Committee adjusted the original targets set
for the 2025 bonus by excluding the budgeted profit before tax for the High Street
and Funky Pigeon businesses in determining the bonus outturn for the year.
1 Alternative performance measure defined and explained in the Glossary on page 209
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1 Alternative performance measure defined and explained in the Glossary on page 209
Directors’ remuneration report continued
Financial performance
against Headline
Group profit before
tax and non-
underlying items
1
target Role model Outstanding Strong Developing Underachiever
Max: £152.25m 100% 80% 60% 40% 0%
Target: £145m 80% 64% 48% 32% 0%
Threshold: £137.75m 40% 32% 24% 16% 0%
Interpolation between points in the matrix is permitted
The Group’s Headline profit before tax and non-underlying items for the financial
year ended 31 August 2025 was below threshold. This performance resulted in no
bonus being paid to Carl Cowling and Max Izzard under the Company’s annual
bonus plan.
2.12 Annual change in remuneration of each director
comparedtoemployees
The table below shows the percentage changes in the remuneration of each
director (salary/fees, annual bonus and taxable benefits) from financial year to
subsequent financial year over the five financial years to 31 August 2025 compared
with the percentage changes in the average of those components of pay for UK
employees employed by the WH Smith Group over that period. The Company has
chosen to voluntarily disclose this information, given that WH Smith PLC is not an
employing company.
Salary/fee increase/(decrease)
%
Annual bonus increase/(decrease)
%
Taxable benefits increase/(decrease)
%
Financial year ended 31 August 2025 2024 2023 2022 2021 2025 2024 2023 2022 2021 2025 2024 2023 2022 2021
Carl Cowling
(a)
7 6 4 6 14 (100) (11) 4 75 100 7 (7) 7 10 –
Max Izzard
(b)
– – – – – – – – – – – – – – –
Annette Court 4 25 – – – n/a n/a n/a n/a n/a 100 – – – –
Colette Burke 2 530 – – – n/a n/a n/a n/a n/a – 100 – – –
Nicky Dulieu (5) 14 9 15 – n/a n/a n/a n/a n/a – (100) (100) 100 –
Simon Emeny 1 5 9 4 14 n/a n/a n/a n/a n/a (100) 100 – – –
Situl Jobanputra
(c)
100 – – – – n/a n/a n/a n/a n/a 100 – – – –
Helen Rose
(d)
591 – – – – n/a n/a n/a n/a n/a – – – – –
UK employees
(e)
34 9 11 8 5 (100) (2) (4) 47 100 28 3 15 (16) 3
a) Carl Cowling resigned as a director of the Company on 19 November 2025
b) Max Izzard was appointed as a director of the Company on 1 December 2024
c) Situl Jobanputra was appointed as a non-executive director on 1 March 2024
d) Helen Rose was appointed as a non-executive director on 1 July 2024
e) No bonus was payable under the Annual Bonus plan for the financial year ended 31 August 2025
109 WH Smith PLC Annual Report and Accounts 2025
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Directors’ remuneration report continued
2.13 Group Chief Executive pay compared to pay of UK employees
The ratios comparing the total remuneration of the Group Chief Executive (as
included in the single total figure of remuneration table on page 108) to the
remuneration of the 25th, 50th and 75th percentile of our UK employees are set out
below. The disclosure will build up over time to cover a rolling ten-year period.
We expect the pay ratio to vary from year to year, driven largely by the variable pay
outcome for the Group Chief Executive, which will significantly outweigh any other
changes in pay across the Group.
Group Chief Executive pay ratios
Financial year ended 31 August Method
25th
percentile
pay ratio
Median pay
ratio
75th
percentile
pay ratio
2025 Option A 30:1 27:1 18:1
2024 Option A 113:1 105:1 82:1
2023 Option A 128:1 128:1 101:1
2022 Option A 87:1 86:1 65:1
2021 Option A 70:1 70:1 52:1
2020 Option A 43:1 41:1 33:1
2019 Option A 239:1 207:1 201:1
Figures for 2023 and 2024 are based on the Group Chief Executive single figure before the
application of malus and clawback provisions exercised by the Committee in FY 2026
The Company has chosen to use Option A to calculate its Group Chief Executive pay
ratio as it believes that it is the most robust way for it to calculate the three ratios
from the options available in the Regulations.
Total remuneration for all UK full-time equivalent employees of the Company on
31 August 2025 has been calculated in line with the single figure methodology and
reflects their actual earnings received in the financial year ended 31 August 2025
(excluding business expenses). Set out in the table below is the base salary and total
pay and benefits for each of the percentiles.
£
25th
percentile
pay ratio
Median
payratio
75th
percentile
pay ratio
Salary £23,863 £26,535 £38,914
Total pay and benefits £24,267 £27,173 £40,888
The Company believes the median pay ratio for the year ended 31 August 2025
isconsistent with the pay, reward and progression policies for the Company’s UK
full-time equivalent employees. This group is the most appropriate comparator
for the Group Chief Executive as he is a full-time employee based in the UK and
approximately 79 per cent of all WHSmith employees are based in the UK.
A substantial proportion of the Group Chief Executive’s total remuneration is
performance related. The ratios will, therefore, depend significantly on his annual
bonus and LTIP outcome and may fluctuate significantly year to year. The decrease
in the pay ratios in 2025 as compared to 2024 is attributable to the reduction
invariable remuneration received by the Group Chief Executive.
2.14 Relative importance of spend on pay
The table below shows the total cost of remuneration paid to or receivable by
all employees in the Group as well as dividends paid during the financial year
ended 31 August 2025. On 11 September 2024, the Company announced a £50m
share buyback programme. During the year ended 31 August 2025, the Company
purchased and subsequently cancelled 4,463,789 of its own shares of 22
6
⁄
67
p,
representing 3.53 per cent of the issued share capital, at an average price of £11.18.
All shares purchased by the Company were cancelled.
Total cost of remuneration Distributions to shareholders
2025
£m
2024
£m % change
2025
£m
2024
£m % change
362 386 (6) 43 41 5
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Directors’ remuneration report continued
2.15 Share plans (audited)
As explained on page 98, following the sale of the High Street and Funky Pigeon
businesses, the Committee adjusted the original targets for the 2023 and 2024 LTIP
awards by excluding the originally budgeted contributions for the sold businesses.
The Committee decided not to adjust the targets originally set for the 2022 LTIP as
the vast majority of its three-year performance period had already elapsed at the
point that the businesses were sold.
In the financial year ended 31 August 2025, LTIP awards were set at 350 per cent
ofsalary for Carl Cowling and 300 per cent of salary for Max Izzard.
The adjusted performance measures for awards granted under the LTIP in
November 2024 were based on the following conditions, each measured at the end
of the three financial years to 31 August 2027:
• 45 per cent based on Headline pre-tax earnings per share (calculated on a
pre-IFRS 16 basis) of 113.7p to 135.2p with 25 per cent of this component vesting
atthreshold, increasing on a straight-line basis to 100 per cent at maximum;
• 45 per cent based on relative TSR over three financial years compared with the
FTSE All Share Retailers Index. Threshold vesting will occur for TSR in line with
median and maximum vesting will occur for TSR in line with the upper quartile
of the comparator group, consistent with prior awards. Deloitte independently
carries out the relevant TSR growth calculation for the Company; and
• 10 per cent based on the Company’s ESG strategy as set out in the following table,
with five per cent attributed to each target:
Target
Reduction in Scope 1
and2 emissions target
(tonnesCO₂e)
Scope 3 emissions:
Target engagement of
suppliers by emissions
who will have approved
science-based targets
by2027
Minimum – 25% vesting 8,491 55%
Maximum – 100% vesting 8,021 75%
The Committee regularly reviews the performance measures applicable to the
LTIP to ensure that they align with the Company’s strategy and reinforce financial
performance. The Committee may change the measures and/or targets in respect
of subsequent awards. As set out below, given the importance of this forthcoming
period to the Company’s strategic development, the Committee has determined
that the LTIP metrics for the next award cycle should be more strongly linked
toour longer-term financial targets and returns to shareholders. Accordingly,
itisproposed that the performance measures will be based on the following
targets, each measured over the three financial years ending 31 August 2028:
• 40 per cent based on Headline pre-tax earnings per share (calculated on a
pre-IFRS 16 basis) of 101p to 122p with 25 per cent of this component vesting at
threshold, increasing on a straight-line basis to 100 per cent at maximum. As in
previous years, EPS has been defined as fully diluted and before non-underlying
items and excluding IAS 19 pension charges. This target range is consistent with
the successful delivery of the three-year business plan and the Committee is
satisfied that it is significantly stretching in the current environment;
• 30 per cent based on absolute TSR growth over the performance period with nil
of this component vesting at threshold and increasing on a straight-line basis
to100 per cent at maximum. The absolute TSR targets will be set by reference
tothe one month average following the publication of the findings of the Deloitte
Review on 19 November 2025 and will require 10 per cent per annum TSR growth
at threshold increasing to 25 per cent per annum TSR growth at maximum; and
• 30 per cent based on the Company’s ROCE of 19.5 per cent to 22 per cent with
25 per cent of this component vesting at threshold, increasing on a straight-line
basis to 100 per cent at maximum.
Outstanding awards
The 2022 LTIP vesting percentage was determined by the growth in the Company’s
Headline earnings per share (before tax) (“EPS”), relative Total shareholder return
(“TSR”) and ESG metrics over the three-year performance period which ended
on 31August 2025. The Company did not meet the Headline EPS (before tax)
targets and the Company’s TSR ranked below median in the comparator group.
The Company substantially achieved the ESG metrics which would have resulted
in 19.4 per cent of the award vesting in December 2025. However, the Committee
determined that the formulaic out-turn under the LTIP was not appropriate in
the context of the Company’s performance and stakeholder experience over the
performance period and agreed that the 2022 LTIP awards received by Carl Cowling
would lapse.
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Directors’ remuneration report continued
Details of the conditional awards (in the form of nil-cost options) to acquire ordinary shares of the Company granted to executive directors are as follows. Details are stated
as at 31 August 2025 which is before the application of malus and clawback provisions and before application of the revised leaver treatment for Robert Moorhead’s LTIP
awards, which were exercised by the Committee in FY 2026:
Number of
shares subject
to awards at 31
August 2024
(a)
(or date of
appointment)
Number of
shares subject to
awards granted
during the year
Number of
dividend accrual
shares awarded
during the year
Number of
shares subject
to awards
exercised
during the year
Number of
shares subject
to awards lapsed
during the year
Number of
shares subject
to awards at
31 August 2025
(b)
(or date
ofleaving)
Share price at
date of grant
(pence)
(c)
Face value of
award at date
ofgrant
£’000
Exercise
period
Carl Cowling
(k)
LTIP 2020 82,067 – – – _ 82,067 1459.33 1,843 19.11.25 – 19.11.30
LTIP 2021
(e)
122,769 – – – 35,603 87,166 1569.00 1,926 19.11.26 – 19.11.31
DBP 2021
(d)
2,741 – 71 2,812 – – 1569.00 128 19.11.22 – 19.11.31
LTIP 2022
(f)
146,430 – – – – 146,430 1372.67 2,010 21.11.27 – 21.11.32
DBP 2022
(d)
24,516 – 633 12,575 – 12,574 1372.67 499 21.11.23 – 21.11.32
LTIP 2023
(g)
160,061 _ – – – 160,061 1306.00 2,090 16.11.28 – 16.11.33
DBP 2023
(d)
39,753 _ 1,026 13,593 – 27,186 1306.00 519 16.11.24 – 16.11.33
LTIP 2024
(h)
_ 185,744 – – – 185,744 1264.00 2,348 21.11.29 – 21.11.34
DBP 2024
(d)
_ 29,103 _ _ _ 29,103 1264.00 368 21.11.25 – 21.11.34
Total 578,337 214,847 1,730 28,980 35,603 730,331
Max Izzard
(j)
LTIP 2024 9,003 – – – – 9,003 1274.33 115 21.11.25 – 16.11.33
LTIP 2024
(h)
106,804 – – – – 106,804 1264.00 1,350 21.11.29 – 21.11.34
Total 115,807 – – – – 115,807
Robert Moorhead
(i)
LTIP 2020 60,754 – – – – 60,754 1459.33 1,364 19.11.25 – 19.11.30
LTIP 2021
(e)
86,934 – – – 25,211 61,723 1569.00 1,364 19.11.26 – 19.11.31
DBP 2021
(d)
1,781 – 47 1,828 – _ 1569.00 83 19.11.22 – 19.11.31
LTIP 2022
(f)
102,349 – – – 17,058 85,291 1372.67 1,405 21.11.27 – 21.11.32
DBP 2022
(d)
18,698  483 9,591 – 9,590 1372.67 381 21.11.23 – 21.11.32
LTIP 2023
(g)
111,877 – – – 55,939 55,938 1306.00 1,461 16.11.28 – 16.11.33
DBP 2023
(d)
30,026 _ 776 10,267 – 20,535 1306.00 392 16.11.24 – 16.11.33
DBP 2024
(d)
_ 20,960 _ _ _ 20,960 1264.00 265 21.11.25 – 21.11.34
Total 412,419 20,960 1,306 21,686 98,208 314,791
112 WH Smith PLC Annual Report and Accounts 2025
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Directors’ remuneration report continued
a) The number of shares subject to awards is the maximum (100 per cent) number of shares
that could be received by the executive if the performance targets are fully met except
that, consistent with market practice, any part of the awards which vest will benefit from
the accrual of dividend roll-up
b) No awards have been granted to directors between 1 September 2025 and
19December 2025
c) The share price used for calculating the awards at the date of grant is the average of the
middle market quotations for the Company’s ordinary shares as derived from the London
Stock Exchange Daily Official List for the three business days prior to the date of grant
d) The awards granted under the DBP will be released one third on each anniversary of the
date of grant. Details of the awards are set out above. The awards accrue the benefit of any
dividends paid by the Company and are not subject to performance conditions
In respect of the award granted on 19 November 2021 held by Carl Cowling, 2,812 shares
were exercised with a total exercise value of £35,593.42 (1,265.77p per ordinary share).
In respect of the award granted on 19 November 2021 held by Robert Moorhead, 1,828
shares were exercised with a total exercise value of £23,138.26 (1,265.77p per ordinary share).
In respect of the award granted on 21 November 2022 held by Carl Cowling, 12,575
shares were exercised with a total exercise value of £159,170.45 (1,265.77p per ordinary
share). In respect of the award granted on 21 November 2022 held by Robert Moorhead,
9,591 shares were exercised with a total exercise value of £121,399.90 (1,265.77p per
ordinary share)
In respect of the award granted on 16 November 2023 held by Carl Cowling, 13,593
shares were exercised with a total exercise value of £172,055.98 (1,265.77p per ordinary
share). In respect of the award granted on 16 November 2023 held by Robert Moorhead,
10,267 shares were exercised with a total exercise value of £129,956.50 (1,265.77p per
ordinary share)
e) The performance condition for awards granted in November 2021 under the LTIP were:
(i) 50 per cent based on the Company’s TSR performance against the FTSE All Share
Retailers Index constituents. Vesting occurred on the following basis: below median
– nil; median – 25 per cent; upper quartile – 100 per cent; and on a straight-line basis
between 25 per cent and 100 per cent; and
(ii) 50 per cent based on growth in the adjusted diluted EPS of the Company.
Vesting occurred on the following basis: below 75p – nil; 75p – 25 per cent; 110p or
more – 100 per cent; and on a straight-line basis between 25 per cent and 100 per
cent. For these purposes, EPS was determined by reference to fully diluted EPS before
exceptional items and excluded IAS 19 pension charges from the calculation, adjusted
as considered appropriate by the Committee to ensure consistency. The awards
are subject to a two-year holding period and will become exercisable on the fifth
anniversary of the date of grant
The performance conditions were substantially met with 71 per cent of the shares subject
to the awards originally vesting. As a result, the total number of shares originally vesting
for Carl Cowling was 90,418 shares, including 3,252 dividend accrual shares, and for Robert
Moorhead 64,026 shares, including 2,303 dividend accrual shares. The award is subject to a
two-year holding period. Malus and clawback has been applied and as a result the level of
vesting will be reduced to 59 per cent. For further details see page 106
f) The performance condition for awards granted in November 2022 under the LTIP were:
(i) 40 per cent based on Headline pre-tax earnings per share (calculated on a pre-IFRS
16 basis) of 100p to 125p with 25 per cent of this component vesting at threshold,
increasing on a straight-line basis to 100 per cent at maximum. EPS is defined as
fully diluted (including an assumption that the convertible bonds issued in 2020 fully
convert into shares) before exceptional items and excluding IAS 19 pension charges
together with other adjustments as considered appropriate by the Committee
(although practice has been to make limited adjustments);
(ii) 40 per cent based on relative TSR over three financial years compared with the FTSE
All Share Retailers Index. Threshold vesting will occur for TSR in line with median and
maximum vesting will occur for TSR in line with the upper quartile of the comparator
group consistent with prior awards; and
(iii) 20 per cent based on the Company’s ESG strategy
The performance conditions were partially met with 19.4 per cent of the shares subject
to awards vesting. As set out on page 111 Carl Cowling’s and Robert Moorhead’s 2022 LTIP
awards have lapsed
g) The adjusted performance condition for awards granted in November 2023 under the
LTIP were:
(i) 40 per cent based on Headline pre-tax earnings per share (calculated on a pre-IFRS
16 basis) of 104p to 125.4p with 25 per cent of this component vesting at threshold,
increasing on a straight-line basis to 100 per cent at maximum. EPS is defined as
fully diluted (including an assumption that the convertible bonds issued in 2020 fully
convert into shares) before exceptional items and excluding IAS 19 pension charges
together with other adjustments as considered appropriate by the Committee
(although practice has been to make limited adjustments);
(ii) 40 per cent based on relative TSR over three financial years compared with the FTSE
All Share Retailers Index. Threshold vesting will occur for TSR in line with median and
maximum vesting will occur for TSR in line with the upper quartile of the comparator
group consistent with prior awards; and
(iii) 20 per cent based on the Company’s ESG strategy
h) The awards granted in November 2024 under the LTIP will only vest to the extent that the
performance targets as set out on page 111 are satisfied
i) Robert Moorhead resigned as a director of the Company on 30 November 2024. He was
treated as a good leaver under the rules of the WH Smith LTIP and retained a number of
awards. In light of the findings of the Deloitte review, the Committee revisited its previous
decision to treat Robert Moorhead as a good leaver for the purpose of his LTIP awards and,
after due consideration, concluded that this decision no longer remained appropriate
in respect of unvested LTIP awards. Accordingly, all of Robert Moorhead’s outstanding
unvested LTIP awards have lapsed
j) Max Izzard was appointed as Group CFO designate on 1 September 2024. He was
appointed as a director of the Company on 1 December 2024. As part of his recruitment,
he received restricted share awards forfeited from his previous employer when he joined
WH Smith. Share awards were granted to Max Izzard on 12 September 2024 using the
three-day average of Burberry and WH Smith shares immediately prior to his start date
of 1 September 2024: a share award over 3,625 shares, in compensation for his forfeited
2022 Burberry RSU, which will vest in November 2025 subject to continued employment;
and a share award over 5,378 shares, in compensation for his forfeited 2023 Burberry RSU,
which will vest in November 2026 subject to continued employment and satisfaction of
the performance conditions applying to LTIP awards granted in the financial year ended
31 August 2024
k) Carl Cowling resigned as a director of the Company on 19 November 2025. See page 75 for
further details.
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Directors’ remuneration report continued
2.16 WH Smith Employee Benefit Trust
The WH Smith Employee Benefit Trust (the “Trust”) is used to facilitate the
acquisition of ordinary shares in the Company to satisfy awards granted under
the Company’s share plans. The Trust is a discretionary trust, the sole beneficiaries
being employees (including executive directors) and former employees of the
Group and their close relations. The Trustee is Computershare Trustees (C.I.) Limited,
an independent professional trustee company based in Jersey. The Company
intends that the ordinary shares in the Trust will be used to satisfy all outstanding
awards and options made under the Company’s share plans. The Trustee may
exercise all rights attached to the shares held in the Trust in accordance with
their fiduciary duties and the relevant plan rules or other governing documents.
The Trustee has agreed to waive its rights to all dividends payable on the ordinary
shares held in the Trust.
Following purchases of 23,816 shares in the financial year ended 31 August 2025, the
number of WH Smith PLC shares held in the Trust at 31 August 2025 was 1,758,319.
The Group’s accounting policy with respect to the Trust is detailed within Note
1 tothe financial statements (see page 144) and movements are detailed in the
Group statement of changes in equity on page 142.
2.17 Dilution limits
Awards under the LTIP are currently satisfied using market purchased shares,
which may be acquired by the Trust as described in the paragraph above.
WH Smith’s share plans comply with recommended guidelines on dilution limits,
and the Company has always operated within these limits.
2.18 Directors’ interests in shares (audited)
The beneficial interests of the directors and their immediate families in the ordinary
shares of the Company are set out below:
Number of shares subject to vesting/holding periods
(a)
Number of shares subject to
performance conditions
Number of ordinary shares DBP LTIP LTIP
(b)
31 August 2025
(or date
ofleaving)
31 August 2024
(or date of
appointment)
31 August 2025
(or date
ofleaving)
31 August 2024
(or date of
appointment)
31 August 2025
(or date
ofleaving)
31 August 2024
(or date of
appointment)
31 August 2025
(or date
ofleaving)
31 August 2024
(or date of
appointment)
Colette Burke – – – – – – – –
Annette Court 7,990 6,900 – – – – – –
Carl Cowling 61,271 45,913 68,863 67,010 169,233 82,067 492,235 429,260
Nicky Dulieu 2,500 2,500 – – – – – –
Simon Emeny 4,427 4,427 – – – – – –
Max Izzard
(c)
– – – – 3,625 3,625 112,182 112,182
Situl Jobanputra 1,250 – – – – – – –
Helen Rose – – – – – – – –
Director who resigned during the year
Robert Moorhead
(d)
221,237 209,745 51,085 50,506 122,477 60,754 141,229 301,160
a) The awards set out under this heading for the DBP are unvested nil-cost options and for the LTIP are vested but unexercised nil-cost options
b) The LTIP number shown above is the maximum potential award that may vest subject to the performance conditions described on pages 111 and 113
c) Max Izzard was appointed as Group CFO Designate on 1 September 2024 and was appointed to the Board on 1 December 2024
d) Robert Moorhead stepped down as a director and Group CFO/COO on 30 November 2024 and left the Company on 28 February 2025
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Directors’ remuneration report continued
As outlined elsewhere in this report, the Committee has made determinations
applying to directors’ interests in the form of malus and clawback provisions and
removal of good leaver status as a result of its assessment of the treatment of LTIP
awards for departing executives.
There has been no further change in the directors’ interests shown above between
1 September 2025 and 19 December 2025.
Carl Cowling is required to hold 300 per cent of salary in shares. Max Izzard is
required to hold 250 per cent of salary in shares. In accordance with the Policy,
adirector is expected to achieve compliance with the shareholding requirement
within six years of them joining the Board.
As at 31 August 2025, Carl Cowling held 187,461 shares, including shares subject
toaholding period (net of tax), with a value of £1,293,481 (approximately 182 per cent
of salary) and Max Izzard does not currently hold any shares as detailed below.
As at his date of leaving the Board on 30 November 2024, Robert Moorhead held
313,225 shares, including shares subject to a holding period (net of tax), with avalue
of £2,161,252 (approximately 447 per cent of salary).
The table below sets out the beneficial interests of the executive directors
(orany connected persons) in the ordinary shares of the Company and a summary
ofthe outstanding share awards as at 31 August 2025. Calculations are based
onashare price of 690p (being the closing share price of a WH Smith PLC share
on29 August 2025).
Shares held Awards over nil-cost options
Number of shares held
outright at 31 Aug 2025 (or
date of leaving)
Vested but not exercised
at 31 Aug 2025
1, 4
Unvested and subject to
performance measures and
continued employment
2, 4
Shareholding requirement
(%of base salary)
3
Shareholding as at 31 Aug
2025 (% ofbase salary)
4, 5
Carl Cowling
6
61,271 238,096 492,235 300% 182%
Max Izzard
7
nil nil 115,807 250% –
Robert Moorhead
8
221,237 173,562 141,229 250% 447%
1 Nil-cost options and awards that have vested but have yet to be exercised are considered to count towards the shareholding requirement, other than any such shares that correspond to the
estimated income tax and national insurance contributions that would arise on their exercise (estimated at 47 per cent of the award). For Carl Cowling, these awards include the 2020 LTIP
which vested in 2023 and the 2021 LTIP which vested in 2024 which remained subject to a two-year holding period and the 2022, 2023 and 2024 DBP awards which are subject to a holding
period as set out on page 113
2 These awards include nil-cost options granted to Carl Cowling under the 2023 and 2024 LTIP and Max Izzard under the 2024 LTIP
3 Shareholding requirement as at 31 August 2025
4 The figures above are before the application of malus and clawback provisions exercised by the Committee in FY 2026
5 Between 1 September 2025 and the date of this report, there were no other changes in the beneficial interests of the executive directors’ shareholdings
6 Carl Cowling resigned as a director of the Company on 19 November 2025. See page 75 for further details
7 Max Izzard was appointed as a director of the Company on 1 December 2024
8 Robert Moorhead resigned as a director of the Company on 30 November 2024
115 WH Smith PLC Annual Report and Accounts 2025
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Directors’ remuneration report continued
2.19 Voting at the Annual General Meeting
Statement of voting at 2025 AGM
The table below shows the voting outcome at the Annual General Meeting on 29 January 2025 for approval of the Policy and the annual directors’ remuneration report:
Resolution Votes for % for Votes against % against Total votes cast Votes withheld
Approval of Policy 94,678,938 99.59% 391,699 0.41% 95,070,637 14,499
Approval of directors’ remuneration report 93,660,064 98.63% 1,301,970 1.37% 94,962,034 123,102
A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes “for” and “against” a resolution.
3. The directors’ remuneration policy: extract
The directors’ remuneration policy was approved by shareholders at the Annual General Meeting held on 29 January 2025 and applies from that date. The directors’
remuneration policy table is set out below for information only. The full directors’ remuneration policy is set out on pages 90 to 98 of the 2024 Annual Report and Accounts
which is available in the investor relations section of the Company’s website at whsmithplc.co.uk/investors.
The following table explains the different elements of remuneration we pay to our executive directors.
Element and purpose Operation and opportunity Performance measures
Base salary
This is the basic element
of pay and reflects
the individual’s role
and position within
the Group, with some
adjustment to reflect
their capability and
contribution. Base salary
is used to attract
and retain executive
directors who can
deliver our strategic
objectives and create
shareholder value.
Base salaries, paid monthly in cash, are typically reviewed annually with any
changes normally taking effect from 1 April.
The Company’s policy is not to automatically award an inflationary increase.
When reviewing salaries, the Committee takes into account a range of factors,
including the Group’s performance, market conditions, the prevailing market
rates for similar positions in comparable companies, the responsibilities,
individual performance and experience of each executive director and the level
of salary increases awarded to employees throughout the Group.
Base salaries are benchmarked against relevant comparators, which may include
FTSE 250 companies and other leading retailers. While the Committee applies
judgement rather than setting salaries by reference to a fixed percentile position,
its general approach is to constrain base salaries to a median or lower level.
No absolute maximum has been set for executive director base salaries.
While inthe normal course, their salaries would not be expected to increase at a
rate greater than the average salary increase for other support centre staff, larger
increases may be considered appropriate in certain circumstances (including,
but not limited to, a change in an individual’s responsibilities or in the scale of
their role, or in the size and complexity of the Group). Larger increases may also
be considered appropriate if an executive director has been initially appointed
tothe Board at a lower than typical salary.
Any salary review will take into account Group
performance and individual performance, contribution
andincreasing experience.
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Directors’ remuneration report continued
Element and purpose Operation and opportunity Performance measures
Benefits
To provide other
benefits valued by the
recipient which assist
them in carrying out
their duties effectively.
Competitive benefits
assist in attracting
and retaining
executive directors.
Benefits received by executive directors currently comprise a car allowance,
staffdiscount, private medical insurance and life assurance. The Committee
mayagree to provide other benefits as it considers appropriate. There is no
formal maximum as benefit costs can fluctuate depending on changes in
provider, cost and individual circumstances.
The Company may periodically amend the benefits available to staff.
The executive directors would normally be eligible to receive such amended
benefits on similar terms to all senior staff.
The Committee reserves the right to pay relocation costs in any year or any
ongoing costs incurred as a result of such relocation to an executive director
if considered appropriate to secure the better performance by an executive
director of their duties. In the normal course, such benefits would be limited
totwo years following a relocation.
The Committee has the ability to reimburse reasonable business-related
expenses (including corporate hospitality) and any tax thereon.
None.
Pension
To aid retention and
remain competitive
within the marketplace
by providing an
appropriate level of
retirement benefit.
All executive directors are eligible to participate in the Company’s defined
contribution pension plan and/or receive a salary supplement in lieu (which is
not taken into account as salary for calculation of bonus, LTIP or other benefits).
Pension contributions (or cash in lieu) for executive directors are aligned with
the average rate available to UK-based colleagues more generally – currently
three per cent of salary but subject to periodic review.
None.
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Directors’ remuneration report continued
Element and purpose Operation and opportunity Performance measures
Annual bonus
To motivate employees
and incentivise
delivery of annual
performance targets.
During the Policy period, the maximum bonus potential is 160 per cent
ofbasesalary with target levels at 48 per cent of maximum and threshold
bonus levels at 16 per cent of maximum.
Malus and clawback provisions apply to the annual bonus plan.
Bonuses are paid in cash and/or shares. The default approach is that any
bonuspayable over target is deferred into shares for a period of up to three
years under the Company’s Deferred Bonus Plan (“DBP”) with shares being
released one-third on each anniversary of grant. The Committee has the
discretion to amend the required level of deferral, as appropriate. This level
ofdeferral can be reduced to 25 per cent of bonus earned above target in the
event that an executive director is already compliant with their in and post-
employment shareholding guidelines. The Committee also has discretion
to defer the bonus in cash where dealing restrictions prevent share awards
being granted.
The DBP will credit participants with the benefit of accrual for dividends
paidover the deferral period.
The performance measures applied may be financial or
non-financial and corporate, divisional or individual and
insuch proportions as the Committee considers appropriate.
The maximum level of bonus paid to a participant in
the plan is dependent on the achievement of both the
maximum for the financial target and the highest personal
performance rating.
In exceptional circumstances, up to 20 per cent of the
maximum bonus opportunity may be payable independent
of the financial outturn.
The appropriateness of performance measures is
reviewed annually to ensure they continue to support the
Company’s strategy.
Once set, performance measures and targets will
generally remain unaltered unless events occur which,
in the Committee’s opinion, make it appropriate to make
adjustments to ensure they operate as originally intended and
to take account of events which were not foreseen when the
performance targets were originally set.
Long-term incentives
To motivate and
incentivise delivery of
sustained performance
over the long-term,
the Group will operate
the Long-Term
Incentive Plan (“LTIP”).
Awards delivered
in shares to provide
further alignment
with shareholders.
Executive directors may be granted shares with an initial face value of up to
350 per cent of base salary in respect of a financial year under the LTIP.
The LTIP will credit participants with the benefit of accrual for dividends
paidover the performance and any holding period.
Malus and clawback provisions (in respect of both unvested and vested
paidawards) apply to the LTIP.
Awards are usually subject to a combined vesting and holding period of at
least five years preventing the delivery and sale of shares until the end of the
holding period.
Vesting of LTIP awards granted to executive directors will be
subject to satisfaction of one or more performance measures.
The Committee may set such performance measures as it
considers appropriate (whether financial or non-financial and
whether corporate, divisional or individual), usually assessed
over a period of at least three financial years.
Once set, performance measures and targets will
generally remain unaltered unless events occur which,
in the Committee’s opinion, make it appropriate to make
adjustments to the performance measures and targets,
provided that any adjusted performance measure or target
is, in its opinion, neither materially more nor less difficult
tosatisfy than the original measure or target.
Executive directors can earn up to 25 per cent of the award
forthreshold performance.
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Directors’ remuneration report continued
Element and purpose Operation and opportunity Performance measures
All-employee share plans
To encourage
share ownership by
employees, thereby
allowing them to share
in the long-term success
of the Group and align
their interests with those
of the shareholders.
Executive directors are able to participate in all-employee share plans on the
same terms as other Group employees.
In respect of the Sharesave Scheme, individuals may save up to such limit as
permitted by the relevant legislation (currently £500 each month) for a fixed
period of three years. At the end of the savings period, individuals may use their
savings to buy ordinary shares in the Company at a discount (currently of up to
20 per cent of the market price set at the launch of each scheme).
In line with the governing legislation, no performance
conditions are attached to options granted under the
Sharesave Scheme.
Notes to the Policy table
1 The Committee retains discretion to make adjustments resulting from the application of the performance measures if it considers that an adjustment is appropriate (for example, if the
outcomes are not deemed by the Committee to be a fair and accurate reflection of business performance). In the event that the Committee were to make an adjustment of this sort, a full
explanation would be provided in the next Remuneration Report
2 The Committee may amend the terms of awards granted under the share plans referred to above in accordance with the rules of the relevant plans
3 The Committee reserves the right to make any remuneration payments and/or payments for loss of office (including exercising any discretions available to it in connection with such
payments) notwithstanding that they are not in line with the Policy set out above where the terms of the payment were agreed (i) before the Policy set out above came into effect, provided
that the terms of the payment were consistent with the shareholder-approved Policy in force at the time they were agreed; or (ii) at a time when the relevant individual was not a director of
the Company and, in the opinion of the Committee, the payment was not in consideration for the individual becoming a director of the Company. For these purposes “payments” includes
the Committee satisfying awards of variable remuneration and, in relation to an award over shares, the terms of the payment are “agreed” at the time the award is granted
4 The Committee may make minor amendments to the Policy for regulatory, exchange control, tax or administrative purposes or to take account of a change in legislation, where it would,
inthe opinion of the Committee, be inappropriate to seek or await shareholder approval
On behalf of the Board
Nicky Dulieu
Chair of the Remuneration Committee
19 December 2025
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Directors’ report
The directors present their report and the audited consolidated financial
statements for the financial year ended 31 August 2025. The Company is the
ultimate parent company of the WH Smith Group of companies (the “Group”).
WH Smith PLC is registered in England and Wales (Number 5202036) and
domiciled in the United Kingdom.
The Company has chosen, in accordance with Section 414C(11) of the Companies
Act 2006, to include certain information in the Strategic report that would
otherwise be required to be disclosed in this Directors’ report, as follows:
Information Page number
Likely future developments in thebusiness 6 to 33
Branches outside the UK 26
Disclosures concerning greenhouse gas emissions and energy
consumption
42 to 64
Employment of disabled persons 49
Employee engagement 47 to 49
Engagement with external stakeholders 34 to 41
Other information, which forms part of this Directors’ report, can be found in the
following sections of the Annual report:
Section Page number
Corporate governance report 74 to 95
Directors’ biographies 72 and 73
Statement of directors’ responsibilities 125
Information on use of financialinstruments 186 to 189
This Directors’ report (including information specified above as forming part of
this report) fulfils the requirements of the Corporate governance statement for the
purposes of DTR 7.2.
The information required by UK Listing Rule 6.6.1R is disclosed on the following
pages of this Annual Report:
Subject matter Page number
Allotment of shares for cash pursuant
tothe WHSmith employee share
incentive plans
119 Directors’ remuneration report/
Note 25 on page 190 of the financial
statements
Arrangement under which the WH
Smith Employee Benefit Trust has
waived or agreed to waive dividends/
future dividends
114 Directors’ remuneration report
Dividends
The directors recommend the payment of a final dividend for the financial year
ended 31 August 2025 of 6p per ordinary share on 12 February 2026 to members
on the Register at the close of business on 23 January 2026. The final dividend and
the interim dividend of 11.3p per ordinary share paid on 31 July 2025 make a total
dividend of 17.3p per ordinary share for the financial year ended 31 August 2025
(2024: 33.6p).
Share capital
WH Smith PLC is a public company limited by shares. The issued share capital
ofthe Company, together with details of shares issued during the year, is shown
inNote 25 to the financial statements on page 190.
The issued share capital of the Company as at 31 August 2025 was 126,453,145
ordinary shares of 22
6
⁄
67
p each. These shares are listed on the London Stock
Exchange and can be held in certificated or uncertificated form.
The Company is not aware of any agreements between shareholders that may
result in restrictions on the transfer of securities and voting rights.
There are no restrictions on the transfer of ordinary shares in the Company
other than certain restrictions imposed by laws and regulations (such as insider
trading laws and market requirements relating to closed periods), including the
requirements of the UK Market Abuse Regulation and the UK Listing Rules, and
also the Company’s Share Dealing Code whereby directors and certain employees
of the Company require Board approval to deal in the Company’s securities.
120 WH Smith PLC Annual Report and Accounts 2025
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Directors’ report continued
The rights and obligations attaching to the Company’s ordinary shares, in
addition to those conferred on their holders by law, are set out in the Company’s
Articles of Association, a copy of which can be obtained from the Company’s
website whsmithplc.co.uk. The holders of ordinary shares are entitled to receive
the Company’s Annual Report and Accounts, to attend and speak at general
meetings of the Company, to appoint proxies and to exercise voting rights, and
to receive adividend, if declared, subject to the deduction of any sums due from
the holder of ordinary shares to the Company on account of calls or otherwise.
Changes totheCompany’s Articles of Association must be approved by special
resolution of the Company.
The Trustee of the WH Smith Employee Benefit Trust holds ordinary shares in
the Company on behalf of the beneficiaries of the Trust, who are the employees
and former employees of the Group. If any offer is made to the holders of ordinary
shares to acquire their shares, the Trustee will not be obliged to accept or reject the
offer in respect of any shares, which are at that time subject to subsisting options,
but will have regard to the interests of the option holders and can consult them
toobtain their views on the offer, and subject to the foregoing, the Trustee will take
the action with respect to the offer it thinks fair.
Purchase of own shares
At the 2025 AGM, authority was given for the Company to purchase, in the market, up
to 13,049,998 ordinary shares of 22
6
⁄
67
p each, renewing the authority granted at the 2024
AGM. The Company intends to renew the authority to purchase its own shares at the
forthcoming AGM as the directors believe that having the flexibility to buy back shares
is in the best interests of the Company. The directors will only exercise the authority
when satisfied that it is in the best interests of shareholders generally and that it
would result in an increase in earnings per share. On 11 September 2024, the Company
announced a £50m share buyback programme. During the year ended 31 August
2025, the Company purchased and subsequently cancelled 4,463,789 of its own shares
of 22
6
⁄
67
p, representing 3.53 per cent of the issued share capital, at an average price of
£11.18. All shares purchased by the Company were cancelled.
Issue of new ordinary shares
During the financial year ended 31 August 2025, 4,481 ordinary shares of the
Company were issued under the Sharesave Scheme at a price of 1,400p.
The Articlesof Association of the Company provide that the Board may, subject
tothe prior approval of the members of the Company, be granted authority to
exercise all the powers of the Company to allot shares or grant rights to subscribe
for or convert any security into shares including new ordinary shares.
Significant agreements/financing agreements –
changeof control
A change of control of the Company following a takeover bid may cause a number
of agreements to which the Company or its trading subsidiaries is party, such as
commercial trading contracts, banking arrangements, property leases, licence and
concession agreements, to take effect, alter or terminate. In addition, the service
agreements of some senior executives and employee share plans would be similarly
affected on a change of control, including, in the case of some employees, in relation
tocompensation for loss of office.
The Company has an unsecured £400m revolving credit facility (“RCF”) with
Barclays Bank PLC, BNP Paribas, Citibank N.A. London Branch, Fifth Third Bank
National Association, HSBC UK Bank PLC, JP Morgan Securities PLC, PNC Capital
Markets LLC, Banco Santander SA London Branch and Skandinaviska Enskilda
Banken AB (PUBL) for general corporate and working capital purposes. The last
extension option was exercised during the year, taking the maturity to 13 June
2030. If there is a change of control of the Company, and agreeable terms cannot
be negotiated between the parties, any lender may cancel the commitment under
the facility and all outstanding utilisations for that lender, together with accrued
interest, shall be immediately payable.
The Company also has a committed £120m three-year bank term loan (“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 four and five years, if
exercised. The Term Loan is provided by Fifth Third Bank National Association, HSBC
UK Bank PLC, Banco Santander SA, London PUBL. The Company has not drawn
down under the Term Loan. If there is a change of control of the Company, and
agreeable terms cannot be negotiated between the parties, any lender may cancel
the commitment under the facility and all outstanding utilisations for that lender,
together with accrued interest, shall be immediately payable.
121 WH Smith PLC Annual Report and Accounts 2025
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Directors’ report continued
The Company also has a £200m issue of US private placement (“USPP”) notes.
The USPP notes, which represent WHSmith's debut issue in the USPP market, have
a maturity of seven, ten and 12 years and have been issued on investment grade
terms. The Company has not drawn down under the terms of the USPP notes.
If there is a change of control of the Company, and agreeable terms cannot be
negotiated between the parties, any lender may cancel the commitment under
the facility and all outstanding utilisations for that lender, together with accrued
interest, shall be immediately payable.
The Company has a £327m convertible bond. The bond holders have the right to
early redemption in the event of a change of control of the Company. The Company’s
convertible bond is due for redemption in May 2026.
The Company also has a committed 12-month bank facility (from 19 November 2025)
of up to £200m with two extension options of six months and circa four months which
could, at the Company’s option, extend the tenor of the facility up to 31 August 2027.
The Term Loan is provided by BNP Paribas, JP Morgan Chase Bank, N.A., PNC Bank,
National Association and Skandinaviska Enskilda Banken AB (PUBL) for the refinancing
of the Company’s convertible bond if the Company’s USPP facility is not available for
that purpose (and noting that the term loan can only be drawn in an amount equal
to the amount not available for drawing under the Company’s USPP facility). If there
is a change of control of the Company, and agreeable terms cannot be negotiated
between the parties, any lender may cancel the commitment under the facility and all
outstanding utilisations (if drawn) for that lender, together with accrued interest, shall
on 30 days’ notice to the Company, be payable. In addition, if an event of default (such
events of default being customary for this type of facility) is outstanding, the majority
lenders may cancel the commitments under the facility and all outstanding utilisations
(if drawn), together with accrued interest, shall be immediately payable.
Directors’service contracts
Max Izzard’s service contract provides for notice of 12 months from either party.
The Chair, who has a letter of appointment, is appointed for an initial term of three
years. Her appointment may be terminated at any time by either the Company
orthe Chair on three months’ notice. The non-executive directors, who have letters
of appointment, are appointed for an initial term of three years. These appointments
can be terminated at any time by either the Company or the non-executive director
without notice. Carl Cowling resigned as Group Chief Executive and as a director
on19 November 2025. He will remain employed by the Company until 28 February
2026 to ensure an orderly handover. Andrew Harrison was appointed as a director
and Interim Group Chief Executive on 19 November 2025. His service contract
provides for notice ofsixmonths from either party.
Directors’ conflicts
The Company’s Articles of Association permit the Board to consider and, if it
sees fit, to authorise situations where a director has an interest that conflicts, or
may possibly conflict, with the interests of the Company (“Situational Conflicts”).
The Board has a formal system in place for directors to declare Situational Conflicts
to be considered for authorisation by those directors who have no interest in the
matter being considered. In deciding whether to authorise a Situational Conflict,
the non-conflicted directors must act in the way they consider, in good faith,
would be most likely to promote the success of the Company, and they may
impose limits or conditions when giving the authorisation, or subsequently, if they
think this is appropriate. Any Situational Conflicts considered by the Board, and
any authorisations given, are recorded in the Board minutes and in a register of
conflicts, which is reviewed regularly by the Board.
Directors’ indemnities
The Company maintained directors’ and officers’ liability insurance in the financial
year ended 31 August 2025 and up to the date of this report, which gives appropriate
cover for any legal action brought against its directors. The Company has provided
and continues to provide an indemnity for its directors, which is a qualifying third-
party indemnity provision for the purposes of Section 234 of the Companies Act 2006.
Company’s shareholders
Information provided to the Company pursuant to the Financial Conduct
Authority’s (“FCA”) Disclosure Guidance and Transparency Rules (“DTRs”) is
published on a Regulatory Information Service and on the Company’s website.
As at 31 August 2025, the following information had been received, in accordance
with DTR 5, from holders of notifiable interests in the Company’s issued share
capital. It should be noted that these holdings may have changed since notified
tothe Company.
122 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Holder Number
% as at date
of notification
Nature
of holding
Artemis Investment Management LLP 6,929,902 5.34 Indirect
Causeway Capital Management LLC 19,963,476 15.79 Direct
Boston Partners FKA Robeco Investment
Management Inc.
6,511,894 4.98 Direct
FMR LLC 6,428,750 4.91 Indirect
The Capital Group Companies Inc. 6,394,126 4.88 Indirect
M&G PLC 6,575,480 5.022 Indirect
Marathon Asset Management LLP 6,515,804 4.0154 Indirect
Morgan Stanley & Co. International plc 8,056,541 6.37 Indirect
Royal London Asset Management Ltd 6,539,691 4.99 Direct
Wellington Management Group LLP 3,591,763 2.84 Indirect
Wellington Management International Ltd3,591,763 2.84 Indirect
1 On 11 September 2025, Causeway Capital Management LLC notified the Company
ofaholding of 20,336,423 shares (16.08 per cent Direct holding)
2 On 2 September 2025, Morgan Stanley notified the Company of a holding of 7,354,692
shares (5.81 per cent Indirect holding)
3 On 9 September 2025, Morgan Stanley notified the Company of a holding of 6,438,317
shares (5.09 per cent Indirect holding)
4 On 10 September 2025, Morgan Stanley notified the Company of a holding of 6,462,619
shares (5.11 per cent Indirect holding)
5 On 12 September 2025, Morgan Stanley notified the Company that their total applicable
holding had dropped below 5 per cent
6 On 25 September 2025, Morgan Stanley notified the Company of a holding of 6,637,413
shares (5.24 per cent Indirect holding)
7 On 29 September 2025, Morgan Stanley notified the Company of a holding of 6,534,429
shares (5.16 per cent Indirect holding)
8 On 7 October 2025, Causeway Capital Management LLC notified the Company of a holding
of 21,668,772 shares (17.14 per cent Direct holding)
9 On 10 October 2025, Morgan Stanley notified the Company of a holding of 6,537,017 shares
(5.16 per cent Indirect holding)
10 On 16 October 2025, M&G Plc notified the Company of a holding of 6,303,525 shares
(4.98per cent Indirect holding)
11 On 31 October 2025, Causeway Capital Management LLC notified the Company
ofaholding of 22,833,856 shares (18.06 per cent Direct holding)
12 On 12 November 2025, Morgan Stanley notified the Company of a holding of 6,425,676
shares (5.08 per cent Indirect holding)
13 On 13 November 2025, Morgan Stanley notified the Company that their total applicable
holding had dropped below 5 per cent
The Company received no other notifications in the period between 31 August 2025
and the date ofthis report.
Political donations
It is the Company’s policy not to make political donations and no political donations,
contributions or political expenditure were made in the year (2024: £nil).
Going concern and viability
The Group’s business activities, together with the factors that are likely to affect its
future developments, performance and position, are set out in the Strategic report
on pages 1 to 71. The Financial review on pages 27 to 33 of the Strategic report also
describes the Group’s financial position, cash flows and borrowing facilities, further
information on which is detailed in Notes 20 to 23 of the financial statements on
pages 183 to 189.
As at 31 August 2025, the Group is in a net current liability position. In addition,
Note23 of the financial statements on pages 186 to 189 includes the Group’s
objectives, policies and processes for managing its capital; its financial risk
management objectives; details of its financial instruments and hedging activities;
and its exposures to credit risk and liquidity risk. The Strategic report on pages 65
to71 also highlights the principal risks and uncertainties facing the Group.
The directors are required to assess whether the Group can continue to operate for
a minimum of 12 months from the date of approval of these financial statements,
and to prepare the financial statements on a going concern basis. The directors
consider that the Group has adequate resources to remain in operation for the
foreseeable future and have, therefore, continued to adopt the going concern basis
in preparing the financial statements. The basis of preparation of the financial
statements and a more detailed explanation of the work undertaken in respect
ofgoing concern are set out in Note 1 of the financial statements on page 144.
The longer-term viability statement is in the Strategic report on pages 70 and 71.
Independent auditors
PwC has expressed its willingness to continue in office as auditors of the Company.
A resolution to re-appoint PwC as auditors to the Company and a resolution
toauthorise the Audit Committee to determine its remuneration will be proposed
atthe AGM.
Directors’ report continued
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Disclosure of information to the auditors
Having made the requisite enquiries, as far as each of the directors is aware, there is
no relevant audit information (as defined in Section 418 of the Companies Act 2006)
of which the Company’s auditors are unaware, and each of the directors has taken
all steps he or she ought to have taken as a director in order to make himself or
herself aware of any relevant audit information and to establish that the Company’s
auditors are aware of that information.
Annual General Meeting
The AGM of the Company will be held at the offices of Herbert Smith Freehills
Kramer LLP, Exchange House, Primrose Street, London EC2A 2EG on 2 February
2026 at 9.30am. The Notice of Annual General Meeting is given, together with
explanatory notes, in the booklet which accompanies this report.
This report was approved by the Board on 19 December 2025.
By order of the Board
Ian Houghton
Company Secretary
19 December 2025
Directors’ report continued
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Statement of directors’ responsibilities in respect of the financial statements
The directors are responsible for preparing the Annual report and financial
statements in accordance with applicable law and regulation.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors have prepared the Group financial
statements in accordance with UK-adopted international accounting standards
and the Company financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 “Reduced Disclosure Framework”, and applicable law).
Under company law, directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs of the
Group and Company and of the income statement of the Group for that period.
In preparing the financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• state whether applicable UK-adopted international accounting standards
have been followed for the Group financial statements and United Kingdom
Accounting Standards, comprising FRS 101, have been followed for the Company
financial statements, subject to any material departures disclosed and explained
in the financial statements;
• make judgements and accounting estimates that are reasonable and prudent;
and
• prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Group and Company will continue in business.
The directors are responsible for safeguarding the assets of the Group and
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The directors are also responsible for keeping adequate accounting records that
are sufficient to show and explain the Group’s and Company’s transactions and
disclose with reasonable accuracy at any time the financial position of the Group
and Company and enable them to ensure that the financial statements and the
Directors’ remuneration report comply with the Companies Act 2006.
The directors are responsible for the maintenance and integrity of the Company’s
website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in
other jurisdictions.
Directors’ confirmations
The directors consider that the Annual report and financial statements, taken as a
whole, is fair, balanced and understandable and provides the information necessary
for shareholders to assess the Group’s and Company’s position and performance,
business model and strategy.
Each of the directors, whose names and functions are listed in the Directors’
biographies, confirms that, to the best of their knowledge:
• the Group financial statements, which have been prepared in accordance with
UK-adopted international accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit of the Group;
• the Company financial statements, which have been prepared in accordance
with United Kingdom Accounting Standards comprising FRS 101, give a true and
fair view of the assets, liabilities and financial position of the Company; and
• the Strategic report includes a fair review of the development and performance
of the business and the position of the Group and Company, together with
adescription of the principal risks and uncertainties that it faces.
Andrew Harrison
Interim Group Chief Executive
Max Izzard
Group Chief Financial Officer
19 December 2025
125 WH Smith PLC Annual Report and Accounts 2025
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Independent auditors’ report to the members of WH Smith PLC
Report on the audit of the
financial statements
Opinion
In our opinion:
• WH Smith PLC’s Group financial statements and Company financial statements
(the “financial statements”) give a true and fair view of the state of the Group’s
and of the Company’s affairs as at 31 August 2025 and of the Group’s loss and the
group’s cash flows for the year then ended;
• the Group financial statements have been properly prepared in accordance with
UK-adopted international accounting standards as applied in accordance with
the provisions of the Companies Act 2006;
• the Company financial statements have been properly prepared in accordance
with United Kingdom Generally Accepted Accounting Practice (United Kingdom
Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and
applicable law); and
• the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and
Accounts 2025 (the “Annual Report”), which comprise: the Group and Company
balance sheets as at 31 August 2025; the Group income statement and Group
statement of comprehensive income; the Group cash flow statement and the
Group and Company statements of changes in equity for the year then ended;
and the notes to the financial statements, comprising material accounting policy
information and other explanatory information.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further
described in the Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK,
which includes the FRC’s Ethical Standard, as applicable to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements.
To the best of our knowledge and belief, we declare that non-audit services
prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in Note 3, we have provided no non-audit services to the
Company in the period under audit.
Our audit approach
Overview
Audit scope
• For the purposes of scoping the continuing Group audit, we have identified two
financially significant components which required a full scope audit; WH Smith
Travel Limited and North America;
• We also performed a full scope audit on WH Smith Hospitals Limited and audited
specific account balances within WH Smith Spain S.L., WH Smith Group Limited
and the Company based on the size or risk profile of those accounts. For the
discontinued operations, we performed a full scope audit over the High Street
division profit and loss and the net assets and audited specific accounts for
funkypigeon.com;
• Specific audit procedures in relation to various Group activities, including over
the consolidation, leases, share based payments, taxation, and the carrying value
of both goodwill and assets attributable to stores, were performed by the Group
team centrally;
• The audit of the North America component was performed by a component
team in the United States. The component team in the United States has also
performed specified procedures in relation to selected account balances and
classes of transactions;
126 WH Smith PLC Annual Report and Accounts 2025
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• Our audit scoping gave us coverage of approximately 80% of Group revenue; and
• We performed a full statutory audit of the Company.
Key audit matters
• Independent review and supplier income (group).
• Impairment of store property, plant and equipment, software assets and
right-of-use assets (group).
• Impairment of goodwill in North America and Rest of World (group)
andimpairment of investments in subsidiaries (Company).
• Classification and disclosure of non-underlying items (group).
• High Street and funkypigeon.com disposals (group).
Materiality
• Overall group materiality: £6,200,000 (2024: £8,400,000) based on professional
judgement considering a number of potential benchmarks (specifically revenue
and profit based benchmarks across the last 3 years).
• Overall Company materiality: £8,400,000 (2024: £8,790,000) based on 1 per cent
oftotal assets.
• Performance materiality: £4,650,000 (2024: £6,300,000) (Group) and £6,300,000
(2024: £6,590,000) (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks
ofmaterial misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement,
were of most significance in the audit of the financial statements of the current
period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including those which had
the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any
comments we make on the results of our procedures thereon, were addressed in
the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Independent review and Supplier Income, impairment of North America and Rest
of World Goodwill and the High Street and funkypigeon.com disposals are new key
audit matters this year. Inventory valuation, which was a key audit matter last year,
is no longer included as this matter was specific to the High Street business only,
which has been disposed of. Inventory valuation has been considered in the context
of the independent review in relation to matters arising in the North America
component. Otherwise, the key audit matters below are consistent with last year.
Independent auditors’ report to the members of WH Smith PLC continued
127 WH Smith PLC Annual Report and Accounts 2025
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Independent auditors’ report to the members of WH Smith PLC continued
Key audit matter How our audit addressed the key audit matter
Independent Review and supplier income (Group)
Refer to pages 6 to 7, 35, 65 and 94 to 95 of the Strategic
Report for details of the ‘Independent Review’. Refer to Note
1b (Restatement of prior year financial statements), Note 1d
(Material accounting policies – Supplier income) and Note 16
(Supplier income) in the financial statements.
In the year ended 31 August 2025, management identified
accelerated recognition of supplier income in its North
America division, which it anticipated would have a material
impact on the Group’s expected financial reporting for FY25.
The Board formed a Special Committee to respond to the
matter, which instructed an independent expert to undertake
a review (the ‘Independent Review’). This confirmed that the
accounting for the recognition of supplier income was not in
accordance with relevant accounting standards and Group
policies and culminated in a revision to the level of supplier
income to be recognised in FY25 and the identification of
similar practices in FY24 and FY23. The Board also instructed
the Group Internal Audit team to evaluate the accuracy
and existence of the level of supplier income for the current
financial year across the Group, which was reviewed by the
independent expert.
The Board concluded that there was an over-statement of
supplier income due to accelerated recognition in the North
America division only, resulting in a reduction to Group
trading profit from continuing operations of £13m for the year
ended 31 August 2024 and £5m for the year ended 31 August
2023, with a mounts principally subsequently deferred into
the year ended 31 August 2025 and future years.
The outcomes of the Independent Review, including the
revisions to the books and records of the North America
division for the accounting of supplier income in FY25, FY24
and FY23, were fully accepted and adopted by the Board and
management, with amendments made as a consequence
of immaterial errors identified through our subsequent
audit procedures.
We engaged our own independent internal forensic and external legal experts to support in assessing
the scope, the information obtained and provided to us and subsequent conclusions of the Independent
Review. We had ongoing interaction with members of the Special Committee, management, Internal
Audit, and management’s experts and advisors throughout the year end audit process.
We requested certain actions be taken by the Board as the Independent Review progressed, to enhance
that process and support us in conducting our audit.
Our audit was performed on the North America books and records that were updated for the
restatements to supplier income arising from the Independent Review and following the adjustments
from the Group Finance team review of the other financial information. The results of these adjustments
supported in mitigating the risk of management bias in the underlying financial information subject
to audit.
We additionally decreased the materiality allocated to the North America component and directed the
team to perform further specific additional specified procedures.
Supplier income
Our North America component team performed specified procedures under our direction on supplier
income for each of FY25, FY24 and FY23. We increased the extent of our oversight of these procedures,
which included performing multiple site visits during the year end audit.
Our procedures for FY25 on the other components in scope for our Group audit were conducted by the
Group engagement team.
The audit procedures focused on the cut-off assertion for the fixed value of supplier contracts, verifying
the appropriateness of recognition of supplier income and the associated deferred income, aligning to
the timing of recognition, and the valuation of associated receivables and accrued income.
These procedures included a combination of the following:
• Understanding the methodology used by management’s expert, which was adopted by the Group, to
determine the appropriate amounts of supplier income to be recognised;
• Evaluating the design and implementation of controls associated with supplier income;
• Target testing certain contracts based on their size and risk profile;
• Performing haphazard sampling and testing over the remaining population;
128 WH Smith PLC Annual Report and Accounts 2025
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Key audit matter How our audit addressed the key audit matter
Continued
As a result of the matters identified by management and
through the Independent Review, our audit considered
there to be a significant risk specifically related to the cut-off
assertion for the fixed value supplier contracts only which
impacts the timing of recognition of supplier income in the
income statement and to deferred income and the valuation
of associated receivables and accrued income. We assessed
this risk to be relevant to all components in scope for our
Group audit.
The Group Finance team also conducted a detailed review
of the financial records of the North America division to
provide the Board with assurance that risks of further material
misstatements were identified and corrected. This resulted in
additional restatements to the Group trading profit of £7m for
the year ended 31 August 2024 and £4m for the year ended
31 August 2023, primarily in relation to inventory related items.
The Independent Review also included the consideration
of matters additional to the quantum of supplier income
restatement, including the facts and circumstances which
led to the overstatement, with consideration of indications
of potential management bias towards particular reporting
outcomes, and reviewing the systems and controls
relevant to the accounting for supplier income in the North
America division.
Continued
• Testing included obtaining the contracts and assessing whether the income recognition was in line with
the contract terms, obtaining confirmations from suppliers to validate the terms of the arrangements
and, as required, the value of the income to be recognised. We evaluated all responses received to
determine if the income recognised was appropriate, including any disputes or variances identified,
ifapplicable. The confirmations process was controlled by us. Where confirmations were not received,
we evaluated other evidence to support the recognition of the supplier income;
• Testing the supplier income related balance sheet accounts for accounts receivable, accrued income
and deferred income, validating subsequent invoicing and cash receipts; and,
• Inspecting credit notes issued both during the financial year and after the year end to determine the
appropriateness of historical supplier income recognised.
Our work involved interactions with those outside the finance function, in particular the commercial
teams who negotiate and monitor supplier income arrangements to understand the nature of
arrangements, the processes relevant to the recognition of supplier income, and to identify if there
areany disputes or other issues that would warrant further investigation.
To confirm the completeness and accuracy of the prior year adjustments relating to supplier income in
North America, a combination of the above procedures was also performed for arrangements recorded
in prior years as considered necessary.
Certain adjustments were identified through our procedures which were assessed and adjusted
bymanagement where required.
Additional prior year restatements in North America
We instructed our component auditors in North America to perform additional specified procedures
to assess the accuracy of the identified prior year restatements. We also assessed the risk of further
restatements being required by considering other audit evidence including the assessments performed
by management.
For the items which were identified by management we obtained their assessment of whether they
should or should not be treated as a prior year item and either confirmed that they were indicative of
errors or changes to accounting policies or methodologies or that they were a changes in estimate
and so the impact was recognised in the current year that was appropriate. We also assessed whether
such items were material to the prior year financial statements from both a quantitative and qualitative
perspective, and whether this warranted restatement.
Given the overall findings of management’s experts and the Special Committee, we concluded that
the impact of the prior year errors were both quantitatively and qualitatively material to the users of the
financial statements and thus required restatement.
We also considered the impact of the findings, including consideration of management bias, on our
wider audit. With the support of our own forensics’ experts, we further evaluated our risk assessment and
audit approach performing additional procedures as necessary.
Independent auditors’ report to the members of WH Smith PLC continued
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Independent auditors’ report to the members of WH Smith PLC continued
Key audit matter How our audit addressed the key audit matter
Impairment of store property, plant and equipment,
software assets and right-of-use assets (group)
Refer to Note 1(a), Basis of preparation, Non-underlying items
and 1(q) Critical accounting judgements and key sources of
estimation uncertainty and Notes 11, 12 and 13 (Intangible
assets, Property, plant & equipment and Right-of-use assets).
The Group has a material operational retail asset base which
may be vulnerable to impairment in the event of trading
performance being below expectations. For the purposes of
impairment testing, each retail store is either considered to be
a separate Cash Generating Unit (CGU), or a group of stores
is considered to be a CGU where the stores do not generate
largely independent cash flows.
Management performed an impairment trigger assessment
and specific impairment indicators were identified for
certain CGUs.
The subsequent value-in-use-models resulted in the
recognition of a £53m impairment charge from continuing
operations, with £32m of the charge related to the North
America division.
This is the division we focussed on the most in our audit
procedures, and is the basis of this key audit matter. This is
due to:
the scale of investment in store assets in North America in
recent years, which is greater than that in other divisions;
• the value of the identified impairment relative to
other divisions;
• the value of the store asset base that was identified as
triggering from management’s impairment assessment
exercise; and
• the trend of the underlying profitability of this division.
Inherent judgement is involved in determining the
factors that may indicate that a CGU should be assessed
for impairment.
We obtained management’s impairment trigger assessment and assessed its methodology for
reasonableness through the following procedures:
• We considered the indicators of impairment set by management and their effectiveness in identifying
at risk retail store assets.
• We verified the underlying data points and their consistency with our other audit work performed
through a sample-based approach.
• We challenged the definition of CGUs and verified that this is appropriate based on underlying lease
contract evidence on a sample basis.
• We assessed the appropriateness of specific qualitative and quantitative factors that management
considered in determining that that a CGU would not be subject to a detailed impairment assessment.
We were satisfied that through the above procedures management’s impairment trigger assessment
was reasonable.
We obtained management’s value in use assessments for those CGUs where an impairment trigger had
been identified and audited these on a sample basis through the following procedures:
• We assessed whether management’s impairment models were in line with IAS 36.
• We verified the mathematical accuracy and integrity of the models.
• We obtained an understanding of how management had developed its forecast for the future
trading for those CGUs subject to our testing, including obtaining a detailed understanding of the key
assumptions made in developing these forecasts.
• We verified the consistency of the projections with historical performance of those CGUs as well as
management’s historical accuracy in forecasting that performance.
• We assessed the appropriateness of management’s revenue growth assumptions, verifying this to third
party evidence where available.
• With the assistance of our valuations experts, we developed an independent expectation of a
reasonable range of the discount rate and compared this to management’s rate.
• We determined whether other assumptions were reasonable and supportable to evidence provided
by management.
We were satisfied through the above procedures that the value in use models were appropriate and
complete and that assumptions used were reasonable and had been prepared with appropriate Board
involvement. As a result, we determined that the impairment charges had been appropriately calculated.
We considered the disclosure of the impairment charge as a non-underlying item and satisfied ourselves
that this is in line with management’s policy.
We were satisfied that management’s trigger assessment was appropriate to conclude that no further
impairment assessment was required.
130 WH Smith PLC Annual Report and Accounts 2025
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Independent auditors’ report to the members of WH Smith PLC continued
Key audit matter How our audit addressed the key audit matter
Impairment of Goodwill in North America and Rest
of World (group) and impairment of investments
insubsidiaries (Company)
Refer to Note 1(q) Critical accounting judgements
and key sources of estimation uncertainty and Note 11
(Intangible assets).
As at 31 August 2025, the group held a material goodwill
balance of £402m (2024: £426m) which is reviewed for
impairment at least annually or where there is an indication
that goodwill may be impaired. For the purposes of
impairment testing, each segment, being North America,
Rest of World (‘RoW’) and UK is considered a separate Cash
Generating Unit (CGU) for which a value in use model is
prepared to determine the recoverable amount.
Goodwill may be vulnerable to impairment in the event of
trading performance being below expectations and there is
inherent judgement involved in determining the factors that
may indicate that a CGU should be impairment.
We focussed our audit procedures on the North American
and Rest of World CGUs, and therefore this is the basis of
this key audit matter. This is due to both segments being
sensitive to changes in certain key assumptions, namely
revenue growth.
The value in use model for both segments evidenced that
the recoverable amount of these CGUs exceeded their
carrying value and therefore no impairment was recorded
by management.
The Company had an £835m investment in subsidiary
undertakings. There is a risk that the value of the subsidiary
undertakings is not sufficient to support the carrying value of
the investment and the asset may be impaired.
We obtained management’s value in use models for the North America and RoW CGUs and audited
each model through the following procedures.
• We assessed whether management’s impairment models were in line with IAS 36.
• We verified the mathematical accuracy and integrity of the models.
• We obtained an understanding of how management had developed its forecast for the future trading
of these two CGUs, including obtaining a detailed understanding of the key assumptions made in
developing these forecasts, including revenue growth assumptions, verifying to third party evidence
where available.
• We verified the consistency of the projections with historical performance of those CGUs as well as
management’s historical accuracy in forecasting their performance, including the degree to which
variances noted could have been forecast in advance.
• With the assistance of our valuations experts, we developed an independent expectation of a
reasonable range of the discount rate and compared this to management’s rate.
• We determined whether other assumptions were reasonable and supportable to evidence provided
by management.
We found that the group’s impairment model supported the carrying value of the North America and
RoW goodwill balance and was based on reasonable assumptions. We note that the headroom in the
impairment model is sensitive to changes in a number of assumptions in the model, but primarily
revenue growth.
We also evaluated the group’s disclosures and sensitivity analysis in note 11 to the group financial
statements which states that any reasonable possible change to the revenue and EBITDA growth
assumptions in RoW could result in an impairment. We consider these disclosures to be appropriate.
For the Company investments in subsidiary undertakings, we evaluated management’s trigger
assessment, with specific consideration given to the market capitalisation of the Group, which is
significantly in excess of the net assets of the group which therefore did not indicate an impairment
trigger. We also considered those other factors that management had identified as potential indicators
of impairment.
We were satisfied that management’s trigger assessment was appropriate to conclude that no further
impairment assessment was required.
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Key audit matter How our audit addressed the key audit matter
Classification and disclosure of non-underlying items (group)
Refer to Note 1(a), Basis of preparation, Non-underlying items and 1(q) Critical
accounting judgements and key sources of estimation uncertainty, Non-underlying
items and Note 4 Non-underlying items.
The Group has presented an alternative performance measure of “Headline Group
profit before tax and non-underlying items” of £108m (2024 restated: £114m) which
is derived from statutory Group profit before tax of £2m (2024 restated: £65m)
adjusted to remove the impact of IFRS 16 of £14m (2024 restated: £8m) and non-
underlying items of £92m (2024 restated: £41m). Management considers that these
items meet their definition of a ‘non-underlying item’.
We focused on this area during our audit, and consider it a key audit matter, due to
the quantum and number of categories of non-underlying items in the year driven
primarily by the store impairments, and the continuation and expansion of business
wide transformation and restructuring programmes.
Our work focussed on consistency of treatment and the classification of items in
accordance with management’s policy.
We assessed management’s policy with reference to guidance published by the
European Securities and Markets Authority (ESMA) and the Financial Reporting
Council (FRC) and satisfied ourselves that categories identified as non-underlying
items are consistent with management’s policy.
To verify the consistency, we conducted tests on a sample of items, tracing them
back to supporting evidence to test the accuracy of the costs as well as their nature.
We assessed the nature and completeness of management’s disclosures within
the financial statements to verify that they accurately reflected the types of costs
included in each category.
Based on our work, we satisfied ourselves that the treatment of non-underlying
items is consistent with the Group’s policy, and the presentation and disclosure
are appropriate.
High Street and funkypigeon.com disposal (group)
Refer to Note 8 Discontinued operations.
On 30 June 2025, the group completed the sale of its High Street division to Modella
Capital for cash consideration of £10m and additional contingent consideration
measured at fair value through profit and loss. There were two elements to the
contingent consideration; one related to a share of future cash flows generated by
the divested business through to 31 August 2026 and the other is dependent on the
timing and realisation of deferred tax assets within the disposed business.
Subsequently, on 15 August 2025, the group completed the sale of funkypigeon.
com to Card Factory for cash consideration of £25m.
Given the judgement involved in calculating the contingent consideration for
the High Street, we have identified a heightened risk over the valuation of this
consideration. Given the significance of the High Street division to the overall group
and the level of disclosure in the financial statements, significant audit effort has
been spent in this area and was, therefore, determined to be a key audit matter.
We tested the cash consideration by verifying the cash received to bank
statements. For the contingent consideration, we tested this by
• reading the signed sale and purchase agreements (“SPAs”);
• verifying that management’s calculation for this estimate was in line with IFRS3;
• testing these amounts back to supporting documentation where possible;
• assessing management’s assumptions for reasonableness when estimating this
balance; and
• assessing events after the balance sheet date which impact
management’s estimate.
We audited the carrying amount of the High Street net assets disposed as included
and disclosed in note 8 to the financial statements as well as the High Street profit
included in the profit from discontinued operations within the Group income
statement. We tested associated transaction costs.
We also considered the adequacy of the group’s disclosures in respect of the
disposed operations.
Based on the procedures performed, we consider the estimated value of the
contingent consideration to be reasonable and the disclosures to be appropriate.
Independent auditors’ report to the members of WH Smith PLC continued
132 WH Smith PLC Annual Report and Accounts 2025
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How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work
to be able to give an opinion on the financial statements as a whole, taking into
account the structure of the group and the Company, the accounting processes
and controls, and the industry in which they operate. For the purposes of scoping
the continuing Group audit we have performed a full scope audit on two financially
significant components (WH Smith Travel Limited and North America) and
one other component (WH Smith Hospital Limited). All full scope audits were
performed by the UK Group team, except for North America, which was audited
by a component auditor in the United States operating under our instruction.
The United States component team also performed specified procedures over
supplier income, provisions within inventory, accounts receivable and accounts
payable balances (including procedures to validate the impact on prior periods)
and tax in the North America component. The UK Group team assessed and
concluded on the appropriateness of management’s judgements within supplier
income, provisions within inventory, accounts payable and accounts receivable
balances (considering the results of the specified procedures). Audit work was
performed over the consolidation process, tax (considering the results of the
specified procedures), impairment, leases, share based payments and going
concern at a UK Group level. Where the work was performed by the component
auditor, we determined the level of involvement we needed to have in their audit
work to be able to conclude whether sufficient audit evidence had been obtained
as a basis for our opinion on the Group financial statements as a whole. We held
detailed discussions with the North America component audit team, including
performing multiple site visits, in person review of the work performed, update calls
on the progress of their fieldwork and by attending the clearance meetings with
management. The components where we performed audit work accounted for
approximately 80% of revenue from continuing operations. We performed audit
procedures over specific financial statement line items within WH Smith Spain
S.L., WH Smith Group Limited and the Company components based on the size
or risk profile of those accounts. For the discontinued operations, we performed a
full scope audit over the disposed High Street division’s profit and loss and the net
assets and audited specific accounts for funkypigeon.com based on relative value
to the consolidated balances. We have also performed a statutory audit over the
Company financial statements using a stand alone materiality.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the process
management adopted to assess the extent of the potential impact of climate risk
on the Group’s financial statements and support the disclosures made within the
Strategic Report.
We challenged the completeness of management’s climate risk assessment by
reviewing the consistency of management’s climate impact assessment with
internal climate plans and board minutes, including whether the time horizons
management has used take account of all relevant aspects of climate change.
Management considers that the impact of climate change does not give rise to a
material financial statement impact. We considered the impairment of store assets,
goodwill, investments and going concern to potentially be materially impacted
by climate change and consequently we focused our audit work in these areas.
In particular, we challenged management on how the impact of their climate
commitments would impact the assumptions within the cash flows used for the
impairment analysis. In addition, we ensured that the going concern and viability
assessments were also consistent with management’s view of the impact of
climate change.
We also considered the consistency of the disclosures in relation to climate change
(including the disclosures in the Task Force on Climate-related Financial Disclosures
(TCFD) section) within the Annual Report and our knowledge obtained from
our audit.
Materiality
The scope of our audit was influenced by our application of materiality. We set
certain quantitative thresholds for materiality. These, together with qualitative
considerations, helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual financial statement
line items and disclosures and in evaluating the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Independent auditors’ report to the members of WH Smith PLC continued
133 WH Smith PLC Annual Report and Accounts 2025
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Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group Financial statements – Company
Overall materiality £6,200,000 (2024: £8,400,000). £8,400,000 (2024: £8,790,000).
How we determinedit professional judgement considering a number of potential
benchmarks (specifically revenue and profit based benchmarks
across the last 3 years).
1 per cent of total assets
Rationale for
benchmarkapplied
As noted above, we considered a range of benchmarks for
determining materiality. We selected a level of materiality that was
within a range of outcomes suggested by these benchmarks and
reflected an appropriate adjustment given the reduced profitability
in the current year as well as the sale of the High Street business.
WH Smith PLC is a holding company for the Group and therefore the
materiality benchmark has been determined based on total assets,
which is a generally accepted auditing benchmark.
Independent auditors’ report to the members of WH Smith PLC continued
For each component in the scope of our group audit, we allocated a materiality that
is less than our overall group materiality. The range of materiality allocated across
components was between £3.45 million and £5.6 million. Certain components
were audited to a local statutory audit materiality that was also less than our overall
group materiality.
We use performance materiality to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
exceeds overall materiality. Specifically, we use performance materiality in
determining the scope of our audit and the nature and extent of our testing
of account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% (2024: 75%) of
overall materiality, amounting to £4,650,000 (2024: £6,300,000) for the group
financial statements and £6,300,000 (2024: £6,590,000) for the Company
financial statements.
In determining the performance materiality, we considered a number of factors
- the history of misstatements, risk assessment and aggregation risk and the
effectiveness of controls - and concluded that an amount at the upper end of our
normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements
identified during our audit above £310,000 (group audit) (2024: £420,000) and
£420,000 (Company audit) (2024: £439,000) as well as misstatements below those
amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the Company’s
ability to continue to adopt the going concern basis of accounting included:
• assessing the historical accuracy of management’s forecasts and performing
a sensitivity on the revenue and EBITDA growth assumptions to erode the
covenant headroom;
• obtaining and reviewing the Group’s financing agreements including any
waivers in place as a result, engaging our experts as part of the assessment of the
sufficiency of these waivers;
• inquiring with management and its experts on the impact of any potential
breach in laws and regulations on the financing arrangements;
• considering the assumptions made regarding the extent of an economic
downturn in the severe but plausible downside case to historical actuals and
external sources;
• assessing management’s reverse stress test; and
• confirming that consistent approaches to going concern, viability, impairment
and other key areas of estimation assumptions have been used.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or collectively, may
cast significant doubt on the group’s and the Company’s ability to continue as
a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
134 WH Smith PLC Annual Report and Accounts 2025
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Independent auditors’ report to the members of WH Smith PLC continued
In auditing the financial statements, we have concluded that the directors’ use
of the going concern basis of accounting in the preparation of the financial
statements is appropriate.
However, because not all future events or conditions can be predicted, this
conclusion is not a guarantee as to the group’s and the Company’s ability to
continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in relation
to the directors’ statement in the financial statements about whether the directors
considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going
concern are described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other
than the financial statements and our auditors’ report thereon. The directors are
responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit
opinion or, except to the extent otherwise explicitly stated in this report, any form of
assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If we identify an
apparent material inconsistency or material misstatement, we are required to
perform procedures to conclude whether there is a material misstatement of the
financial statements or a material misstatement of the other information. If, based
on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to
report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we also considered
whether the disclosures required by the UK Companies Act 2006 have
been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006
requires us also to report certain opinions and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the
information given in the Strategic report and Directors’ report for the year ended
31 August 2025 is consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and Company and their
environment obtained in the course of the audit, we did not identify any material
misstatements in the Strategic report and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has
been properly prepared in accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going
concern, longer-term viability and that part of the corporate governance statement
relating to the Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review. Our additional responsibilities with
respect to the corporate governance statement as other information are described
in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the corporate governance statement is materially
consistent with the financial statements and our knowledge obtained during the
audit, and we have nothing material to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the
emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what
procedures are in place to identify emerging risks and an explanation of how
these are being managed or mitigated;
• The directors’ statement in the financial statements about whether they
considered it appropriate to adopt the going concern basis of accounting in
preparing them, and their identification of any material uncertainties to the
group’s and Company’s ability to continue to do so over a period of at least twelve
months from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of the group’s and Company’s
prospects, the period this assessment covers and why the period is appropriate; and
135 WH Smith PLC Annual Report and Accounts 2025
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• The directors’ statement as to whether they have a reasonable expectation that
the Company will be able to continue in operation and meet its liabilities as
they fall due over the period of its assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of
the group and Company was substantially less in scope than an audit and only
consisted of making inquiries and considering the directors’ process supporting
their statement; checking that the statement is in alignment with the relevant
provisions of the UK Corporate Governance Code; and considering whether the
statement is consistent with the financial statements and our knowledge and
understanding of the group and Company and their environment obtained in the
course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded
that each of the following elements of the corporate governance statement is
materially consistent with the financial statements and our knowledge obtained
during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole,
is fair, balanced and understandable, and provides the information necessary
for the members to assess the group’s and Company’s position, performance,
business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk
management and internal control systems; and
• The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the
directors’ statement relating to the Company’s compliance with the Code does not
properly disclose a departure from a relevant provision of the Code specified under
the Listing Rules for review by the auditors.
Responsibilities for the financial statements
andtheaudit
Responsibilities of the directors forthefinancialstatements
As explained more fully in the Statement of directors’ responsibilities in respect of
the financial statements, the directors are responsible for the preparation of the
financial statements in accordance with the applicable framework and for being
satisfied that they give a true and fair view. The directors are also responsible for
such internal control as they determine is necessary to enable the preparation
offinancial statements that are free from material misstatement, whether due
tofraud or error.
In preparing the financial statements, the directors are responsible for assessing
the group’s and the Company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the group or the
Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due
to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the
principal risks of non-compliance with laws and regulations related to GDPR,
employment law and the UK Listing Rules, and we considered the extent to which
non-compliance might have a material effect on the financial statements. We also
considered those laws and regulations that have a direct impact on the financial
statements such as the Companies Act 2006 and tax regulations. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the
financial statements (including the risk of override of controls), and determined that
the principal risks were related to manipulation of revenue and management bias
in accounting estimates. The group engagement team shared this risk assessment
with the component auditors so that they could include appropriate audit
procedures in response to such risks in their work. Audit procedures performed by
the group engagement team and/or component auditors included:
Independent auditors’ report to the members of WH Smith PLC continued
136 WH Smith PLC Annual Report and Accounts 2025
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Independent auditors’ report to the members of WH Smith PLC continued
• Reviewing the financial statement disclosures and agreement to underlying
supporting documentation;
• Enquiring of management, those charged with governance, internal audit, and
internal legal counsel regarding instances of non-compliance with laws and
regulations and fraud;
• Reviewing internal audit reports, whistleblowing reports and minutes of meetings
of those charged with governance;
• Engaging with management’s experts and considering the findings of the
independent review;
• Challenging management on their application of the relevant accounting
standards with regards to recognition of fixed supplier income as noted in our key
audit matter;
• Identifying and testing unusual journals posted to revenue; and
• Challenging assumptions made by management in determining their significant
judgements and accounting estimates.
There are inherent limitations in the audit procedures described above. We are less
likely to become aware of instances of non-compliance with laws and regulations
that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional misrepresentations,
or through collusion.
Our audit testing might include testing complete populations of certain
transactions and balances, possibly using data auditing techniques. However, it
typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing
based on their size or risk characteristics. In other cases, we will use audit sampling
to enable us to draw a conclusion about the population from which the sample
is selected.
A further description of our responsibilities for the audit of the financial statements
is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the
Company’s members as a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and for no other purpose. We do not, in giving these opinions,
accept or assume responsibility for any other purpose or to any other person to
whom this report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our
audit; or
• adequate accounting records have not been kept by the Company, or returns
adequate for our audit have not been received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the Company financial statements and the part of the Directors’ remuneration
report to be audited are not in agreement with the accounting records
and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the
members on 21 January 2015 to audit the financial statements for the year ended
31 August 2015 and subsequent financial periods. The period of total uninterrupted
engagement is 11 years, covering the years ended 31 August 2015 to 31 August 2025.
Other matter
The Company is required by the Financial Conduct Authority Disclosure Guidance
and Transparency Rules to include these financial statements in an annual financial
report prepared under the structured digital format required by DTR 4.1.15R -
4.1.18R and filed on the National Storage Mechanism of the Financial Conduct
Authority. This auditors’ report provides no assurance over whether the structured
digital format annual financial report has been prepared in accordance with
those requirements.
Jonathan Sturges (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors London
19 December 2025
137 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Group income statement
For the year ended 31 August 2025
2025
2024 (restated
1
)
£m
Note
items
2
items
3
items
2
items
3
Revenue
2
1,553
–
1 ,553
1 , 47 3
–
1 , 47 3
Group operating profit/(loss) – continuing operations
2, 3
148
(99)
49
154
(41)
113
Finance costs
6
(46)
(1)
(47)
(4 8)
–
(4 8)
Profit/(loss) before tax – continuing operations
102
(100)
2
106
(41)
65
Income tax (expense)/credit
7
(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
8
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
Basic
10
(24.4)
28 .7
Diluted
10
(24.4)
28.2
Basic
10
(113.4)
41.9
Diluted
10
(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 8 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 209
3 See Note 4 for an analysis of non-underlying items. See Glossary on page 209 for a definition of alternative performance measures
138 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

£m
Note
2025
(restated
1
)
(Loss)/profit for the year
(137)
60
– Remeasurement of the recoverability of retirement benefit surplus
28
–
87
– Actuarial gains on defined benefit pension schemes
–
2
–
89
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
– 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 8 for further details)
Group statement of comprehensive income
For the year ended 31 August 2025
139 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Group balance sheet
As at 31 August 2025
£m
Note
2025
(restated
1
)
(restated
1
)
Goodwill
11
402
426
436
Other intangible assets
11
45
64
69
Property, plant and equipment
12
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
28
1
–
–
Deferred tax assets
19
16
37
45
Trade and other receivables
14
25
24
19
1,116
1 , 3 74
1,285
Inventories
148
209
201
Trade and other receivables
14
102
126
101
Retirement benefit surplus
28
–
87
–
Derivative financial asset
–
–
1
Current tax receivable
23
2
3
Cash and cash equivalents
20
71
56
56
344
4 80
362
Total assets
1,460
1,854
1,64 7
Trade and other payables
15
(318)
(361)
(344)
Bank overdrafts and other borrowings
20
(461)
(117)
(84)
Lease liabilities
17
(90)
(125)
(116)
Derivative financial liabilities
–
–
(1)
Current tax payable
(1)
(1)
(1)
Short-term provisions
18
(1)
(4)
(1)
(871)
(608)
(54 7)
£m
Note
2025
(restated
1
)
(restated
1
)
Bank loans and other borrowings
20
–
(310)
(301)
Long-term provisions
18
–
(13)
(16)
Lease liabilities
17
(394)
(501)
(450)
Deferred tax liabilities
19
(7)
–
–
(401)
(824)
(767)
Total liabilities
(1,272)
(1,43 2)
(1, 314)
Total net assets
188
422
333
Called up share capital
24
28
29
29
Share premium
316
316
316
Capital redemption reserve
27
14
13
13
Translation reserve
(15)
(9)
5
Other reserves
27
(254)
(268)
(255)
Retained earnings
69
315
202
holders of the parent
158
396
310
Non-controlling interests
30
26
23
Total equity
188
42 2
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 assets (refer to Note 1b for further details)
The consolidated financial statements of WH Smith PLC, registered number
5202036, on pages 138 to 203 were approved by the Board of Directors and
authorised for issue on 19 December 2025 and were signed on its behalf by:
Andrew Harrison Max Izzard
Interim Group Chief Executive Chief Financial Officer
140 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Group cash flow statement
For the year ended 31 August 2025
£m
Note
2025
(restated
1
)
Cash generated from continuing operations
22
330
249
Interest paid
2
(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
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)
Dividends paid
9
(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
20
24
33
Capital repayments of obligations under leases
3
20
(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
20
71
56
1 Comparative periods have been restated to separately disclose results from discontinued operations (refer to Note 8 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)
141 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Group statement of changes in equity
For the year ended 31 August 2025
reserve
2
reserves
2
Balance at 1 September 2024 – restated
1
345
13
(9)
(268)
315
396
26
422
(Loss)/profit for the year – total operations
–
–
–
–
(144)
(144)
7
(137)
Exchange differences on translation offoreign operations
–
–
(6)
–
–
(6)
(3)
(9)
Total comprehensive (loss)/income forthe year
–
–
(6)
–
(144)
(150)
4
(146)
Employee share schemes
–
–
–
–
5
5
–
5
Dividends paid (Note 9)
–
–
–
–
(43)
(4 3)
–
(43)
Share repurchase
(1)
1
–
–
(50)
(50)
–
(50)
Distributions to non-controlling interest
–
–
–
–
–
–
(7)
(7)
Non-cash movement on non-controlling interests
–
–
–
–
–
–
7
7
Disposals of businesses
–
–
–
14
(14)
–
–
–
Balance at 31 August 2025
344
14
(15)
(254)
69
158
30
188
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)
2 For further explanation and analysis of Capital redemption reserve and Other reserves, see Note 27
142 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Group statement of changes in equity continued
For the year ended 31 August 2024
reserve
2
reserves
2
Balance at 1 September 2023 – restated
1
345
13
5
(255)
202
310
23
333
Profit for the year – total operations
1
–
–
–
–
54
54
6
60
–
–
–
–
87
87
–
87
Actuarial gains on defined benefit pension schemes (Note28)
–
–
–
–
2
2
–
2
Exchange differences on translation offoreign operations
–
–
(14)
–
–
(14)
(1)
(15)
Total comprehensive (loss)/income forthe year
1
–
–
(14)
–
143
129
5
134
Employee share schemes
–
–
–
(13)
12
(1)
–
(1)
Dividends paid (Note 9)
–
–
–
–
(41)
(41)
–
(41)
Deferred tax on share-based payments
–
–
–
–
(1)
(1)
–
(1)
Distributions to non-controlling interest
–
–
–
–
–
–
(6)
(6)
Non-cash movement on non-controlling interests
–
–
–
–
–
–
4
4
Balance at 31 August 2024
1
345
13
(9)
(268)
315
396
26
422
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)
2 For further explanation and analysis of Capital redemption reserve and Other reserves, see Note 27
143 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Notes to the financial statements
1. Material accounting policies
a) Basis of preparation
The consolidated financial statements of the Group have been prepared in
accordance with UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting
under those standards.
Going concern
The consolidated and Company financial statements have been prepared
on a going concern basis.
The directors are required to assess whether the Group and Company can
continue to operate for at least 12 months from the date of approval of these
financial statements.
The Strategic report describes the Group’s financial position, cash flows and
borrowing facilities and also highlights the principal risks and uncertainties facing
the Group. The Strategic report also sets out the Group’s business activities together
with the factors that are likely to affect its future developments, performance
and position. Note 23 outlines the Group’s objectives, policies and processes
for managing its capital; its financial risk management objectives; details of its
financial instruments and hedging activities; and its exposures.
In making the going concern assessment, the directors have undertaken a rigorous
assessment of current performance and forecasts for the 15-month period to
February 2027, including expenditure commitments, capital expenditure and
available borrowing facilities. The Group’s borrowing facilities are described in the
Strategic report on page 31 and Note 20. The covenants on the Group’s facilities are
tested half-yearly and are based on fixed charges cover and leverage. The directors
have also considered the existence of factors beyond the going concern period that
could indicate that the going concern basis is not appropriate. We received legal
advice, and waivers were obtained where required, for the facilities in place as at
31 August 2025 to allow for any potential impact as a result of the North America
accounting issues. We are not aware of any other events within the going concern
period which could trigger a breach of covenants associated with the facilities.
The directors have modelled a base case scenario consistent with the latest Board
approved forecasts, which include management’s best estimates of market
conditions and include a number of assumptions including passenger numbers,
revenue growth and cost inflation. These forecasts fully reflect the updated view
of the Group following resolution of the North America accounting issues and the
correction of prior year restatements. Under this scenario the Group has significant
liquidity and complies with all covenant tests throughout the assessment period.
As a result of uncertainty and challenges in the macroeconomic environment,
this base case scenario has been stress tested by applying severe, but plausible,
downside assumptions relating to an economic downturn of a magnitude and
profile in line with previous experience. These assumptions include an increasing
reduction to revenue assumptions of up to ten per cent, phased over the
assessment period, versus the base case, together with a decrease in variable costs,
including turnover-based rents. Under this downside scenario, after Management
mitigations of reducing capex and suspending purchases of shares for Employee
Share Option Plans, the Group would continue to have significant liquidity
headroom on its existing facilities and complies with all covenant tests throughout
the assessment period.
A reverse stress test scenario has also been conducted to understand the level
of revenue downside that could be absorbed before covenants are breached.
Under this scenario in addition to Management’s mitigating actions in the severe
but plausible scenario a further assumption has been made that, post the payment
of the final dividend for the year ended 31 August 2025, no dividends would be paid
in the assessment period. In this reverse stress test scenario, a covenant breach
occurs upon revenue decreasing by 12.3% on a phased basis.
Based on the above analysis, the directors have concluded that the Group and
Company is able to adequately manage its financing and principal risks, and that
the Group and Company will be able to continue to meet its obligations as they fall
due and operate within the level of its facilities for at least 12 months from the date
of approval of these financial statements.
144 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Notes to the financial statements continued
1. Material accounting policies continued
a) Basis of preparation continued
New standards adopted by the Group
The Group has adopted the following standards and interpretations which became
mandatory for the year ended 31 August 2025:
Amendments to IAS 1
Classification of liabilities as current or
Amendments to IAS 7 and IFRS 7
Supplier finance arrangements
Amendments to IFRS 16
Lease Liability in a Sale and Leaseback
The Group has considered the above new standards and amendments and has
concluded, with the exception of the IAS 1 amendments, that they are either
not relevant to the Group or they do not have a material impact on the Group’s
consolidated financial statements.
The IAS 1 amendments in respect of current and non-current classification
of liabilities remove the requirement that the right to defer settlement be
unconditional. Under the amended standard, in order to classify liabilities as
non-current, the right to defer settlement must have substance and exist at the
reporting date.
The Group considers in respect of its revolving credit facility, which has a maturity
date of 13 June 2030 and carries financial covenants, there is not a right to defer
settlement for at least 12 months from the reporting date following announcement
of the accelerated supplier income recognition in the North America division.
Whilst waivers were subsequently agreed with lenders, these were not in place at
31 August 2025. As a result, the amounts drawn down under the facility (£141 million)
are presented as a current liability. As the accelerated supplier income recognition
issue also impacts prior periods, the Group has concluded that the right to defer
settlement did not exist in prior periods and has therefore presented amounts
drawn down under the facility as a current liability for the years ended 31 August
2024 and 31 August 2023 as previously reported. The Group anticipates that such
amounts may be reclassified to non-current liabilities in future reporting periods.
New standards in issue but not yet effective
At the date of authorisation of these consolidated Group financial statements,
the following standards and interpretations, which have not been applied in these
financial statements, were in issue but not yet effective:
IFRS 18
Presentation and disclosure
IFRS 19
Subsidiaries without public
Amendments to IFRS 9 and IFRS 7
Classification and Measurement
Amendments to IFRS 9 and IFRS 7
Contracts Referencing Nature-
Amendments to IFRS 10 and IAS 28
Sale or Contribution of Assets between an
Amendments to IAS 21
Lack of exchangeability
With the exception of IFRS 18, the adoption of the above standards and
interpretations is not expected to have any material impact on the Group’s
financial statements.
IFRS 18 was issued in April 2024 and is effective for periods beginning on or after
1 January 2027. Early application is permitted and comparatives will require
restatement. The standard will replace IAS 1 Presentation of Financial Statements.
IFRS 18 will not change how items are recognised and measured, rather, it will
require changes to the reporting of financial performance. Specifically classifying
income and expenses into three new defined categories – operating, investing
and financing – and two new subtotals “operating profit and loss” and “profit
or loss before financing and income tax”, as well as introducing disclosures of
management-defined performance measures (“MPMs”) and enhancing general
requirements on aggregation and disaggregation. The impact of the standard
on the Group is currently being assessed and it is not yet practicable to quantify
the effect of IFRS 18 on these consolidated financial statements. IFRS 18 will
be applicable for the Group’s Annual Report and Accounts for the year ending
31 August 2028.
145 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Notes to the financial statements continued
1. Material accounting policies continued
a) Basis of preparation continued
Alternative performance measures (“APMs”)
The Group has identified certain measures that it believes will assist the
understanding of the performance of the business. These APMs are not defined
or specified under the requirements of IFRS.
The Group believes that these APMs, which are not considered to be a substitute
for, or superior to, IFRS measures, provide stakeholders with additional useful
information on the underlying trends, performance and position of the Group and
are consistent with how business performance is measured internally. The APMs
are not defined by IFRS and therefore may not be directly comparable with other
companies’ APMs.
The key APMs that the Group uses include: measures before non-underlying items,
Headline profit before tax, Headline earnings per share, trading profit, Headline
trading profit, Headline Group profit from trading operations, like-for-like revenue,
gross margin, fixed charges cover, Headline EBITDA, effective tax rate, net debt
and Headline net debt, free cash flow, return on capital employed and leverage.
These APMs are set out in the Glossary on page 209 including explanations of
how they are calculated and how they are reconciled to a statutory measure
where relevant.
Non-underlying items
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. The Group believes that the separate disclosure of these
items provides additional useful information to users of the financial statements
to enable a better understanding of the Group’s underlying financial performance.
Non-underlying items can include, but are not limited to, restructuring and
transformation costs linked to Board agreed programmes, costs relating to M&A
activity, impairment charges and other property costs, significant items relating
to pension schemes, amortisation of intangible assets acquired in business
combinations, and the related tax effect of these items. Reversals associated with
items previously reported as non-underlying, such as reversals of impairments
and releases of provisions or liabilities are also reported in non-underlying items.
Further details of non-underlying items recognised in the Income statement
in the current and prior year are provided in Note 4.
Items recognised in Other comprehensive income/loss may also be identified
as non-underlying for the purposes of narrative explanation of the Group’s
performance, where the Group has determined that they are associated with
the above categories and are judged to have met the Group’s definition of non-
underlying.
Discontinued operations
A discontinued operation is a component of the Group that (i) either has been
disposed of or is classified as held for sale; and (ii) represents a separate major line
of business or geographical area of operations or is part of a single coordinated plan
to dispose of a separate major line of business or geographical area of operations.
The results of discontinued operations are presented as a single amount of profit
or loss after tax in the consolidated income statement, separate from the results
of continuing operations. Non-current assets or disposal groups classified as held
for sale are measured at the lower of their carrying amount and fair value less costs
to sell. Depreciation of such assets ceases once they are classified as held for sale.
Details relating to the discontinued operations of the Group’s High Street and
funkypigeon.com businesses, which were disposed of during the financial year,
are provided in Note 8 to the financial statements.
Below shows the Group income statement for the year ended 31 August 2024
as previously reported along with the impact of discontinued operations.
146 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Notes to the financial statements continued
1. Material accounting policies continued
a) Basis of preparation continued
Group income statement
2024 as previously reported
Reclassification of discontinued operations
items
Total
items
Total
items
Total
Revenue
1,918
–
1,918
(445)
–
(445)
1,473
–
1,473
Group operating profit/(loss)
213
(55)
158
(39)
14
(25)
174
(41)
133
Finance costs
(52)
–
(52)
4
–
4
(48)
–
(48)
Profit/(loss) before tax – continuing operations
161
(55)
106
(35)
14
(21)
126
(41)
85
Income tax (expense)/credit
(38)
9
(29)
8
(4)
4
(30)
5
(25)
Profit/(loss) for the year – continuing operations
123
(46)
77
(27)
10
(17)
96
(36)
60
Profit/(loss) for the year – discontinued operations
–
–
–
27
(10)
17
27
(10)
17
Profit/(loss) for the year – total operations
123
(46)
77
–
–
–
123
(46)
77
Attributable to equity holders of the parent
113
(46)
67
–
–
–
113
(46)
67
Attributable to non-controlling interests
10
–
10
–
–
–
10
–
10
123
(46)
77
–
–
–
123
(46)
77
Total comprehensive income
151
–
151
147 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Notes to the financial statements continued
1. Material accounting policies continued
a) Basis of preparation continued
Accounting convention
The financial statements are drawn up on the historical cost basis of accounting,
except for certain financial instruments and share-based payments that have been
measured at fair value. The financial information is rounded to the nearest million,
except where otherwise indicated. The principal accounting policies, which have
been applied consistently throughout both years except as noted above, are set
out on the following pages.
The consolidated Group financial statements incorporate the financial statements
of WH Smith PLC and all its subsidiaries.
Subsidiary undertakings are all entities over which the Group has control.
The Group controls an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the Group.
Consolidation of a subsidiary begins when the Group obtains control over
the subsidiary and ceases when the Group loses control of the subsidiary.
Subsidiary undertakings acquired during the year are recorded using the
acquisition method of accounting and their results are included from the date of
acquisition. The separable net assets, both tangible and intangible, of the newly
acquired subsidiary undertakings are incorporated into the financial statements
on the basis of the fair value as at the effective date of control. Results of subsidiary
undertakings disposed of during the financial year are included in the financial
statements up to the effective date of disposal.
Non-controlling interests represent equity interests in legal entities established
to comply with U.S. Disadvantaged Business Enterprise requirements. The Group
typically retains control over these entities, which operate a store or group of stores
and hold assets and liabilities primarily consisting of right-of-use assets, property,
plant and equipment, inventories and lease liabilities. The cash flows into the legal
entities relate to revenue for the sale of goods and contributions from the equity
holders. Non-controlling interests are generally stated at the non-controlling
interests’ proportion of the value of the property, plant and equipment recognised.
The share of profit or loss attributable to non-controlling interests is disclosed
separately in the consolidated income statements.
A joint venture is an entity in which the Group holds an interest on a long-term
basis and which is jointly controlled by the Group and one or more other venturers
under a contractual agreement. Management has assessed whether it has joint
control of the arrangement. Joint control exists only when decisions about the
relevant activities require the unanimous consent of the parties that collectively
control the arrangement. In assessing this joint control no significant judgements
have been necessary.
The Group’s share of results of joint ventures is included in the Group consolidated
income statement using the equity method of accounting. The results
of joint ventures in the current and prior year are not material to disclose.
Investments in joint ventures are carried in the Group consolidated balance sheet
at cost plus post-acquisition changes in the Group’s share of net assets of the entity
less any impairment in value. If the Group’s share of losses in the joint venture
equals or exceeds its investment in the joint venture, the Group does not recognise
further losses, unless it has incurred obligations to do so, or made payments on
behalf of the joint venture.
All intercompany transactions, balances and unrealised gains on transactions
between Group companies are eliminated.
b) Restatement of prior year financial statements
In August 2025, the Group identified that the recognition of supplier income
was being accelerated in the North America division. Further investigation of
the financial information for the years ended 31 August 2023 and 31 August 2024
identified that similar practices existed in these prior reporting periods.
The Group also identified additional one-off costs regarding inventory-related
items in the year ended 31 August 2025, including in respect of the completeness
of inventory provisions and liabilities related to goods received but not invoiced.
Certain of these costs should have been recorded in prior reporting periods.
As a result, prior year consolidated financial statements have been restated.
Amendments to the previously reported consolidated primary financial statements
for the year ended 31 August 2024 are shown below, after taking into account the
adjustments for discontinued operations arising from the sale of the High Street
and Funky Pigeon businesses in the year. The reclassification of discontinued
operations within the Group income statement have been presented in Note 1 (a).
Certain other reclassification restatements to primary financial statements have
also been identified and are set out below, including the reclassification of certain
receivables from current to non-current assets and the reclassification of certain
cash flows from operating cash flows to investing cash flows.
A third Balance sheet, as of 1 September 2023, has also been disclosed.
148 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Notes to the financial statements continued
1. Material accounting policies continued
b) Restatement of prior year financial statements continued
Group income statement
of discontinued operations
Restatement
2024 restated
items
Total
items
Total
items
Total
Revenue
1,473
–
1,473
–
–
–
1,473
–
1,473
Group operating profit/(loss)
1
174
(41)
133
(20)
–
(20)
154
(41)
113
Finance costs
(48)
–
(48)
–
–
–
(48)
–
(48)
Profit/(loss) before tax – continuing operations
126
(41)
85
(20)
–
(20)
106
(41)
65
Income tax (expense)/credit
(30)
5
(25)
3
–
3
(27)
5
(22)
Profit/(loss) for the year – continuing operations
96
(36)
60
(17)
–
(17)
79
(36)
43
Profit/(loss) for the year – discontinued operations
27
(10)
17
–
–
–
27
(10)
17
Profit/(loss) for the year – total operations
123
(46)
77
(17)
–
(17)
106
(46)
60
Attributable to equity holders of the parent
113
(46)
67
(13)
–
(13)
100
(46)
54
Attributable to non-controlling interests
10
–
10
(4)
–
(4)
6
–
6
123
(46)
77
(17)
–
(17)
106
(46)
60
Total comprehensive income
151
(17)
134
1 All restatements impacting Group operating profit/(loss) relate to Cost of sales
2024 as previously reported
1
Restatement
2024 restated
(pre-IFRS 16)
IFRS 16
Total
(pre-IFRS 16)
IFRS 16
Total
(pre-IFRS 16)
IFRS 16
Total
UK
122
–
4
126
–
–
–
–
122
–
4
126
North America
54
–
4
58
(20)
–
–
(20)
34
–
4
38
Rest of the World and Other
1
14
–
4
18
–
–
–
–
14
–
4
18
190
–
12
202
(20)
–
–
(20)
170
–
12
182
1 Restated for the revision to operating segments following the sale of the High Street and Funky Pigeon businesses in 2025 (refer to Note 2 and Note 8 for further details)
149 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

1. Material accounting policies continued
b) Restatement of prior year financial statementscontinued
Group income statement – disaggregation of restatement
Accelerated supplier income recognition
Inventory-related items
Total restatement
items
Total
items
Total
items
Total
Revenue
–
–
–
–
–
–
–
–
–
Group operating loss
1
(13)
–
(13)
(7)
–
(7)
(20)
–
(20)
Finance costs
–
–
–
–
–
–
–
–
–
Loss before tax – continuing operations
(13)
–
(13)
(7)
–
(7)
(20)
–
(20)
Income tax credit
2
–
2
1
–
1
3
–
3
Loss for the year – continuing operations
(11)
–
(11)
(6)
–
(6)
(17)
–
(17)
Profit/(loss) for the year – discontinued operations
–
–
–
–
–
–
–
–
–
Loss for the year – total operations
(11)
–
(11)
(6)
–
(6)
(17)
–
(17)
Attributable to equity holders of the parent
(8)
–
(8)
(5)
–
(5)
(13)
–
(13)
Attributable to non-controlling interests
(3)
–
(3)
(1)
–
(1)
(4)
–
(4)
(11)
–
(11)
(6)
–
(6)
(17)
–
(17)
Total comprehensive loss
(11)
(6)
(17)
1 All restatements impacting Group operating loss relate to Cost of sales
Group earnings per share
Basic earnings per share – continuing operations
51.9p
(13.2p)
38.7p
(6.2p)
(3.8p)
28.7p
Diluted earnings per share – continuing operations
51.1p
(13.0p)
38.1p
(6.1p)
(3.8p)
28.2p
Basic earnings per share – total operations
51.9p
–
51.9p
(6.2p)
(3.8p)
41.9p
Diluted earnings per share – total operations
51.1p
–
51.1p
(6.1p)
(3.8p)
41.2p
Notes to the financial statements continued
150 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

1. Material accounting policies continued
b) Restatement of prior year financial statementscontinued
Group cash flow statement extract – year ended 31 August 2024
settlements
1
Net cash inflows from operating activities
275
(9)
266
Net cash outflows from investing activities
(137)
9
(128)
Net cash outflows from financing activities
(138)
–
(138)
Net increase in cash in the period
–
–
–
1 Reclassification of cash flows linked to the settlement of financial instruments from operating to investing activities
Group balance sheet extract – as at 31 August 2024
current
1
Deferred tax assets
33
4
–
–
37
Trade and other receivables
12
–
–
12
24
Total non-current assets
1,358
4
–
12
1,374
Inventories
217
(3)
(5)
–
209
Trade and other receivables
150
(12)
–
(12)
126
Current tax receivable
1
1
–
–
2
Total current assets
511
(14)
(5)
(12)
480
Trade and other payables
(352)
(4)
(5)
–
(361)
Total current liabilities
(599)
(4)
(5)
–
(608)
Total non-current liabilities
(824)
–
–
–
(824)
Total net assets
446
(14)
(10)
–
422
Retained earnings
335
(11)
(9)
–
315
Non-controlling interests
30
(3)
(1)
–
26
Total equity
446
(14)
(10)
–
422
1 Reclassification of certain receivables related to joint venture arrangements in North America from current to non-current (see Note 14 for further details). In addition, within Trade
and other receivables all receivables related to joint venture arrangements have been reclassified from Trade receivables to Other receivables (£15m)
Notes to the financial statements continued
151 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

1. Material accounting policies continued
b) Restatement of prior year financial statementscontinued
Group balance sheet extract – as at 31 August 2023
current
1
Deferred tax assets
43
2
–
–
45
Trade and other receivables
9
–
–
10
19
Total non-current assets
1,273
2
–
10
1,285
Inventories
205
(1)
(3)
–
201
Trade and other receivables
112
(1)
–
(10)
101
Total current assets
377
(2)
(3)
(10)
362
Trade and other payables
(340)
(3)
(1)
–
(344)
Total current liabilities
(543)
(3)
(1)
–
(547)
Total non-current liabilities
(767)
–
–
–
(767)
Total net assets
340
(3)
(4)
–
333
Retained earnings
209
(3)
(4)
–
202
Total equity
340
(3)
(4)
–
333
1 Reclassification of certain receivables related to joint venture arrangements in North America from current to non-current (see Note 14 for further details). In addition, within Trade
and other receivables all receivables related to joint venture arrangements have been reclassified from Trade receivables to Other receivables (£10m)
Notes to the financial statements continued
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1. Material accounting policies continued
c) Revenue
Revenue comprises sales of goods to customers outside the Group at the
transaction price less an appropriate deduction for actual and expected returns and
discounts, and is stated net of value added tax and other sales-related taxes.
Revenue is recognised when performance obligations have been met and control
of the goods has transferred to the customer. The majority of the Group’s sales are
for standalone products made direct to customers at standard prices either in-store,
online or through franchisees, where there is a single performance obligation.
Revenue generated from different store formats are considered to be a single
revenue stream and are subject to the same underlying economic risks.
Revenue on in-store transactions is recognised at the point of sale when control
of the goods is deemed to have transferred to the customer. Revenue in respect
of online and wholesale (including sales directly to franchisees) transactions is
recognised on the transfer of control, which is on delivery of the goods to the
customers. Revenue in respect of gift cards sold by the Group is recognised on
the redemption of the gift card either in-store at the point of sale or on delivery for
online redemptions. Franchise and concession fees and commission are recognised
on the accruals basis in accordance with the substance of the contracts in place,
which is typically on the basis of fixed fees spread evenly over the contract period,
and/or variable amounts earned based on revenue. Such variable amounts are
recognised when it is highly probable that a significant reversal in the amount
of income recognised will not occur.
d) Supplier income
The Group receives income from its suppliers in the form of supplier incentives and
discounts. This income is generally recognised as a deduction against cost of sales
on an accruals basis.
Supplier income that has been invoiced but not received at the year-end is
recognised in Trade receivables or offset against Trade payables where the Group
has a right and intention to settle net. Income contractually agreed and invoiced
but not yet earned is recorded in Deferred income. Income that has been earned
but not yet invoiced is accrued and recorded in Accrued income. Where the income
relates to inventories that are held by the Group at the reporting date, the income
is included within the cost of inventories and recognised in cost of sales upon sale
of those inventories.
The types of supplier income recognised by the Group, and the recognition policies
are detailed below.
Retrospective discounts
Retrospective discounts are earned based on sales or purchase volume triggers set
by the supplier for specific products over specific periods. Income is calculated and
invoiced throughout the year in accordance with the specific supplier terms based
upon actual sales or purchases over the period set out in the supplier agreement.
Where the period of an agreement spans an accounting period, income is accrued
based on forecasts for expected sales or purchase volumes, informed by current
performance, trends, and the terms of the supplier agreement. This income is
recognised in cost of sales when the product to which the discount relates is sold.
Promotional and marketing activity
Supplier income from promotional and marketing activity includes income in
respect of in-store marketing and point of sale, supplying dedicated promotional
space or receiving margin support for products on promotion. Income for
promotional and marketing activity is agreed with suppliers for specific periods
and products and is invoiced or accrued in accordance with those agreements.
Income is recognised in cost of sales over the period to which the agreement and/
or activity relates. As these agreements do not generally identify specific inventory
purchases, this approach is used to reflect the best estimate of how the income
should be attributed to cost of sales.
e) Retirement benefit costs
Defined contribution pension schemes
Payments to the WH Smith Group defined contribution pension schemes are
recognised as an expense in the income statement as they fall due.
Defined benefit pension schemes
The cost of providing benefits for the United News Shops Retirement Benefits
Scheme is determined by the Projected Unit Credit Method, with actuarial
calculations being carried out at the balance sheet date. Actuarial gains and losses
are recognised in full in the year in which they occur. They are recognised outside
the income statement in the Group statement of comprehensive income.
The retirement benefit surplus or obligation recognised in the balance sheet
represents the difference between the fair value of scheme assets and the present
value of the defined benefit obligation. Any surplus resulting from the calculation
is limited to the present value of available refunds and reductions in future
contributions to the plan. Where the Group is considered to have a contractual
obligation to fund the pension scheme above the accounting value of the liabilities,
an onerous obligation is recognised.
Notes to the financial statements continued
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1. Material accounting policies continued
f) Intangible assets
Business combinations
The acquisition of subsidiaries is accounted for using the acquisition method.
The consideration transferred is measured at the aggregate of the fair values,
at the date of exchange, of assets given, liabilities incurred or assumed, and
equity instruments issued by the Group in exchange for control, of the acquiree.
Costs directly attributable to the business combination are recognised in the
income statement in the year they are incurred. The cost of a business combination
is allocated at the acquisition date by recognising the acquiree’s identifiable assets,
liabilities and contingent liabilities that satisfy the recognition criteria at their fair
values at that date.
The acquisition date is the date on which the acquirer effectively obtains control
of the acquiree. Intangible assets are recognised if they meet the definition of an
intangible asset contained in IAS 38 and their fair value can be measured reliably.
The excess of the cost of acquisition over the fair value of the Group’s share of
identifiable net assets acquired is recognised as goodwill.
Where less than the entire equity interest of a subsidiary is acquired, the non-
controlling interest is recognised at the non-controlling interest’s share of the
net assets of the subsidiary. Changes in the Group’s ownership percentage of
subsidiaries are accounted for within equity.
Goodwill
Goodwill represents the excess of the fair value of purchase consideration over
the net fair value of identifiable assets and liabilities acquired.
Goodwill is recognised as an asset at cost and subsequently measured at cost
less accumulated impairment. For the purposes of impairment testing, goodwill
is allocated to the cash-generating units (“CGUs”) that have benefited from
the acquisition. Each store is considered to be a CGU, or in some cases a group
of stores is considered to be a CGU where the stores do not generate largely
independent cash inflows. Goodwill is allocated to the group of CGUs making up
the Group’s operating segments, as this is the lowest level at which management
monitor goodwill.
The carrying value of goodwill is reviewed for impairment at least annually or where
there is an indication that goodwill may be impaired. If the recoverable amount
of the group of cash-generating units is less than its carrying amount, then the
impairment loss is allocated first to reduce the carrying amount of the goodwill
allocated to the units and then to the other assets of the units on a pro-rata basis.
Any impairment is recognised immediately in the income statement and is not
subsequently reversed.
On disposal of a subsidiary, the attributable amount of goodwill is included in the
determination of the profit and loss on disposal.
Other intangible assets
The costs of acquiring and developing software that is not integral to the related
hardware is capitalised separately as an intangible asset. These intangibles
are stated at cost less accumulated amortisation and impairment losses.
Amortisation is charged so as to write off the costs of assets over their estimated
useful lives, using the straight-line method, and is recorded in Distribution costs.
The amortisation period for capitalised software costs is over a maximum period
of five years.
Cloud-based software arrangements are treated as service contracts and expensed
in the Group income statement as the service is received, except where the
arrangement meets the requirements for recognition as an intangible asset of the
Group under IAS 38. These criteria are met when the Group has both a contractual
right to take possession of the software without significant penalty, and the
ability to run the software independently of the software host. Configuration and
customisation costs in relation to a cloud-based software arrangements are
expensed alongside the related service contract in the consolidated income
statement, unless they create a separately identifiable resource controlled by the
Group, in which case they are capitalised.
Other intangible assets are valued at cost and amortised over their useful life,
and the amortisation is recorded in administrative expenses, unless the asset
can be demonstrated to have an indefinite life. Other intangible assets, such as
brands, arising on business combinations are amortised on a straight line basis
over their useful lives. Amortisation of other intangible assets arising on business
combinations is included in non-underlying costs. The useful life and residual value
of all intangible assets are determined at the time of acquisition and reviewed
annually for appropriateness.
The useful economic lives of other intangible assets are as follows:
Software – up to five years
Brands – ten to 20 years
All intangible assets are reviewed for impairment in accordance with IAS 36
Impairment of Assets, when there are indications that the carrying value
may not be recoverable. Assets with indefinite useful lives are tested for
impairment annually.
Notes to the financial statements continued
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1. Material accounting policies continued
g) Property, plant and equipment
Property, plant and equipment assets are carried at cost less accumulated
depreciation and any recognised impairment in value. Depreciation is charged so
as to write off the costs of assets, other than land, over their estimated useful lives,
using the straight-line method, with the annual rates applicable to the principal
categories being:
Freehold properties
– over 20 years
Leasehold improvements
– either the lease period or the estimated remaining
Fixtures and fittings
– up to ten years
Equipment and vehicles
– up to ten years
The residual values of property, plant and equipment are reassessed on an annual
basis. Where the Group has protected tenancy rights and there is an intention
to renew the lease, the useful life of leasehold improvements is assumed to be up
to ten years, irrespective of the remaining contractual lease term.
At each balance sheet date, property, plant and equipment is reviewed for
impairment if events or changes in circumstances indicate that the carrying
amount may not be recoverable. When a review for impairment is conducted, the
recoverable amount is assessed by reference to the net present value of expected
future pre-tax cash flows of the relevant cash-generating unit, or fair value less costs
to sell, if higher. Any impairment in value is charged to the income statement in the
year in which it occurs.
h) Leasing
The Group recognises a right-of-use asset and a corresponding lease liability
for all lease arrangements in which it is the lessee, except for short-term leases
(defined as leases with a lease term of 12 months or less) and leases of low-value
assets. For these leases, the Group recognises the lease payments in distribution
costs on a straight-line basis over the term of the lease.
Lease liabilities are measured at the present value of the future lease payments,
which comprise:
• fixed lease payments, less any lease incentives receivable;
• variable lease payments that depend on an index or rate, initially measured
using the index or rate at the commencement date;
• the amount expected to be payable under residual value guarantees; and
• payments to exercise options, to the extent that the Group is reasonably certain
to exercise the options.
The payments are discounted using the rate implicit in the lease, or where that
cannot be readily determined, at an incremental borrowing rate.
Right-of-use assets are measured initially at cost, being the value of the
corresponding lease liability, adjusted for lease payments made at or before the
commencement date, initial direct costs and an estimate of the costs to dismantle
and remove a leased asset, restore the site on which it is located or restore the
underlying asset to the condition required by the terms and conditions of the
lease. The right-of-use assets are presented as a separate line in the consolidated
balance sheet.
Subsequent to initial recognition, the lease liability is reduced for payments made
and increased to reflect interest on the lease liability (using the effective interest
method). Right-of-use assets are subsequently measured at cost less accumulated
depreciation and impairment losses.
The Group includes remeasurements and modifications to the lease liability (and
makes a corresponding adjustment to the related right-of-use asset) whenever:
• The lease payments change due to changes in an index, rent review or rate,
in which cases the lease liability is remeasured by discounting the revised lease
payments using the initial discount rate.
• A lease contract is modified, and the lease modification is not accounted for as
a separate lease, in which case the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and
accounts for any identified impairment loss as described in the accounting policies
in Note 1(g) Property, plant and equipment.
Lease contracts that include variable rents based on revenue, which is the case
with many of our retail concession contracts, are not included in the measurement
of the lease liability and the right-of-use asset. The related rents payable are
recognised as an expense in the year in which the event or condition that triggers
those payables occurs and are included in profit or loss (see Note 3).
Where a lease term ends and the Group continues to occupy the location
on holdover terms, rent is recognised as an expense in the income statement
as incurred.
Notes to the financial statements continued
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1. Material accounting policies continued
h) Leasing continued
For leases acquired as part of a business combination, the lease liability is measured
at the present value of the remaining lease payments. The right-of-use asset is
measured at the same amount as the lease liability adjusted to reflect favourable
or unfavourable terms of the lease when compared to market terms.
i) Inventories
Inventories comprise goods held for resale and are stated at the lower of cost or
net realisable value. Consignment stocks are not included within stocks held by
the Group. Inventories are valued using a weighted average cost method.
Cost is calculated to include, where applicable, duties, handling, transport and
directly attributable costs (including a deduction for applicable supplier income)
in bringing the inventories to their present location and condition. The assessment
of what costs are necessary to bring inventories to the present location and
condition requires judgment but includes certain distribution costs that are
considered an unavoidable part of the supply chain. Costs that are capitalised into
inventory are recognised in cost of sales when the goods are sold. Other distribution
costs are expensed as incurred and recognised in distribution costs. Net realisable
value is based on estimated normal selling prices less further costs expected to be
incurred in selling and distribution. Cost of inventories includes the transfer from
equity of any gains or losses on qualifying cash flow hedges relating to purchases.
Provisions are made for obsolescence, markdown below cost and shrinkage.
j) Provisions
Provisions are recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event and it is probable that an
outflow of economic benefits will be required to settle the obligation. Provisions are
measured at the directors’ best estimate of the expenditure required to settle the
obligation at the balance sheet date. Where the effect is material, the provision
is determined by discounting the expected future cash flows at a pre-tax rate
which reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability.
k) Foreign currencies
The consolidated financial statements are presented in pounds sterling (GBP),
which is WH Smith PLC’s functional and presentation currency. Items included
in the financial statements of each of the Group’s subsidiaries are measured using
the currency of the primary economic environment in which the entity operates
(the “functional currency”).
On consolidation, the assets and liabilities of the Group’s overseas operations are
translated into sterling at exchange rates prevailing on the balance sheet date.
Income and expense items are translated into sterling at the average exchange
rates for the year. Exchange differences arising, if any, are classified as equity and
transferred to the Group’s translation reserve.
Transactions denominated in foreign currencies are recorded at the rates
of exchange prevailing on the dates of the transactions.
At each balance sheet date, monetary items denominated in foreign currencies are
retranslated at the rates prevailing on the balance sheet date. Exchange differences
arising on the settlement of monetary items, and on the retranslation of monetary
items, are included in the income statement for the year.
In order to hedge its exposure to certain foreign exchange risks, the Group enters
into forward contracts (see below for details of the Group’s accounting policies
in respect of such derivative financial instruments).
l) Taxation
The tax expense included in the income statement comprises current and
deferred tax.
Current tax is the expected tax payable or receivable based on the taxable profit
or loss for the year, using tax rates that have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used
in the computation of taxable profit, and is accounted for using the balance sheet
liability method. Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent that it
is probable that taxable profit will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if the
temporary difference arises from goodwill or from the initial recognition (other than
in business combination) of other assets and liabilities in a transaction that affects
neither the tax profit nor the accounting profit or does not give rise to equal and
opposite temporary differences.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the asset to be recovered. Deferred tax
is calculated at the tax rates that are expected to apply in the year when the liability
is settled or the asset is realised.
Notes to the financial statements continued
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1. Material accounting policies continued
m) Financial instruments
Current and deferred tax is charged or credited in the income statement, except
when it relates to items charged or credited directly to equity, in which case the
current or deferred tax is also recognised directly in equity. Deferred tax assets and
liabilities are offset where there is considered to be a legally enforceable right to
do so.
Financial assets and liabilities are recognised in the Group’s balance sheet when
the Group becomes party to the contractual provisions of the instrument.
i) Initial recognition and subsequent measurement
a) Financial assets
Trade and other receivables
Trade receivables are measured at fair value at initial recognition, do not carry any
interest and are subsequently measured at amortised cost using the effective
interest rate method. Appropriate allowances for estimated irrecoverable amounts
are recognised in the income statement.
Allowances for doubtful debts are recognised based on management’s expectation
of losses, without regard to whether an impairment trigger has occurred or not
(an “expected credit loss” model under IFRS 9).
Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in
hand and short-term deposits with an original maturity of three months or less.
Credit card receivables are included in cash and cash equivalents.
b) Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance
of the contractual arrangements entered into. An equity instrument is any contract
that evidences a residual interest in the assets of the Group after deducting all
of its liabilities.
Borrowings
Borrowings comprise interest-bearing bank loans and overdrafts and compound
financial instruments (convertible bonds).
Bank loans are initially measured at fair value (being proceeds received, net of
direct issue costs), and are subsequently measured at amortised cost, using
the effective interest rate method. Transaction fees such as arrangement fees
associated with the securing of financing are capitalised and amortised through
the income statement over the term of the relevant facility. Finance charges,
including premiums payable on settlement or redemptions and direct issue costs
are accounted for on an accruals basis and taken to the income statement using
the effective interest rate method and are added to the carrying value of the
instrument to the extent that they are not settled in the year in which they arise.
Compound financial instruments issued by the Group comprise convertible
bonds. The convertible bonds are bifurcated into a liability component and an
equity component on initial recognition. The carrying value of the liability at initial
recognition is measured using a market interest rate for an equivalent non-
convertible bond at the issue date. The remainder of the proceeds is allocated
to the conversion option and recognised in equity (Other reserves), and not
subsequently remeasured. Any directly attributable transaction costs are allocated
to each component in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial
instrument is measured at amortised cost using the effective interest method.
Any transaction costs apportioned to the liability is included in the carrying amount
and recognised over the contractual life of the liability using the effective interest
rate method.
Trade and other payables
Trade and other payables are initially measured at fair value and are subsequently
measured at amortised cost, using the effective interest rate method.
Equity instruments
Equity instruments issued are recorded at the proceeds received, net of direct
issue costs.
ii) Derecognition of financial assets and liabilities
a) Financial assets
The Group derecognises a financial asset when the contractual rights to the
cash flows from the financial asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which substantially all of the risks and
rewards of ownership of the financial asset are transferred or in which the Group
neither transfers nor retains substantially all of the risks and rewards of ownership
and it does not retain control of the financial asset.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are
discharged or cancelled, or expire. The Group also derecognises a financial liability
when a qualitative review of its contractual terms shows that the terms have
been significantly changed or where the cash flows of the modified liability are
substantially different, in which case a new financial liability based on the modified
terms is recognised at fair value.
Notes to the financial statements continued
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1. Material accounting policies continued
m) Financial instruments continued
On derecognition of a financial liability, the difference between the carrying
amount extinguished and the consideration paid (including any non-cash assets
transferred or liabilities assumed) is recognised in profit or loss.
iii) Offsetting
Financial assets and financial liabilities are offset and the net position presented
in the balance sheet when, and only when, the Group has a legally enforceable right
to set off the amounts and it intends either to settle them on a net basis or to realise
the asset and settle the liability simultaneously.
iv) Impairment
The Group recognises loss allowances for expected credit losses (“ECLs”) on
financial assets measured at amortised cost. These are always measured at an
amount equal to lifetime ECL. The maximum period considered when estimating
ECLs is the maximum contractual period over which the Group is exposed to
credit risk.
When determining whether the credit risk of a financial asset has increased
significantly since initial recognition and when estimating ECL, the Group considers
reasonable and supportable information that is relevant and available without
undue cost or effort.
This includes both qualitative and quantitative information and analysis, based
on the Group’s historical experience and informed credit assessment and forward-
looking information.
Loss allowances for financial assets measured at amortised cost are deducted from
the gross carrying amount of the assets. The gross carrying amount of a financial
asset is written off (either partially or in full) to the extent that there is no realistic
prospect of recovery. This is generally the case when the Group determines that the
debtor does not have the assets or sources of income that could generate sufficient
cash flows to repay the amounts subject to the write-off. However, financial assets
that are written off could still be subject to enforcement activities in order to comply
with the Group’s procedures for recovery of amounts due.
v) Derivative financial instruments and hedge accounting
The Group uses certain derivative financial instruments to reduce its exposure to
foreign exchange movements in accordance with its risk management policies.
The Group primarily uses forward foreign currency contracts to manage its
exposure to changes in foreign exchange rates. The Group does not hold or use
derivative financial instruments for speculative purposes. Further details of the
Group’s risk management policies are provided in Note 23.
These instruments are initially recognised at fair value on the trade date and
are subsequently measured at their fair value at the end of the financial year.
The method of recognising the resulting gain or loss is dependent on whether
the derivative is designated as a hedging instrument and the nature of the items
being hedged.
Changes in the fair value of derivative financial instruments that are designated
and effective as hedges of future cash flows are recognised directly in equity and
any ineffective portion is recognised immediately in the income statement.
If the cash flow hedge of a highly probable forecasted transaction results in
the recognition of an asset or liability, then, at the time the asset or liability is
recognised, the associated gains or losses on the derivative that had previously
been recognised in equity are included in the initial measurement of the asset
or liability. For hedges that do not result in the recognition of an asset or a liability,
amounts deferred in equity are recognised in the income statement in the same
period as the hedged item.
For an effective hedge of an exposure to changes in the fair value of a recognised
asset or liability, changes in fair value of the hedging instrument are recognised
in profit or loss at the same time that the recognised asset or liability that is being
hedged is adjusted for movements in the hedged risk and that adjustment is also
recognised in profit or loss in the same period.
Changes in the fair value of derivative financial instruments that do not qualify for
hedge accounting are recognised in the income statement as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold,
terminated, or exercised, or no longer qualifies for hedge accounting. At that time,
any cumulative gain or loss on the hedging instrument recognised in equity is
retained in equity until the forecasted transaction occurs. If a hedged transaction
is no longer expected to occur, the net cumulative gain or loss recognised in equity
is transferred to profit or loss.
Derivatives embedded in other financial liabilities are treated as separate derivatives
when their risks and characteristics are not closely related to those of host contracts
and the host contracts are not carried at fair value with unrealised gains or losses
reported in the income statement.
Notes to the financial statements continued
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1. Material accounting policies continued
n) Share schemes
WH Smith Employee Benefit Trust
The shares held by the WH Smith Employee Benefit Trust are valued at the
historical cost of the shares acquired. They are deducted in arriving at shareholders’
funds and are presented as an Other reserve.
Share-based payments
Employees of the Group receive part of their remuneration in the form of share-
based payment transactions, whereby employees render services in exchange for
shares or rights over shares (equity settled transactions).
Equity settled share-based payments are measured at fair value at the date of
grant. The fair value is calculated using an appropriate option pricing model.
The fair value is expensed to the income statement on a straight-line basis over the
vesting period, based on the Group’s estimate of the number of shares that will
eventually vest.
For cash-settled share-based payments, a liability is recognised at the current fair
value determined at each balance sheet date, taking into account performance
conditions and the extent to which employees have rendered service to date,
with any changes in fair value recognised in the profit or loss for the year.
o) Dividends
Final dividends are recorded in the financial statements in the year in which they
are approved by the Company’s shareholders. Interim dividends are recorded in the
year in which they are approved and paid.
p) Share capital, Share premium and Other reserves
Ordinary shares are classified as equity. Share premium arises on the excess
between the fair value of the shares issued and the par value of the shares issued.
Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, against share premium. The par value
of shares repurchased and cancelled under the Group’s share buyback programme
is reclassified from Share capital to the Capital redemption reserve.
For a description of Other reserves, see Note 27.
q) Critical accounting judgements and key sources
of estimation uncertainty
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make judgements, estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities. Actual results could differ from these
estimates and any subsequent changes are accounted for with an effect on income
at the time such updated information becomes available.
Critical accounting judgements and key sources of estimation uncertainty in
determining the financial condition and results of the Group are those requiring
the greatest degree of subjective or complex judgement.
Critical accounting judgements relate to:
• non-underlying items (Note 4): the classification of items as non-underlying;
• store impairment indicator assessment (Note 12): use of indicators to assess those
stores (or groups of stores) where the carrying amount of store non-current assets
may not be recoverable, and should be tested for impairment; and
• lease accounting (Note 17): determining whether certain retail concession
contracts meet the definition of a lease under IFRS 16; and determining the lease
term for contracts where both an IFRS 16 lease exists and contains options to
extend or terminate early.
Key sources of estimation uncertainty relate to:
• goodwill impairment assessment (Note 11): revenue growth assumptions in Rest
of the World and other segments.
Management also considers that estimation uncertainty exists over the following
areas, but with a limited risk of material change to amounts recognised within the
next 12 months:
• discontinued operations (Note 8): measurement of contingent consideration
in relation to the sale of the High Street business;
• valuation of inventory: inventory is carried at the lower of cost and net realisable
value, which requires the estimation of sell-through rates, and the eventual sales
price of goods to customers in the future; and
• supplier income (Note 16): the amount and timing of recognition of
supplier income.
Notes to the financial statements continued
159 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
1. Material accounting policies continued
q) Critical accounting judgements and key sources
ofestimationuncertainty continued
Consideration of climate-related matters
In preparing the Financial statements, management has considered the potential
impacts of climate change, in the context of the Principal risks and TCFD
disclosures included in the Strategic report on pages 52 to 62 in the following areas:
• going concern assessment and viability of the Group over the next three years;
• cash flow forecasts used in the impairment assessments of non-current assets
including goodwill;
• carrying value and useful economic lives of property, plant and equipment,
right-of-use assets and intangible assets; and
• carrying value of inventories and valuation of other current assets.
Current assets, including inventories, are expected to be utilised within a short
timeframe, and therefore no risks relating to climate change have been identified.
The costs expected to be incurred in connection with our net zero commitments
(as described on pages 52 to 62) are included within the Group’s budget and
three-year plan, which have been used to support the impairment reviews of non-
current assets, including goodwill, and the going concern and viability assessments.
Further disclosures in relation to the impact of climate change on the impairment
assessment of right-of-use assets and property, plant and equipment are included
in Note 12, and on goodwill in Note 11.
The Group’s initial quantitative scenario analysis (as described on pages 52 to 62)
has determined that operational impacts are not expected to be significant within
the short-term forecast period. Beyond the forecast periods, the results of the
quantitative scenario analysis have been incorporated into the sensitivity analyses
of viability and goodwill impairment where appropriate; however, climate change
is not considered to be a key driver in determining the outcomes of these exercises
and is therefore not currently classified as a key source of estimation uncertainty
within our financial statements. This assessment will be kept under review
going forward.
2. Segmental analysis of results
IFRS 8 requires segment information to be presented on the same basis as that
used by the Chief Operating Decision Maker for assessing performance and
allocating resources. The Group’s operating segments are based on the reports
reviewed by the Board of Directors who are collectively considered to be the Chief
Operating Decision Maker.
Following the sale of the High Street and funkypigeon.com businesses during the
year, for management and financial reporting purposes, the continuing operations
of the Group are organised into three divisions and reportable segments – UK,
North America and Rest of the World and Other, all of which relate to the Group’s
Travel businesses with the exception of Cult Pens which was previously reported
as part of the High Street segment and is now presented within the renamed Rest
of the World and Other segment. The results of the discontinued operations of the
High Street segment are presented in Note 8.
The information presented to the Board is prepared in accordance with the
Group’s IFRS accounting policies, with the exception of IFRS 16, and is shown
below as Headline information in section b). A reconciliation to statutory measures
is provided below in accordance with IFRS 8, and in the Glossary on page 209
(Note A2).
a) Revenue
£m
2025
(restated
1
)
UK
834
795
North America
413
401
Rest of the World and Other
306
277
Revenue – continuing operations
1,553
1,473
Revenue – discontinued operations (Note 8)
358
445
Revenue – total operations
1,911
1,918
1 Comparative periods have been restated to separately disclose results from discontinued
operations (refer to Note 8 for further details)
Rest of the World revenue includes revenue from Australia of £85m (2024: £83m),
Ireland £64m (2024: £53m) and Spain £59m (2024: £55m). No other country has
individually material revenue in the context of total Group revenue.
160 WH Smith PLC Annual Report and Accounts 2025
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2. Segmental analysis of results continued
b) Group results
2025
2024 (restated
1
)
items
2
items
2
items
2
items
2
(pre-IFRS 16)
IFRS 16
Total
(pre-IFRS 16)
IFRS 16
Total
UK
130
–
1
131
122
–
4
126
North America
15
–
7
22
34
–
4
38
Rest of the World and Other
14
–
6
20
14
–
4
18
Group trading profit – continuing operations
159
–
14
173
170
–
12
182
Unallocated central costs
(25)
–
–
(25)
(28)
–
–
(28)
continuing operations
134
–
14
148
142
–
12
154
Non-underlying items (Note 4)
–
(91)
(8)
(99)
–
(41)
–
(41)
Group operating profit – continuing operations
134
(91)
6
49
142
(41)
12
113
Finance costs
(26)
–
(20)
(46)
(28)
–
(20)
(48)
Non-underlying finance costs (Note 4)
–
(1)
–
(1)
–
–
–
–
Profit before tax – continuing operations
108
(92)
(14)
2
114
(41)
(8)
65
Income tax expense
(45)
18
1
(26)
(29)
5
2
(22)
Profit/(loss) for the year – continuing operations
63
(74)
(13)
(24)
85
(36)
(6)
43
Profit/(loss) for the year – discontinued operations
11
(146)
22
(113)
25
(12)
4
17
Profit/(loss) for the year – total operations
74
(220)
9
(137)
110
(48)
(2)
60
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 8 for further details)
2 Presented on a pre-IFRS 16 basis. Alternative performance measures are defined and explained in the Glossary on page 209
Notes to the financial statements continued
161 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
2. Segmental analysis of results continued
c) Other segmental items
Non-current assets
1
amortisation
Impairment Depreciation
Impairment
UK
27
(22)
–
–
–
North America
48
(20)
–
–
–
Rest of the World and Other
12
(9)
–
–
–
Headline, before non-underlying items (pre-IFRS 16) – continuingoperations
87
(51)
–
–
–
Headline non-underlying items (pre-IFRS 16)
–
(3)
(24)
–
–
Headline, after non-underlying items (pre-IFRS 16) – continuingoperations
87
(54)
(24)
–
–
Impact of IFRS 16
–
–
–
(80)
–
Non-underlying items (IFRS 16)
–
–
–
–
(29)
Group – continuing operations
87
(54)
(24)
(80)
(29)
Group – discontinued operations
16
(10)
(76)
(18)
(62)
Group – total operations
103
(64)
(100)
(98)
(91)
1 Non-current assets including property, plant and equipment and intangible assets, but excluding right-of-use assets
162 WH Smith PLC Annual Report and Accounts 2025
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2. Segmental analysis of results continued
c) Other segmental items continued
2024 (restated
1
)
Non-current assets
2
amortisation
Impairment Depreciation
Impairment
UK
35
(20)
–
–
–
North America
60
(16)
–
–
–
Rest of the World and Other
20
(8)
–
–
–
Headline, before non-underlying items (pre-IFRS 16) – continuingoperations
115
(44)
–
–
–
Headline non-underlying items (pre-IFRS 16)
–
(3)
–
(14)
–
Headline, after non-underlying items (pre-IFRS 16) – continuingoperations
115
(47)
–
(14)
–
Impact of IFRS 16
–
–
(80)
2
–
Non-underlying items (IFRS 16)
–
–
–
–
(10)
Group – continuing operations
115
(47)
(80)
(12)
(10)
Group – discontinued operations
22
(17)
(32)
(8)
–
Group – total operations
137
(64)
(112)
(20)
(10)
1 Comparative periods have been restated to separately disclose results from discontinued operations (refer to Note 8 for further details)
2 Non-current assets including property, plant and equipment and intangible assets, but excluding right-of-use assets
Notes to the financial statements continued
163 WH Smith PLC Annual Report and Accounts 2025
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2. Segmental analysis of results continued
d) Non-current assets by geographical location
Non-current assets include property, plant and equipment, intangible assets and right-of-use assets.
£m
2025
(restated
1
)
UK
496
668
USA
426
483
Spain
87
102
Australia
22
19
Other international
37
39
Total
1,068
1,311
1 Comparative periods have been restated to present the geographical split of goodwill in accordance with the allocation to segmental businesses disclosed in Note 11
3. Group operating profit
2025
2024 (restated
1
)
items
Total
items
Total
Revenue
1,553
–
1,553
1,473
–
1,473
Cost of sales
(664)
–
(664)
(621)
–
(621)
Gross profit – continuing operations
889
–
889
852
–
852
Distribution costs
(611)
–
(611)
(572)
–
(572)
Administrative expenses
(135)
–
(135)
(135)
–
(135)
Other income
5
–
5
9
–
9
Non-underlying items (Note 4)
–
(99)
(99)
–
(41)
(41)
Group operating profit – continuing operations
148
(99)
49
154
(41)
113
1 Comparative periods have been restated a) to correct the accelerated supplier income recognition and inventory-related items in the North America division (refer to Note 1b for further
details), totalling a £20m reduction to previously reported cost of sales; b) to reclassify certain income amounting to £5m from cost of sales to other income for consistency with the current
period; c) to reclassify certain costs amounting to £43m from distribution costs to cost of sales for consistency with the current period; and d) to separately disclose results from discontinued
operations (refer to Note 8 for further details)
Notes to the financial statements continued
164 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
3. Group operating profit continued
£m from continuing operations
2025
(restated
1
)
Cost of inventory recognised as an expense
2
624
592
Write-down of inventory in the year
2
40
29
Depreciation of property, plant and equipment
45
38
Depreciation of right-of-use assets
80
80
Amortisation of intangible assets
9
9
Impairment of property, plant and equipment
24
11
Impairment of right-of-use assets
29
10
Impairment of intangible assets
–
1
– Expense relating to short-term leases
15
14
– Expense relating to variable lease payments not
included in the measurement of the lease liability
40
38
Other occupancy costs
24
21
Staff costs (Note 5)
268
271
1 Comparative periods have been restated a) to correct the accelerated supplier income
recognition and inventory-related items in the North America division (refer to Note 1b
for further details), totalling a £20m reduction to previously reported cost of sales; b)
to reclassify certain income amounting to £5m from cost of sales to other income for
consistency with the current period; c) to reclassify certain costs amounting to £43m
from distribution costs to cost of sales for consistency with the current period; and d) to
separately disclose results from discontinued operations (refer to Note 8 for further details)
2 Write-down of inventories in the year are reported within Cost of sales in the Income
statement and have been presented separately to Cost of inventories recognised
as an expense above. Prior period amounts have been restated to reflect this
separate presentation
£m
2025
2024
Fees payable to the Group’s auditors, included in the
income statement, relate to:
– Fees payable to the Group’s auditors for the audit of the
Group’s financial statements
3.2
1.2
– Fees payable to the Group’s auditors for other
services to the Group, including the audit of the
Company’s subsidiaries
0.5
0.4
Total audit and audit-related services
3.7
1.6
– All other non-audit services
0.2
0.1
Non-audit fees including taxation and other services
0.2
0.1
Total auditors’ remuneration
3.9
1.7
Included in Administrative expenses is the auditors’ remuneration, including
expenses, for audit and non-audit services, payable to the Group’s auditors
PricewaterhouseCoopers LLP and its associates as set out above. A description
of the work performed by the Audit Committee is set out in the Corporate
governance section of the Directors’ report and includes an explanation of how
auditor objectivity and independence are safeguarded when non-audit services are
provided by auditors.
4. Non-underlying items
Critical accounting judgement: Classification of non-underlying items
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. The Group’s definition of non-underlying items is outlined
in Note 1(a) and is applied consistently year on year. The classification of items as
non-underlying requires management judgement.
The charge is mainly non-cash. A tax credit of £18m (2024: £5m) has been
recognised in relation to non-underlying items from continuing operations.
165 WH Smith PLC Annual Report and Accounts 2025
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4. Non-underlying items continued
£m
2025
(restated
1
)
Amortisation of acquired intangible assets
3
3
– Property, plant and equipment
24
11
– Intangible assets
–
1
– Right-of-use assets
29
10
Provisions for onerous contracts
3
4
Transformation programmes – IT
11
4
Transformation programmes – supply chain
3
3
Transformation programmes – operational efficiencies
11
–
recognition of supplier income in North America
10
–
Impairment of other receivables
3
–
structure
1
4
Costs associated with pensions
–
2
IFRS 16 remeasurement gains
–
(3)
Other non-underlying costs
1
2
continuing operations
99
41
Finance costs associated with onerous contracts
1
–
continuing operations
100
41
Tax credit on non-underlying items
(18)
(5)
Non-underlying items, after tax – continuing operations
82
36
Non-underlying items, after tax – discontinued operations
137
10
Non-underlying items, after tax – total operations
219
46
1 Comparative periods have been restated to separately disclose results from discontinued
operations (refer to Note 8 for further details)
Amortisation of acquired intangible assets
Amortisation of acquired intangible assets primarily relates to the MRG
and InMotion brands (see Note 11).
Impairment of non-current assets
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 £53m (2024: £22m) was recorded
within non-underlying items for impairment of non-current assets, of which £24m
(2024: £11m) relates to property, plant and equipment, £nil (2024: £1m) relates to
intangible assets and £29m (2024: £10m) relates to right-of-use assets.
Of the total impairment charge, £5m (2024: £2m) is attributable to the UK operating
segment, £32m (2024: £10m) to North America and £16m (2024: £10m) to Rest of
World and Other. Impairment charges in the North America and Rest of 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.
Refer to Notes 11, 12 and 13 for details of impairment of intangible assets, property,
plant and equipment and right-of-use assets, respectively.
The impairment recognised on a pre-IFRS 16 basis is provided in the Glossary
on page 209.
Provisions for onerous contracts
A charge of £3m (2024: £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, which is typically less than one year. 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.
Transformation programmes – IT
Administrative expenses of £11m (2024: £4m) have been classified as non-
underlying in relation to a Board-approved IT transformation programme.
Notes to the financial statements continued
166 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
4. Non-underlying items continued
Transformation programmes – IT continued
The IT transformation programme includes one-off 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 and, due to the significance
of the programme, will span several years.
Transformation programmes – supply chain
Distribution costs of £3m (2024: £3m) have been classified as non-underlying in
relation to a Board-approved programme relating to supply chain. 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. The UK project concluded
in 2025.
Transformation programmes – operational efficiencies
Costs of £11m (2024: £nil) have been classified as non-underlying in relation to
Board-approved programmes relating to operational efficiencies. This programme
commenced in the year and includes £6m of distribution costs associated with
the restructuring of store and field management structures within the UK
segment, and £5m of administrative expenses related to 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.
Costs associated with the investigation into accelerated recognition of supplier
income in North America
Administrative expenses incurred during the year include £10m (2024: £nil) of
professional fees in relation to the investigation into accelerated recognition of
supplier income in North America.
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
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.
Cost relating to M&A activity and Group legal entity structure
Costs of £1m (2024: £4m) have been incurred arising from professional and legal
fees in relation to a reorganisation of the Group’s legal entity structure.
Non-underlying items – discontinued operations
Refer to Note 8 for further details.
5. Staff costs and employees
a) Staff costs
The aggregate remuneration of employees was:
£m
2025
(restated
1
)
Wages and salaries
239
236
Social security costs
23
20
Other pension costs
5
4
Share-based payments
1
11
Total Group – continuing operations
268
271
Total Group – discontinued operations
94
115
Total Group
362
386
1 Comparative periods have been restated to separately disclose results from discontinued
operations (refer to Note 8 for further details)
b) Employee numbers
The monthly average total number of employees (including executive directors)
was:
No. of employees
2025
1
Retailing (including retailing support functions)
14,172
13,867
Central support functions
63
54
Total Group
14 ,235
13,921
1 Employee numbers are presented for total operations. The current year employee numbers
include the average for 10 months to the date of disposal of High Street and the average for
12 months to the date of disposal of Funky Pigeon
167 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
6. Finance costs
£m
2025
(restated
1
)
Interest payable on bank loans and overdrafts
11
14
Interest on convertible bonds
15
14
Interest on lease liabilities
20
20
Non-underlying finance costs
1
–
Total Group – continuing operations
47
48
Total Group – discontinued operations
3
4
Total Group
50
52
1 Comparative periods have been restated to separately disclose results from discontinued
operations (refer to Note 8 for further details)
Interest on convertible bonds includes £5m (2024: £5m) coupon interest, £9m
(2024: £8m) non-cash debt accretion charges and £1m (2024: £1m) fee amortisation.
7. Income tax expense
£m
2025
(restated
1
)
Tax on profit
23
31
Adjustment in respect of prior years
(6)
(1)
Total current tax expense
17
30
Deferred tax – current year (Note 19)
27
–
Deferred tax – prior year (Note 19)
2
(5)
Deferred tax – change in tax rates (Note 19)
(2)
2
Tax on profit before non-underlying items
44
27
Tax on non-underlying items – current tax
(10)
–
Tax on non-underlying items – deferred tax (Note 19)
(8)
(5)
Total tax on profit – continuing operations
26
22
Total tax on (loss)/profit – discontinued operations
(3)
4
Total tax on profit – total operations
23
26
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 8 for further details)
Reconciliation of the taxation charge
£m
2025
(restated
1
)
1
17
5
3
Derecognition of deferred tax balances
31
2
Differences in overseas tax rates
1
3
Adjustment in respect of prior years – current tax
(6)
(1)
Adjustment in respect of prior years – deferred tax
2
(5)
Group relief for nil payment
(6)
–
Adjustment due to change in tax rates
(2)
3
Total income tax expense – continuing operations
26
22
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 8 for further details)
The effective tax rate
1
from continuing operations before non-underlying items
is 42 per cent (2024: 26 per cent). The UK corporation tax rate is 25 per cent effective
from 1 April 2023. The legislation implementing the Organisation for Economic
Co-Operation and Development’s (“OECD”) proposals for a global minimum
corporation tax rate (Pillar Two) was substantively enacted in the UK on 20 June
2023 and applies to reporting periods beginning on or after 1 January 2024.
Under the legislation, the Group is liable to pay a top-up tax for the difference
between their Global Anti-Base Erosion Rules (“GloBE”) effective tax rate per
jurisdiction and the 15% minimum rate. The rules are applicable to the Group for the
year ended 31 August 2025. The Group has performed an assessment of the Group’s
potential exposure to Pillar Two top-up taxes. Based on this assessment, the Pillar
Two effective tax rates in most of the jurisdictions in which the Group operates are
above 15% or will meet the financial thresholds required to meet the Transitional
Safe Harbour Rules. However, there are a limited number of jurisdictions where
the Transitional Safe Harbour relief does not apply, and the Pillar Two effective
rate is close to 15%. There is not a material exposure to Pillar Two taxes in those
jurisdictions. The Group applies the temporary exception from the accounting
requirements for deferred taxes in IAS 12. Accordingly, the Group neither recognises
nor discloses information about deferred taxes in relation to Pillar Two.
1 Presented on a pre-IFRS 16 basis. Alternative performance measures are defined
and explained in the Glossary on page 209
168 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
8. Discontinued operation
Other estimates: Measurement of contingent consideration in relation
to the sale of the High Street business
The fair value of the contingent consideration receivable from the sale is subject
to estimation uncertainty. Its measurement depends on assumptions about future
cash flows, the probability of different performance scenarios, and discount rates.
The worst-case scenario results in the Group receiving no additional consideration
and in adopting a cautious approach to the measurement basis, the Group
has valued the contingent consideration using this scenario. Changes in these
estimates over time could have an upside impact to the valuation.
During the year, the Group disposed of the High Street business and funkypigeon.
com, both of which were part of the High Street segment. These disposals are
classified as discontinued operations in accordance with IFRS 5 Non-current Assets
Held for Sale and Discontinued Operations.
Sale of High Street business
Overview of disposal
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. One element
of the contingent consideration entitles the Group to a share in the future cash
flows generated by the divested business through to 31 August 2026, while the
other is dependent on the timing and realisation of deferred tax assets within the
disposed business.
The total consideration has been measured at fair value at the date of disposal.
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.
This comparison resulted in the recognition of an impairment of £87m, which has
been allocated to the non-current assets within the disposal group and recognised
within discontinued operations in the consolidated income statement.
Contingent consideration receivable
The fair value at initial recognition was determined using a discounted cash
flow model, incorporating management’s best estimates of future cash flows
of the disposed business, timing of deferred tax realisation, probability-weighted
scenarios, and a market-based discount rate. These inputs reflect management’s
judgement using information available at the reporting date.
The valuation involves estimation uncertainty. The Group has performed sensitivity
analysis on key unobservable inputs, including variations in scenario probabilities
and discount rates.
No fair value changes have been recorded in profit or loss during the period.
Future changes in the fair value of the contingent consideration will be recognised
in profit or loss within non-underlying items. There were no transfers between levels
of the fair value hierarchy during the reporting period.
Sale of 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. funkypigeon.com Ltd was
reported within the High Street segment, represented a major line of business that
the Group exited as part of its strategic shift to become a travel-focused retailer and
has therefore been classified as a discontinued operation in accordance with IFRS 5.
One of the factors in concluding that funkypigeon.com Ltd constitutes a major line
of business was its inclusion within the High Street segment, which the Group has
exited as part of its strategic shift to become a travel-focused retailer. Its results are
presented within discontinued operations, together with those of the High Street
business. The assets and liabilities of funkypigeon.com Ltd were derecognised
from the Group’s consolidated statement of financial position upon completion
of the sale.
169 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
8. Discontinued operation continued
Financial Impact
The statutory results of the discontinued operations were as follows:
£m
2025
2024
Revenue
358
445
Operating expenses
(334)
(406)
Operating profit
24
39
Finance cost
(3)
(4)
Non-underlying items
(137)
(14)
(Loss)/profit before tax
(116)
21
Income tax credit/(expense)
3
(4)
(Loss)/profit for the year – discontinued operation
(113)
17
Non-underlying items principally include the following items:
• An impairment loss of £87m was recognised on the measurement of the High
Street business at the lower of its carrying amount and fair value less costs to sell.
This loss was allocated on a pro-rata basis to the non-current assets within the
High Street business, resulting in no gain or loss on disposal being recognised in
the Group’s income statement. In addition, an impairment charge of £51m was
recognised earlier in the year in relation to non-current assets, including goodwill,
following an impairment review triggered by indicators of impairment in the
first half of the financial year. Taken together, the total impairment of £138m
recognised across non-current assets during the year comprised £57m relating
to property, plant and equipment, £62m to right-of-use assets, £15m to goodwill,
and £4m to other intangible assets;
• The charge further includes £6m in respect of dilapidation liabilities, £5m relating
to store closure costs of High Street stores and £4m of other costs;
• The total charge to the non-underlying items outlined above amounts to £153m
that is partially offset by a gain on the sale of the funkypigeon.com, amounting
to £16m, resulting in the net charge of £137m in this financial year; and
• A tax credit of £nil (2023: £4m) has been recognised in relation to the above items.
The carrying amounts of assets and liabilities of the High Street business and
funkypigeon.com at the point of disposal were as follows:
£m
2025
Non-current assets
49
Current assets
98
Non-current liabilities
(111)
Current liabilities
(58)
Current and deferred tax
11
Carrying amount of net liabilities disposed
(11)
9. Dividends
Amounts paid and recognised as distributions to shareholders in the year are
as follows:
£m
2025
2024
29
–
14
–
–
27
–
14
43
41
The Board has proposed a final dividend of 6.0p per share, amounting to a final
dividend of c.£8m, which is not included as a liability in these financial statements
and, subject to shareholder approval, will be paid on 12 February 2026 to
shareholders registered at the close of business on 23 January 2026.
170 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

10. Earnings per share
a) Earnings
£m
2025
(restated
1
)
Profit for the year before non-underlying items,
attributable to equity holders of the parent –
51
73
Non-underlying items, after tax (Note 4)
(82)
(36)
(31)
37
(Loss)/profit for the year – discontinued operations
(113)
17
(144)
54
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 8 for further details)
b) Weighted average share capital
Number (millions)
2025
2024
Weighted average ordinary shares in issue
129
131
Less weighted average ordinary shares held in ESOP Trust
(2)
(2)
Weighted average shares in issue for earnings per share
127
129
2
2
129
131
c) Basic and diluted earnings per share
Pence
2025
(restated
1
)
40.2
56.6
Adjustment for non-underlying items
(64.6)
(27.9)
Basic (loss)/earnings per share – continuing operations
(24.4)
28.7
Basic (loss)/earnings per share – discontinued operations
(89.0)
13.2
Basic (loss)/earnings per share – total operations
(113.4)
41.9
Pence
2025
(restated
1
)
39.5
55.7
Adjustment for non-underlying items
(63.6)
(27.5)
Impact of antidilutive potential shares
(0.3)
–
Diluted (loss)/earnings per share – continuing
operations
(24.4)
28.2
Diluted (loss)/earnings per share – discontinued operations
(89.0)
13.0
Diluted (loss)/earnings per share – total operations
(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 8 for further details)
Diluted earnings per share takes into account various share awards and share
options, including SAYE schemes, which are expected to vest, and for which a sum
below fair value will be paid.
When the numerator in the earnings per share calculation is a loss, the weighted
average number of ordinary shares applied is the basic value, rather than the
diluted value, as the inclusion of potentially dilutive shares would improve the loss
per share. As at 31 August 2025, the convertible bond has no dilutive effect as the
inclusion of these potentially dilutive shares would improve earnings per share
(2024: no dilutive effect).
The calculation of earnings per share on a pre-IFRS 16 basis is provided in the
Glossary on page 209.
Notes to the financial statements continued
171 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
11. Intangible assets
Key source of estimation uncertainty: Short-term revenue growth assumptions
adopted for Rest of the World and Other segment in impairment testing for
indefinite-lived intangible assets, including goodwill
When an impairment test is performed, the recoverable amount is determined
based on value-in-use calculations. The key assumptions that underpin the
value-in-use calculations comprise revenue growth in the initial forecast period,
the pre-tax discount rate and the long-term growth rate. For the Rest of the
World and Other operating segment, reasonably possible changes to revenue
growth assumptions may result in the recoverable amount being equal to the
carrying value. Refer to information set out below for further detail, including
sensitivity analysis.
Goodwill of US$52m (£38m) (2024: US$58m/£44m) relating to the acquisition of the
InMotion Entertainment Group of companies in 2018 is expected to be deductible
for tax purposes in the future.
The carrying value of goodwill is allocated to the segmental businesses as follows:
£m
2025
2024
UK
256
262
North America
115
117
Rest of the World and Other
31
32
Group – continuing operations
402
411
High Street
–
15
Group – total operations
402
426
Included within Tenancy rights are certain assets that are considered to have
an indefinite life of £4m (2024: £4m), representing certain rights under tenancy
agreements, which include the right to renew leases; therefore, no amortisation has
been charged. Management has determined that the useful economic life of these
assets is indefinite because the Group can continue to occupy and trade from
certain premises for an indefinite period .
£m
Goodwill
franchise contracts
Tenancy rights
Software
Total
At 1 September 2024
426
44
12
144
626
Additions
–
–
–
7
7
Disposals
–
–
–
(1)
(1)
Disposals of businesses
(15)
–
(1)
(92)
(108)
Foreign exchange
(9)
(1)
–
–
(10)
At 31 August 2025
402
43
11
58
514
At 1 September 2024
–
16
8
112
136
Amortisation charge
–
3
–
10
13
Impairment charge
15
–
–
4
19
Disposals
–
–
–
(1)
(1)
Disposals of businesses
(15)
–
(1)
(83)
(99)
Foreign exchange
–
(1)
–
–
(1)
At 31 August 2025
–
18
7
42
67
Net book value at 31 August 2025
402
25
4
16
447
172 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
11. Intangible assets continued
£m
Goodwill
franchise contracts
Tenancy rights
Software
Total
At 1 September 2023
436
46
13
128
623
Additions
6
–
–
16
22
Foreign exchange
(16)
(2)
(1)
–
(19)
At 31 August 2024
426
44
12
144
626
At 1 September 2023
–
14
8
96
118
Amortisation charge
–
3
–
12
15
Impairment charge
–
–
–
5
5
Foreign exchange
–
(1)
–
(1)
(2)
At 31 August 2024
–
16
8
112
136
Net book value at 31 August 2024
426
28
4
32
490
Impairment of goodwill and other indefinite lived intangible assets
The Group tests goodwill and other indefinite-lived intangible assets, including
tenancy rights, for impairment annually or where there is an indication that
goodwill might be impaired. Other intangible assets, including acquired brand
and software, have been assessed for indicators of impairment during the year.
For impairment testing purposes, goodwill is allocated to groups of CGUs in a
manner that is consistent with our operating segments, as this reflects the lowest
level at which goodwill is monitored. All goodwill has arisen on acquisitions of
groups of retail stores. These acquisitions are then integrated into the Group’s
operating segments as appropriate.
Goodwill and acquired brands have been tested for impairment by comparing
the carrying amount of each group of CGUs (considered to be the Group’s three
continuing operating segments), including goodwill and acquired brands, with the
recoverable amount determined from value-in-use calculations. The value-in-use of
each group of CGUs has been calculated using cash flows derived from the Group’s
latest Board-approved budget and three-year plan, “the initial forecast period”.
Cash flows beyond the initial forecast period are extrapolated for up to two further
years using estimated mid-term growth rates, and then into perpetuity using
estimated long-term growth rates.
The key assumptions that underpin the value-in-use calculations comprise revenue
growth in the initial forecast period, the pre-tax discount rate and the long-term
growth rate.
Revenue growth assumptions over the initial forecast period (and other non-
key assumptions, including gross margin and cost inflation) are expected to
exceed long-term growth rate assumptions and were determined based on
management’s best estimates of market conditions and future achievable growth,
giving consideration to the extrapolation of historical trends within the Group and
external information on expected future trends.
The pre-tax discount rates are derived from the Group’s weighted average cost
of capital, which has been calculated using the capital asset pricing model, the
inputs of which include a risk-free rate, equity risk premium, Group size premium
and a risk adjustment (beta). Country-specific discount rates were not considered
to be materially different to the Group rate. The pre-tax discount rate used in the
calculations was 12.6 per cent (2024: 10.7 per cent).
173 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
11. Intangible assets continued
The long-term growth rate assumption is two per cent (2024: two per cent for the
Travel businesses), having considered a variety of external and industry data points.
The immediately quantifiable impacts of climate change and costs expected to
be incurred in connection with our net zero commitments, are included within
the Group’s budget and three-year plan which have been used to support the
impairment reviews, with no material impact on cash flows.
The value-in-use estimates indicated that the recoverable amount exceeded
the carrying value for each group of CGUs. As a result, no impairment has been
recognised in respect of the carrying value of goodwill in the year for these
segments (2024: £nil).
Management has considered a range of sensitivities for these segments in applying
reasonably possible changes to each of the key assumptions. Reasonably possible
changes to the long-term growth rate and discount rate, individually and in
combination, do not result in the recoverable amount reducing below the
carrying value.
Reasonably possible changes to revenue growth, in isolation or combined with
reasonably possible changes to other assumptions, could result in the recoverable
amount reducing below the carrying value for the Rest of World and Other
segment. The recoverable amount currently exceeds the carrying value by £36m for
this segment, but would be equal, if, in isolation, with approximately one third of the
impact mitigated by lower variable costs, revenues were to miss forecasts in each
year of the initial forecast period and the terminal value year by two per cent, or if
headline EBITDA were to miss forecasts by 13 per cent. In the UK and North America
segments, the recoverable amount would be equal to the carrying value if revenues
were to miss forecasts by 15 per cent and seven per cent respectively, which is not
considered reasonably possible.
Furthermore, outputs of the quantitative climate change scenario analysis
as described on pages 52 to 62 have also been taken into consideration in the
sensitivity analysis, and has shown that climate change is not considered to
be a key driver in determining the outcome.
Impairment of goodwill and other intangibles – discontinued operations
At the interim reporting period, following a period of challenging trading
conditions, a strategic review of the High Street business was undertaken and,
as a result, an impairment review of the goodwill associated with the High Street
business was performed. The recoverable amount was calculated using value-
in-use calculations of all CGUs that make up the High Street segment, based
on management’s assumptions regarding likely future trading performance.
This was compared to the carrying value of all CGUs, including goodwill, as
at 28 February 2025. As a result of this exercise, a non-cash charge of £15m
(2024: £nil) was recorded within non-underlying items for impairment of goodwill.
Impairment to software assets of £4m (2024: £4m) has been recorded within
discontinued operations during the year as a result of the Board-approved
transformation programmes.
174 WH Smith PLC Annual Report and Accounts 2025
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12. Property, plant and equipment
Critical accounting judgement: Store impairment reviews
Property, plant and equipment and right-of-use assets with definite useful lives at a store level are reviewed for impairment if events or changes in circumstances indicate
that the carrying amount may not be recoverable. For impairment testing purposes, the Group has determined that each store is a separate cash-generating unit (‘CGU’)
or in some cases a group of stores is considered to be a CGU where the stores do not generate largely independent cash inflows. The determination of indicators requires
judgement. Such indicators may include, but are not limited to: loss-making stores; planned store closures; stores that are marginally profitable but with a significant asset
base; and stores that have experienced a significant deterioration in performance in the year.
and vehicles
Total
At 1 September 2024
18
433
295
152
898
Additions
1
32
39
24
96
Disposals
–
(1)
(1)
(2)
(4)
Disposals of businesses
(19)
(193)
(120)
(66)
(398)
Foreign exchange
–
(4)
(2)
–
(6)
At 31 August 2025
–
267
211
108
586
At 1 September 2024
10
282
179
111
582
Depreciation charge
–
24
12
15
51
Impairment charge
5
42
27
7
81
Disposals
–
(1)
(1)
–
(2)
Disposals of businesses
(15)
(188)
(112)
(62)
(377)
Foreign exchange
–
(2)
(1)
–
(3)
At 31 August 2025
–
157
104
71
332
Net book value at 31 August 2025
–
110
107
37
254
Notes to the financial statements continued
175 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
12. Property, plant and equipment continued
and vehicles
Total
At 1 September 2023
18
385
254
140
797
Additions
–
57
46
12
115
Disposals
–
(4)
(3)
–
(7)
Foreign exchange
–
(5)
(2)
–
(7)
At 31 August 2024
18
433
295
152
898
At 1 September 2023
10
252
166
99
527
Depreciation charge
–
29
10
10
49
Impairment charge
–
6
7
2
15
Disposals
–
(4)
(3)
–
(7)
Foreign exchange
–
(1)
(1)
–
(2)
At 31 August 2024
10
282
179
111
582
Net book value at 31 August 2024
8
151
116
41
316
Impairment of store-based property, plant and equipment and right-of-use assets
For impairment testing purposes, the Group has determined that each store
is a separate cash-generating unit (“CGU”) or in some cases a group of stores is
considered to be a CGU where the stores do not generate largely independent
cash inflows. Grouping is limited to stores at the same airport and with the same
landlord, being the level at which decisions are made regarding the continuing or
disposing of store operations.
For those CGUs where an indicator of impairment has been identified, property,
plant and equipment and right-of-use assets have been tested for impairment
by comparing the carrying amount of the CGU with its recoverable amount
determined from value-in-use calculations. It was determined that value-in-use was
higher than fair value less costs to sell.
The value-in-use of CGUs is calculated in a consistent manner with and
underpinned by the same key assumptions as those described in note 11 for the
goodwill impairment assessment. Cash flows have been included for the remaining
lease life for the specific store.
The useful economic lives of store assets are short in the context of climate change
scenario models; therefore, no medium to long-term effects have been considered.
Where the value-in-use was less than the carrying value of the CGU, an impairment
of property, plant and equipment and right-of-use assets was recorded. The Group
has recognised an impairment charge of £81m (2024: £15m) to property, plant and
equipment and £91m (2024: £10m) to right-of-use assets.
Of the total impairment of property, plant and equipment and right-of-use
assets described above, £5m (2024: £2m) is attributable to the UK operating
segment, £32m (2024: £10m) to North America, £16m (2024: £9m exclusive of a
£1m impairment of intangible assets) to Rest of World and Other and £119m to the
High Street business, described further in Note 8. Impairment charges in the North
America and Rest of World and Other operating segments have principally arisen
due to a lower trading outlook in certain individual stores across these regions.
176 WH Smith PLC Annual Report and Accounts 2025
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12. Property, plant and equipment continued
Of the total impairment, £17m in North America relates to a full impairment of
one grouping of stores at Los Angeles airport, in-part from localised labour cost
pressures, of which £10m is attributable to property, plant and equipment and £7m
is attributable to right-of-use assets.
Included in the impairment values above are impairments of property, plant and
equipment connected with Board-approved programmes relating to supply chain
and IT transformation. Assets have been impaired where their use is planned to be
discontinued as a result of these programmes.
Management has considered a range of sensitivities in applying reasonably possible
changes to each of the key assumptions, both individually and in combination.
The sensitivities include increases in the discount rate by one per cent, and a
reduction in expected future cash flows of one per cent. Under these combined
scenarios, the impairment charge for property, plant and equipment and right-of-
use assets would increase by less than £1m.
Impairments to non-current assets have been presented as non-underlying items
(see Note 4).
The impairment assessment has also been performed on a pre-IFRS 16 basis.
See Glossary on page 209.
13. Right-of-use assets
buildings
Equipment
Total
At 1 September 2024
503
2
505
Additions
74
1
75
Modifications and remeasurements
1
–
1
Disposals
(3)
–
(3)
Disposals of businesses
(21)
(1)
(22)
Depreciation charge
(98)
–
(98)
Impairment charge
(90)
(1)
(91)
Net book value at 31 August 2025
366
1
367
buildings
Equipment
Total
At 1 September 2023
440
4
444
Additions
152
–
152
Modifications and remeasurements
48
–
48
Disposals
(8)
–
(8)
Depreciation charge
(110)
(2)
(112)
Impairment charge
(10)
–
(10)
(9)
–
(9)
Net book value at 31 August 2024
503
2
505
Information on the Group’s leasing activities is included in Note 17, Lease liabilities.
Impairment of right-of-use assets
Right-of-use assets of £91m (2024: £10m) have been impaired in the year.
This impairment charge has been presented in non-underlying items (see Note 4
and Note 8). The approach to impairment testing and results are described in detail
in Note 12, Property, plant and equipment.
Notes to the financial statements continued
177 WH Smith PLC Annual Report and Accounts 2025
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14. Trade and other receivables
£m
2025
(restated
1
)
Trade receivables
55
66
Other receivables
7
10
Prepayments
17
17
Accrued income
23
33
102
126
Other receivables
18
19
Prepayments
7
5
Total trade and other receivables
127
150
1 Comparative periods have been restated: i) to correct the accelerated supplier income
recognition in the North America division (refer to Note 1b for further details); and ii) for
consistency with the current period to reclassify certain receivables from Trade receivables
to Other receivables and from current to non-current
2 Other receivables include £17m (2024: £15m) due from non-controlling interest equity
shareholders in certain of the Group’s US subsidiaries that relate to contributions owed
towards property, plant and equipment construction for stores and are received in
accordance with the cash requirements of the subsidiary
Included in trade and other receivables are amounts related to supplier
arrangements. See Note 16 for details.
The ageing of the Group’s trade and other receivables is as follows:
£m
2025
2024
Trade and other receivables gross
91
100
Expected credit losses
(11)
(5)
Trade and other receivables net
80
95
on the reporting date
64
71
– Less than one month old
4
17
– Between one and three months old
5
3
– Between three and six months old
3
3
– Between six months and one year old
4
1
Trade and other receivables net carrying amount
80
95
An allowance has been made for lifetime expected credit losses from receivables
at 31 August 2025 of £11m (2024: £5m). The ageing analysis of these receivables is
given in the table below. This expected credit loss allowance reflects the application
of the Group’s provisioning policy in respect of bad and doubtful debts and is
based upon the difference between the receivable value and the estimated net
collectible amount. The Group establishes its provision for bad and doubtful debts
by reference to past default experience .
Notes to the financial statements continued
178 WH Smith PLC Annual Report and Accounts 2025
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14. Trade and other receivables continued
Ageing analysis of bad and doubtful debt provisions:
£m
2025
2024
Amounts not past due but impaired
4
–
Less than one month old
–
–
Between one and three months old
–
–
Between three and six months old
–
1
Between six months and one year old
3
4
Over one year overdue
4
–
11
5
No trade and other receivables that would have been past due or impaired were
renegotiated during the year. No interest is charged on the receivables balance.
The other classes within trade and other receivables do not include impaired assets.
The Group does not hold collateral over these balances. The directors consider that
the carrying amount of trade and other receivables approximates their fair value.
15. Trade and other payables
£m
2025
(restated
1
)
Trade payables
102
153
Other tax and social security
25
34
Other payables
77
83
Accruals
92
69
Deferred income
22
22
318
361
1 Comparative periods have been restated to correct the accelerated supplier income
recognition and inventory-related items in the North America division
Trade and other payables principally comprise amounts outstanding for trade
purchases and ongoing costs. The average credit period taken for trade purchases
is 55 days (2024: 59 days). The directors consider that the carrying amount of trade
and other payables approximates their fair value.
Trade payables are stated net of amounts receivable from suppliers in relation to
supplier income. See Note 16 for details.
16. Supplier income
Other estimates: Supplier income
Management is required to make estimates in determining the amount and
timing of recognition of supplier income for some transactions with suppliers.
In determining the amount of volume-related allowances recognised in any period,
management estimates the probability that the Group will meet contractual target
volumes, based on historical and forecast performance. The Group considers that
while there is inherent estimation, which has contributed towards the accelerated
recognition of supplier income and associated restatement of prior period financial
information in the North America division, there is limited risk of a material change
in the amounts recognised or disclosed in the next financial year. This in-part
reflects a high volume of low-value contracts with suppliers, with varying terms
of agreement.
Management considers the best indicator of the estimation undertaken is by
reference to supplier income balances not settled at the balance sheet date and
has therefore provided additional disclosures of supplier income amounts reflected
in the Group balance sheet.
Amounts related to supplier income held on the Balance Sheet are as follows:
£m
2025
(restated
1
)
Within inventories
(8)
(9)
Trade receivables
44
55
Accrued income
23
33
Trade payables
2
14
7
Deferred income
(20)
(15)
1 Comparative periods have been restated to correct the accelerated supplier income
recognition in the North America division (refer to Note 1b for further details)
2 Trade payables is stated net of £14m (2024: £7m) amounts receivable from suppliers in
relation to supplier income, that has been invoiced, for which the Group has the right to set
off against amounts payable at the balance sheet date
Notes to the financial statements continued
179 WH Smith PLC Annual Report and Accounts 2025
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17. Lease liabilities
Critical accounting judgement: Substantive substitution rights
Judgement is required in determining whether a contract meets the definition of
a lease under IFRS 16. Management has determined that certain retail concession
contracts give the landlord substantive substitution rights because the contract
gives the landlord rights to relocate the retail space occupied by the Group.
In such cases, management has concluded that there is not an identified asset
and therefore such contracts are outside the scope of IFRS 16. For these contracts,
the Group recognises the payments as an operating expense on a straight-
line basis over the term of the contract unless another systematic basis is more
representative of the time pattern in which economic benefits from the underlying
contract are consumed.
Critical accounting judgement: Determination of lease term
In determining the lease term for contracts that have options to extend or
terminate early at the Group’s discretion, management has applied judgement in
determining the likelihood of whether such options will be exercised. This includes
consideration of the length of time remaining before the option is exercisable,
performance of the individual store and the trading forecasts.
buildings
Equipment
Total
At 1 September 2024
625
1
626
Additions
74
1
75
Modifications and remeasurements
(2)
–
(2)
Disposals
(3)
–
(3)
Disposals of businesses
(96)
(1)
(97)
Interest
23
–
23
Payments
(136)
–
(136)
(2)
–
(2)
At 31 August 2025
483
1
484
buildings
Equipment
Total
At 1 September 2023
564
2
566
Additions
148
–
148
Modifications and remeasurements
47
–
47
Disposals
(12)
–
(12)
Interest
25
–
25
Payments
(135)
(1)
(136)
(12)
–
(12)
At 31 August 2024
625
1
626
£m
2025
2024
Non-current
394
501
Current
90
125
Total
484
626
The Group leases land and buildings for its retail stores, distribution centres, storage
locations and office property. Some leases include an option to break before the
end of the contract term or an option to renew the lease for an additional term after
the end of the term. Management assesses the lease term at inception based on
the facts and circumstances applicable to each property. Other leases are mainly
forklift trucks for the retail stores and distribution centres, office equipment and
vehicles. The Group’s average remaining lease term is five years.
The Group reviews the retail lease portfolio on an ongoing basis, taking into account
retail performance and future trading expectations. The Group may exercise
extension options, negotiate lease extensions or modifications. In other instances,
the Group may exercise break options, negotiate lease reductions or decide not to
negotiate a lease extension at the end of the lease term. Certain property leases
contain rent review terms that require rent to be adjusted on a periodic basis, which
may be subject to market rent or increases in inflation measurements.
Notes to the financial statements continued
180 WH Smith PLC Annual Report and Accounts 2025
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17. Lease liabilities continued
Many of the Group’s property leases, particularly in Travel locations, also incur
payments based on a percentage of revenue (variable lease payments) achieved
at the location. In line with IFRS 16, variable lease payments which are not based
on an index or rate are not included in the lease liability. See Note 3 for the expense
charged to the Income statement relating to variable lease payments not included
in the measurement of the lease liability.
The Group’s accounting policy for leases is set out in Note 1. Details of Income
statement charges for leases are set out in Note 3. The right-of-use asset categories
on which depreciation is incurred are presented in Note 13. Interest expense
incurred on lease liabilities is presented in Note 6. The maturity of undiscounted
future lease liabilities are set out in Note 23.
Cash outflows for leases related to the Group’s continuing operations in the
financial year was £156m (2024: £134m). This includes cash outflow for short-term
leases of £14m (2024: £11m) and variable lease payments (not included in the
measurement of lease liability) of £40m (2024: £32m).
18. Provisions
provisions
Total
At 1 September 2024
15
2
17
Charge in the year
9
–
9
Released in the year
(3)
–
(3)
Utilised in year
(8)
–
(8)
Unwinding of discount
1
–
1
Reclassifications to creditors
(3)
–
(3)
Disposals of businesses
(10)
(2)
(12)
At 31 August 2025
1
–
1
provisions
Total
At 1 September 2023
17
–
17
Charge in the year
4
2
6
Released in the year
(1)
–
(1)
Utilised in year
(2)
–
(2)
Reclassifications to creditors
(3)
–
(3)
At 31 August 2024
15
2
17
Total provisions are split between current and non-current liabilities as follows:
£m
2025
2024
Included in current liabilities
1
4
Included in non-current liabilities
–
13
1
17
Property provisions principally relate to reinstatement liabilities for stores and
certain onerous property contracts. Expected costs of store closures are reviewed
frequently and are based on information available as at the reporting date as well
as management’s historical experience of similar transactions. Utilisations of the
property provisions are expected to be incurred in line with the profile of the leases
to which they relate.
Notes to the financial statements continued
181 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
19. Deferred tax
The following are the deferred tax liabilities and assets recognised by the Group and movements thereon during the current and prior years.
1 September
Rate change
income
2
Accelerated tax depreciation
(10)
–
(3)
–
(7)
(20)
IFRS 16 transitional adjustment
3
–
(1)
–
(2)
–
Share-based payments
6
–
(6)
–
–
–
Intangible assets
(13)
–
(1)
–
–
(14)
Losses carried forward
14
2
(9)
–
(2)
5
Unutilised interest expense
14
–
(5)
–
–
9
Other temporary differences
23
–
6
–
–
29
Year ended 31 August 2025
37
2
(19)
–
(11)
9
Accelerated tax depreciation
(11)
–
1
–
–
(10)
IFRS 16 transitional adjustment
5
–
(2)
–
–
3
Share-based payments
6
–
1
(1)
–
6
Intangible assets
(14)
–
1
–
–
(13)
Losses carried forward
1
32
(2)
(16)
–
–
14
Unutilised interest expense
8
–
6
–
–
14
Other temporary differences
19
–
4
–
–
23
Year ended 31 August 2024
45
(2)
(5)
(1)
–
37
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 8 for further details)
2 Includes £2m credit to income (2024: £15m charge to income) in relation to discontinued operations
£m
2025
2024
Capital losses
5
81
Trading losses
125
48
130
129
Substantially all of the deferred income tax assets are expected to be recovered after more than one year.
The UK corporation tax rate is 25 per cent.
182 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Notes to the financial statements continued
19. Deferred tax continued
At 31 August 2025, deferred tax assets have been recognised in respect of tax losses
and US unutilised interest expense. The deferred tax assets on losses of £26m
(2024: £60m) relate to carried forward tax losses which have been recognised to
the extent that they will be recoverable using the estimated future taxable income
based on the approved budgets for the Group. The Group has not recognised
deferred tax assets on losses amounting to £130m (2024: £129m) and US unutilised
interest expense amounting to £53m (2024: £23m) due to uncertainty over
the timing and extent of their utilisation. These losses can be carried forward
indefinitely and have no expiry date. Other temporary differences include amounts
in respect of right-of-use assets (deferred tax asset of £29m (2024: £31m), with an
offsetting deferred tax liability of £34m (2024: £24m)).
All deferred tax assets and liabilities are offset where there is considered to be a
legally enforceable right to do so. The following is an analysis of the deferred tax
balances (after offset) for financial reporting purposes:
£m
2025
(restated
1
)
Deferred tax liabilities (non-current liabilities)
(7)
–
Deferred tax assets
16
37
9
37
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)
20. Analysis of net debt
Movements in net debt can be analysed as follows:
credit facility
Leases
equivalents
Net debt
At 1 September 2024
(310)
(117)
(626)
(1,053)
56
(997)
Business disposals
–
–
97
97
–
97
Bond accretion and fee amortisation
(10)
–
–
(10)
–
(10)
Lease additions, disposals, modifications and interest
–
–
(93)
(93)
–
(93)
Cash movements
–
(24)
136
112
15
127
Currency translation
–
–
2
2
–
2
At 31 August 2025
(320)
(141)
(484)
(945)
71
(874)
credit facility
Leases
equivalents
Net debt
At 1 September 2023
(301)
(84)
(566)
(951)
56
(895)
Bond accretion and fee amortisation
(9)
–
–
(9)
–
(9)
Lease additions, disposals, modifications and interest
–
–
(208)
(208)
–
(208)
Cash movements
–
(33)
136
103
–
103
Currency translation
–
–
12
12
–
12
At 31 August 2024
(310)
(117)
(626)
(1,053)
56
(997)
183 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
20. Analysis of net debt
An explanation of alternative performance measures, including net debt on a pre-
IFRS 16 basis, is provided in the Glossary on page 209.
Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits with an original maturity of three months or less. The carrying amount of
these assets approximates to their fair value.
Lease liabilities
Non-cash movements in lease liabilities mainly relate to new leases, modifications,
measurements and interest in the year. Cash movements on leases include
principal repayments of £116m (2024: £112m) and interest paid of £20m
(2024: £24m).
Revolving credit facilities
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 RCF is provided by a syndicate of banks: Barclays Bank PLC, BNP Paribas,
Citibank N.A. London Branch, Fifth Third Bank National Association, HSBC UK
Bank PLC, JP Morgan Securities PLC, PNC Capital Markets LLC, Banco Santander
SA London Branch and Skandinaviska Enskilda Banken AB (PUBL). Utilisation is
interest bearing at a margin over SONIA. As at 31 August 2025, the Group has drawn
down £141m on the RCF (2024: £117m).
Transaction costs of £5m relating to the RCF have been capitalised and are
amortised to the Income statement on a straight-line basis.
Convertible bonds
The Group issued £327m guaranteed senior unsecured convertible bonds on 7 May
2021 with a 1.625 per cent per annum coupon payable semi-annually in arrears in
equal instalments. The bonds are convertible into new and/or existing ordinary
shares of WH Smith PLC. The initial conversion price was set at £24.99 representing
a premium of 40 per cent above the reference share price on 28 April 2021 (£17.85).
The conversion price at 31 August 2025 was £23.3660 (2024: £24.3104). If not
previously converted, redeemed or purchased and cancelled, the bonds will be
redeemed at par on 7 May 2026.
The convertible bond is a compound financial instrument, consisting of a financial
liability component and an equity component, representing the value of the
conversion rights. The initial fair value of the liability portion of the convertible bond
was determined using a market interest rate for an equivalent non-convertible
bond at the issue date. The liability is subsequently recognised on an amortised
cost basis using the effective interest rate method until extinguished on conversion
or maturity of the bonds. The remainder of the proceeds was allocated to the
conversion option and recognised in equity (Other reserves), and not subsequently
remeasured. As a result, £41m of the initial proceeds of £327m was recognised in
equity representing the option component.
Transaction costs of £6m were allocated between the two components and the
element relating to the debt component of £5m is amortised through the effective
interest rate method. The issue costs apportioned to the equity component of £1m
have been deducted from equity.
New financing in the year
During the year, the Group announced new financing arrangements to diversify
the Group’s sources of debt financing and to extend the Group’s debt maturity
profile in advance of the convertible bond maturing on 7 May 2026.
Term loans
The Group entered into a three-year £120m committed term loan. The term loan
has two uncommitted extension options of one year, which would, subject to lender
approval, extend the maturity date to 24 March 2030.
The term loan is provided by a syndicate of banks: Fifth Third Bank National
Association, HSBC UK Bank PLC, Banco Santander SA London Branch and
Skandinaviska Enskilda Banken AB (PUBL). Utilisation is interest bearing at a
margin over SONIA. As at 31 August 2025, the term loan is undrawn.
Transaction costs of £1m relating to the term loan have been capitalised and are
amortised to Income statement on a straight-line basis.
US private placements
The Group entered into £200m of committed US private placement notes (“USPP”)
which have a tenor of seven, ten and 12 years.
Utilisation is interest bearing at a fixed rate. As at 31 August 2025, the USPP notes
are undrawn.
Transaction costs of £1m relating to the USPP have been capitalised and are
amortised to Income statement on a straight-line basis.
Backstop facility
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 syndicated loan is undrawn.
184 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Notes to the financial statements continued
20. Analysis of net debt continued
The facility is provided by a syndicate of banks: PNC Capital Markets LLC, J.P.
Morgan Securities PLC, BNP Paribas, London Branch and Skandinaviska Enskilda
Banken AB (PUBL).
Further information regarding the Group’s borrowings and revolving credit facilities
is provided in Note 23.
21. Contingent liabilities and capital commitments
£m
2025
2024
76
71
Bank guarantees are principally in favour of landlords and could be drawn down on
by landlords in the event that the Group does not settle its contractual obligations
under lease or other agreements.
Contracts placed for future capital expenditure approved by the directors but not
provided for in these financial statements amount to £66m (2024: £62m).
£m
2025
(restated
1
)
Commitments in respect of property, plant and equipment
65
60
Commitments in respect of other intangible assets
1
2
66
62
1 Comparative periods have been restated to correct the previously reported commitments
Following the publication of an HMRC newsletter on 24 October 2024, the Group
has become aware of a difference in interpretation of the rules on the calculation of
the tax due between the Trustee and HMRC on the surplus arising from the buyout
of the defined benefit pension scheme. As a result, the Group could be required to
reimburse the Trustee £6m. This has not been recorded as a liability in the financial
statements of the Group as at 31 August 2025, with the probability of an outflow
considered possible, rather than probable.
22. Cash generated from continuing operations
£m
2025
(restated
1
)
Group operating profit – continuing operations
49
113
Depreciation of property, plant and equipment
45
38
Impairment of property, plant and equipment
24
11
Amortisation of intangible assets
9
9
Impairment of intangible assets
–
1
Depreciation of right-of-use assets
80
80
Impairment of right-of-use assets
29
10
Non-cash change in lease liabilities
–
(3)
Non-cash movement in pensions
–
1
Share-based payments
3
9
Gain on remeasurement of leases
(1)
(4)
Other non-cash items (incl. foreign exchange)
(1)
1
Increase in inventories
(22)
(13)
Decrease/(increase) in receivables
9
(22)
Increase in payables
33
17
Receipt of retirement benefit surplus
75
–
(2)
1
Cash generated from continuing operations
330
249
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), to re-present settlement receipts for swap contracts as investing activities
(refer to Note 1b for further details) and to separately disclose results from discontinued
operations (refer to Note 8 for further details)
185 WH Smith PLC Annual Report and Accounts 2025
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23. Financial instruments
Categories of financial instruments:
£m
2025
(restated
1
)
Non-current investments at fair value through profit or loss
4
–
Receivables at amortised cost
2
103
128
Cash and cash equivalents
71
56
Amortised cost
3
(1,216)
(1,358)
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 8 for further details)
2 Included within receivables held at amortised cost are trade and other receivables
(excluding prepayments)
3 Included within amortised cost are trade payables, other payables, accruals, borrowings,
lease obligations and other non-current liabilities
Comparison of carrying values and fair values
The carrying value of the convertible bond on the Group’s balance sheet is £320m
(2024: £310m). The fair value of the convertible bond has been estimated at £320m
(2024: £303m) using a discounted cash flow approach based on market interest rates.
This represents Level 2 fair value measurements as defined by IFRS 13.
There were no material differences between the carrying value of non-derivative
financial assets and other financial liabilities and their fair values as at the balance
sheet date.
Risk management
The Group’s treasury function seeks to reduce exposures to interest rate, foreign
exchange and other financial risks, and to ensure liquidity is available to meet the
foreseeable needs of the Group and to invest cash assets safely and profitably.
The Group does not engage in speculative trading in financial instruments and
transacts only in relation to underlying business requirements. The Group’s treasury
policies and procedures are periodically reviewed and approved by the Group’s
Audit Committee and are subject to regular Group Internal Audit review.
Capital risk
The Group’s objectives with respect to managing capital (defined as net debt plus
equity) are to safeguard the Group’s ability to continue as a going concern, in order
to optimise returns to shareholders and benefits for other stakeholders, through an
appropriate balance of debt and equity funding. Refer to Note 20 for the value of
the Group’s net debt and refer to the Group statement of changes in equity for the
value of the Group’s equity.
In managing the Group’s capital levels, the Board regularly monitors the level of
debt in the business, the working capital requirements, forecast financing and
investing cash flows. Based on this analysis, the Board determines the appropriate
return to investors, while ensuring sufficient capital is retained in the business
to meet its strategic objectives. The Board has a progressive dividend policy and
expects that, over time, dividends would be broadly covered two and a half times
by earnings calculated on a normalised tax basis.
The Group has issued £327m of guaranteed senior unsecured convertible
bonds due in May 2026. The total bond offering of £327m covers a five-year term
beginning on 7 May 2021 with a 1.625 per cent per annum coupon payable semi-
annually in arrears in equal instalments. The bonds are convertible into new and/
or existing ordinary shares of the WH Smith PLC. The initial conversion price was
set at £24.99, representing a premium of 40 per cent above the reference share
price on 28 April 2021 (£17.85). The conversion price at 31 August 2025 is £23.3660
(2024: £24.3104).
Notes to the financial statements continued
186 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
23. Financial instruments continued
Capital risk continued
If not previously converted, redeemed or purchased and cancelled, the Bonds
will be redeemed at par on 7 May 2026.
The Group has in place a £400m committed multi-currency revolving credit
facility and during the year, the Group entered into a £120m term loan as well as
£200m of US private placement notes (“USPP”) which have a tenor of seven, ten
or 12 years. The new financing arrangements are to diversify the Group’s sources
of debt financing and to extend the Group’s debt maturity profile in advance of
the convertible bond maturity.
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: PNC
Capital Markets LLC, J.P. Morgan Securities PLC, BNP Paribas, London Branch and
Skandinaviska Enskilda Banken AB (PUBL).
The majority of the Group’s debt facilities have covenants, tested half-yearly, which
are based on fixed charges cover and leverage.
Liquidity risk
The Group manages its exposure to liquidity risk by reviewing the cash resources
required to meet its business objectives through both short- and long-term cash
flow forecasts. The Group has a committed multi-currency revolving credit facility
with a number of financial institutions, which is available to be drawn for general
corporate purposes including working capital. The facility is due to mature on
13 June 2030. The Group has a policy of pooling cash flows in order to optimise the
return on surplus cash and also to utilise cash within the Group to reduce the costs
of external short-term funding.
The table below shows the maturity analysis of the undiscounted remaining
contractual cash flows of the Group’s financial liabilities:
5 years
Total
Bank loans and overdrafts
473
–
–
–
473
Trade and other payables
271
–
–
–
271
Lease liabilities
108
100
202
151
561
Total cash flows
852
100
202
151
1,305
2024 restated
1
(£m)
5 years
Total
Bank loans and overdrafts
122
331
–
–
453
Trade and other payables
1
305
–
–
–
305
Lease liabilities
146
123
273
186
728
Total cash flows
573
454
273
186
1,486
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)
187 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
23. Financial instruments continued
Credit risk
Credit risk is the risk that a counterparty may default on their obligation to
the Group in relation to lending, hedging, settlement and other financial
activities. The Group’s principal financial assets are trade and other receivables,
and bank balances and cash, which are considered to have low credit risk on
initial recognition.
The Group has credit risk attributable to its trade and other receivables, including
a number of sale or return contracts with suppliers. The amounts included in the
balance sheet are net of allowances for expected credit losses. The Group has
adopted the simplified approach to calculating expected credit losses allowed
by IFRS 9. Historical credit loss rates are applied consistently to groups of financial
assets with similar risk characteristics. These are then adjusted for known changes
in, or any forward-looking impacts on, creditworthiness.
Trade receivables are written off when there is no reasonable expectation of
recovery. Indicators that credit risk might have increased significantly include the
failure of the debtor to engage in a payment plan and failure to make contractual
payments within 90 days past due, which is in line with historical experience of
increased credit risk. Indicators that an asset is credit-impaired would include
observable data in relation to the financial health of the debtor or if the debtor
breaches contract.
The Group has low retail credit risk due to the transactions being principally
high volume, low-value and of short maturity. The Group has no significant
concentration of credit risk, with the exposure spread over a large number of
counterparties and customers.
The credit risk on liquid funds and derivative financial instruments is considered
to be low, as the Board-approved Group treasury policy limits the value that can
be placed with each approved counterparty to minimise the risk of loss. These limits
are based on credit ratings.
The carrying amount of financial assets recorded in the financial statements
represents the Group’s maximum exposure to credit risk. The Group does not hold
collateral over any of these financial assets.
Interest rate risk
The Group is exposed to cash flow interest rate risk on floating rate products.
At 31 August 2025, the Group had drawn down £141m (2024: £117m) from its £400m
committed revolving credit facility. When the Group draws on this facility, it does
not view any drawdown as long-term in nature and therefore does not enter into
interest rate derivatives to mitigate this risk.
Foreign currency risk
Foreign exchange rate risk is the risk that the fair value of future cash flows of a
financial instrument will fluctuate because of the changes in foreign exchange
rates. The Group’s foreign currency exposures are principally to the US dollar,
Euro and Australian dollar. The Group’s treasury function uses financial instruments
to mitigate foreign exchange risk, in line with treasury policies approved by the
Board. Financial instruments include foreign exchange contracts, deposits and
bank loans.
The Group uses forward foreign exchange contracts to hedge significant future
transactions and cash flows denominated in currencies other than pounds sterling.
The hedging instruments have been used to hedge purchases in US dollars and
sales in Euros and to minimise foreign exchange risk in movements of the USD/
GBP and EUR/GBP exchange rates. These are designated as cash flow hedges.
At 31 August 2025 the Group had no material unhedged currency exposures.
The Group’s US dollar, Euro and Australian dollar exposure is principally operational
and arises mainly through the operation of retail stores in North America, France,
Ireland, Spain, Germany, Netherlands, Italy and Australia. The Group does not use
derivatives to hedge balance sheet and profit and loss translation exposure.
The fair value of cash flow hedges recognised within derivative assets/liabilities
is £nil (2024: £nil).
At 31 August 2025, the total notional amount of outstanding forward foreign
exchange contracts to which the Group has committed is US$9m (2024: US$30m)
and EUR23m (2024: EUR23m). These instruments will be used to hedge cash flows
occurring up to one year from the balance sheet date.
188 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
23. Financial instruments continued
Gains of £nil (2024: £nil) have been transferred to the income statement and gains
of £nil (2024: £nil) have been transferred to inventories in respect of contracts that
matured during the year ended 31 August 2025. In the year to 31 August 2025, the
fair value loss on the Group’s currency derivatives that are designated and effective
as cash flow hedges amounted to £nil (2024: £nil).
All the derivatives held by the Group at fair value are considered to have fair values
determined by Level 2 inputs as defined by the fair value hierarchy. There are no
non-recurring fair value measurements nor have there been any transfers of assets
or liabilities between levels of the fair value hierarchy.
Sensitivity analysis as at 31 August 2025
Financial instruments affected by market risks include borrowings, deposits and
derivative financial instruments. The following analysis, required by IFRS 7 Financial
Instruments: Disclosures, is intended to illustrate the sensitivity to changes in
market variables, being UK interest rates, and USD/GBP, EUR/GBP and AUD/GBP
exchange rates.
The following assumptions were made in calculating the sensitivity analysis:
• Exchange rate fluctuations on currency derivatives that form part of an effective
cash flow hedge relationship affect the hedging reserve in equity and the fair
value of the hedging derivatives.
• Year end exchange rates applied in the analysis are USD/GBP 1.3497/1
(2024: 1.3167/1), EUR/GBP 1.1570/1 (2024: 1.1887/1) and AUD/GBP 2.0653/1
(2024: 1.9352/1).
• Group debt and hedging activities reflect the positions at 31 August 2025 and
31 August 2024 respectively. As a consequence, the analysis relates to the position
at those dates and is not necessarily representative of the years then ended.
The above assumptions are made when illustrating the effect on the Group’s
income statement and equity given reasonable movements in foreign exchange
and interest rates before the effect of tax. The Group considers a reasonable interest
rate movement in GBP SONIA/base rate to be one per cent. Similarly, sensitivity to
movements in USD/GBP, EUR/GBP and AUD/GBP exchange rates of ten per cent
are shown, reflecting changes of reasonable proportion in the context of movement
in those currency pairs over time.
Using these assumptions, the following table shows the illustrative effect on the
Group income statement and equity.
2025
2024 (restated
1
)
(1)
–
(1)
–
3
(13)
(1)
(34)
(1)
–
(1)
–
–
(1)
–
(1)
1
–
1
–
(4)
15
1
46
2
(4)
1
(3)
–
1
–
1
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 8 for further details)
189 WH Smith PLC Annual Report and Accounts 2025
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24. Called up share capital
Allotted and fully paid
Ordinary shares of 22
6
⁄ 67 p
At 1 September 2024
131
29
Purchase of own shares for cancellation
(5)
(1)
At 31 August 2025
126
28
At 1 September 2023 and at 31 August 2024
131
29
There was no effect on share premium from current or prior year allotment
of ordinary shares.
The holders of ordinary shares are entitled to receive dividends as declared from
time to time and are entitled to one vote per share at the meetings of the Company.
The ESOP reserve of £25m (2024: £27m) represents the cost of shares in WH Smith
PLC purchased in the market and held by the WH Smith Employee Benefit Trust
to satisfy awards and options under the Group’s executive share schemes. The total
shareholding is 1,758,319 (2024: 1,892,970).
Notes to the financial statements continued
25. Share-based payments
Summary of movements in awards and options
schemes
LTIPs
PSP
awards
Total
Outstanding at 1 September 2024
320,316
4,357,587
707,585
42,233
5,427,721
Options and awards granted
–
1,719,025
374,417
–
2,093,442
Options and awards exercised
(4,481)
–
(107,801)
(4,455)
(116,737)
Options and awards lapsed/cancelled
(195,699)
(987,832)
(158,302)
–
(1,341,833)
Outstanding at 31 August 2025
120,136
5,088,780
815,899
37,778
6,062,593
Exercisable at 31 August 2025
90
10,764
65,688
841
77,383
Outstanding at 1 September 2023
433,149
3,331,230
487,099
111,934
4,363,412
Options and awards granted
–
1,649,091
367,058
–
2,016,149
Options and awards exercised
–
–
(45,941)
–
(45,941)
Options and awards lapsed/cancelled
(112,833)
(622,734)
(100,631)
(69,701)
(905,899)
Outstanding at 31 August 2024
320,316
4,357,587
707,585
42,233
5,427,721
Exercisable at 31 August 2024
141,665
10,764
40,512
–
192,941
190 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
25. Share-based payments continued
Summary of movements in awards and options continued
Pence
2025
2024
– Outstanding at the beginning of the year
80.17
134.87
– Exercised in the year
53.74
–
– Lapsed in the year
200.93
169.29
– Outstanding at the end of the year
26.27
80.17
– Exercisable at the end of the year
1.63
1,027.94
Detail of movements in options and awards LTIPs
Under the terms of the LTIP, executive directors and key senior executives may be
granted conditional awards to acquire ordinary shares in the Company (in the form
of nil cost options) which will only vest and become exercisable to the extent that
the related performance targets are met.
Outstanding awards granted under the LTIPs are as follows:
Date of grant
2025
2024
price (pence)
Exercise period
20 October 2016
8,404
8,404
Nil
Oct 2019 – 20.10.26
26 October 2017
2,360
2,360
Nil
Oct 2020 – 26.10.27
19 November 2020
697,620
653,125
Nil
Nov 2025 – 19.11.30
19 November 2021
717,748
946,424
Nil
Nov 2026 – 19.11.31
21 November 2022
1,089,173
1,132,460
Nil
Nov 2027 – 21.11.32
27 April 2023
49,579
50,996
Nil
Nov 2027 – 21.11.32
14 September 2023
–
179,640
Nil
Nov 2028 – 21.11.32
16 November 2023
1,150,707
1,347,425
Nil
Nov 2028 – 16.11.33
1 February 2024
36,753
36,753
Nil
Nov 2028 – 16.11.33
12 September 2024
9,003
–
Nil
Nov 2028 – 16.11.33
21 November 2024 (a)
643,227
–
Nil
Nov 2027 – 21.11.32
21 November 2024 (b)
684,206
–
Nil
Nov 2029 – 21.11.34
5,088,780
4,357,587
Awards will first become exercisable on the vesting date, which is the third
anniversary of the date of grant. Awards made on or after October 2016 may be
subject to holding periods preventing the delivery and sale of shares until the fifth
anniversary of the date of grant. For awards made in October 2016 and October
2017, the holding period applies to 50 per cent of any shares which vest. For awards
made between November 2018 and September 2024, the holding period applies
to 100 per cent of any shares that vest. For awards made in November 2024, the
holding period applies only to those shares awarded to the executive directors and
certain other senior executives (shown in the table above as 21 November 2024
(b)). The awards will accrue dividends paid over the performance and any holding
period. LTIP awards are equity-settled.
191 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
25. Share-based payments continued
Sharesave Scheme
Under the terms of the Sharesave Scheme, the Board grants options to purchase
ordinary shares in the Company to employees with at least three months service
who enter into an HM Revenue & Customs approved Save-As-You-Earn (“SAYE”)
savings contract for a term of three years. Options are granted at up to a 20 per cent
discount to the market price of the shares on the date of offer and are normally
exercisable for a period of six months after completion of the SAYE contract.
SAYE options are equity-settled.
Outstanding options granted under the Sharesave Scheme are as follows:
Date of grant
2025
2024
price (pence)
Exercise period
9 June 2021 (3 year)
90
141,665
1,400.00
01.08.24 – 31.01.25
14 June 2023 (3 year)
120,046
178,651
1,325.60
01.08.26 – 31.01.27
120,136
320,316
Performance Share Plan (“PSP”)
Under the terms of the Performance Share Plan, the Board may grant conditional
awards to executives. The exercise of awards is conditional on the achievement
of a performance target, which is determined by the Board at the time of
grant. The executive directors do not participate in this plan. PSP awards are
equity-settled.
Outstanding awards granted under the PSP are as follows:
Date of grant
2025
2024
price (pence)
Exercise period
23 October 2014
–
870
Nil
Oct 2017 – 23.10.24
20 October 2016
2,715
3,039
Nil
Oct 2019 – 20.10.26
19 November 2020
26,051
36,603
Nil
Nov 2021 – 19.11.30
19 November 2021
36,922
136,860
Nil
Nov 2024 – 19.11.31
21 November 2022
199,481
217,793
Nil
Nov 2025 – 21.11.32
16 November 2023
261,450
312,420
Nil
Nov 2026 – 16.11.33
21 November 2024
289,280
–
Nil
Nov 2027 – 21.11.34
815,899
707,585
Deferred Bonus Plan (“DBP”)
The Deferred Bonus Plan is applicable to executive directors only. Under the terms
of the DBP, any bonus payable over target is deferred into shares for a period of up
to three years. One third of the deferred shares are released on each anniversary of
the bonus.
At 31 August 2025, 123,513 (2024: 117,516) shares remain deferred in accordance with
this plan.
Cash-settled schemes
Under the terms of the LTIP and PSP, the Board may grant cash-settled awards
to executives. The exercise of options is conditional on the achievement of a
performance target, which is determined by the Board at the time of grant.
These awards will be settled in cash based on the share price at the date of
exercise. As at 31 August 2025 there were 37,778 outstanding nil-cost cash-settled
awards (2024: 42,233), which will be settled at various dates up to November 2031.
The carrying amount of liabilities arising from share-based payment transactions
is less than £1m (2024: less than £1m).
192 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
25. Share-based payments continued
Fair value information
2025
2024
1,209.89
1,299.63
7
8
Share options and awards granted
The aggregate of the estimated fair value of the options and awards granted in the
year is:
£m
2025
2024
19
20
The fair values of the LTIP and PSP awards granted were measured using a
Monte Carlo simulation model. The input range into the Monte Carlo models was
as follows:
2025
2024
Share price – pence
1,241.00
1,287.00
Exercise price – pence
Nil
Nil
Expected volatility – per cent
33
35–36
Expected life – years
3.0-5.0
3.0
Risk-free rate – per cent
4.14
4.15–4.19
Dividend yield – per cent
0%-2.71%
0%–2.25%
Weighted average fair value of options – pence
995.15
972.74
Expected volatility was determined by calculating the historical volatility of the
Group’s share price over the expected life of the option.
26. Related party transactions
Transactions between businesses within this Group which are related parties have
been eliminated on consolidation and are not disclosed in this Note.
Remuneration of key management personnel
The remuneration of the executive and non-executive directors, who are the key
management personnel of the Group, is set out below in aggregate for each of the
categories specified in IAS 24 Related Party Disclosures.
Further information about the remuneration of individual directors is provided
in the Directors’ remuneration report on pages 96 to 119.
£000
2025
2024
Short-term employee benefits
1,896
3,315
Post-employment benefits
26
33
Share-based payments
644
1,907
2,566
5,255
There are no other transactions with directors.
193 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
27. Other reserves
bond reserve
Total
Balance as at
1 September 2024
(283)
2
(27)
40
(268)
(2)
–
2
–
–
Disposal of
businesses
14
–
–
–
14
Balance at
31 August 2025
(271)
2
(25)
40
(254)
bond reserve
Total
Balance as at
1 September 2023
(282)
2
(15)
40
(255)
(1)
–
(12)
–
(13)
Balance at
31 August 2024
(283)
2
(27)
40
(268)
The Other reserves at 31 August 2025 include reserves created in relation to
historical capital reorganisation and proforma restatement of £(238)m (2024: £(238)
m), demerger from Smiths News PLC in 2006 of £69m (2024: £69m) and cumulative
amounts relating to employee share schemes of £(102)m (2024: £(114)m).
The convertible bond reserve is a reserve created to recognise the equity
component of the convertible bond issued in April 2021 (see Note 20) and
represents the value of the conversion rights at initial recognition of £41m, net
of transaction costs of £1m.
Capital redemption reserve
The Capital redemption reserve of £14m (2024: £13m) represents the par value of
shares repurchased and cancelled under the Group’s share buyback programme
and is reclassified from Share capital to the Capital redemption reserve.
28. Retirement benefit surplus
WH Smith PLC has operated a number of defined benefit and defined contribution
pension plans. The main pension arrangements for employees are operated
through one defined benefit scheme, the United News Shops Retirement Benefits
Scheme, and a defined contribution scheme, WH Smith Retirement Savings
Plan. The Group also previously operated the WHSmith Pension Trust defined
benefit scheme.
a) Defined benefit pension schemes
i) United News Shops Retirement Benefit Scheme
The United News Shops Retirement Benefits Scheme (“UNSRBS”) is closed to
new entrants and further service accrual. The scheme provides pension benefits
for pensioners and deferred members based on salary at the date of closure, with
increases based on inflation.
A full actuarial valuation of the scheme is carried out every three years with interim
reviews in the intervening years. The latest full actuarial valuation of the scheme
was carried out at 5 April 2024 by independent actuaries. Following this valuation,
the deficit was less than £1m.
The present value of obligations and fair value of assets are stated below.
£m
2025
2024
Present value of the obligations
(5)
(5)
Fair value of plan assets
6
5
1
–
ii) The WHSmith Pension Trust
The WHSmith Pension Trust Final Salary Section was a funded final salary defined
benefit scheme; it was closed to defined benefit service accrual on 2 April 2007 and
has been closed to new members since 1996.
Following the purchase of a bulk annuity during the year ended 31 August 2022 (the
buy in), the Trustee commenced the process to move to buy out and wind up of the
scheme. During the year ended 31 August 2024 the Trustee completed the activities
necessary to move to buy out, with administration transferred to Standard Life, and
commenced formal winding up of the Scheme.
194 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
28. Retirement benefit surplus continued
Accordingly, in June 2024, following the member consultation process and the
conclusion of the statutory notification process, the Trustee was advised that it
could legally distribute the remaining pension cash surplus to the sponsoring
employer, and therefore confirmed its intention to return surplus assets, after
associated costs, to the sponsor. As a result, the Group determined that it has
an unconditional right to the surplus asset, and the IAS 19 post-tax surplus of
£87m was recognised through other comprehensive income in the year ended
31 August 2024.
In September 2024, the Trustee transferred the surplus assets to the Group,
comprising cash of £75m and an investment in Permira Credit Solutions III Fund
of £12m (partly converted to cash in 2025) following finalisation of the buyout of
the defined benefit liabilities in the Retail Section of the WHSmith Pension Trust.
The transfer of assets was net of applicable taxes payable by the Trust of taxes owed
to HMRC, which were settled by the Trustee. As agreed with the Trustee, the return
of the surplus preceded the formal winding-up steps of the Retail Section.
b) Defined contribution pension scheme
The pension cost charged to income for the Group’s defined contribution schemes
amounted to £6m for the year ended 31 August 2025 (2024: £7m) of which £5m
(2024: £4m) related to continuing operations.
29. 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.
195 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
30. Subsidiary companies
The subsidiary companies included within the financial statements are disclosed below.
UK subsidiaries
address
1
companies %
Principal activity
WH Smith Group Limited
England & Wales
1
Ordinary
100
Holding company
The SQL Workshop Limited
England & Wales
1
Ordinary
100
Retailing
The Websters Group Limited
England & Wales
1
Ordinary
100
Dormant
WH Smith (Qatar) Limited
England & Wales
1
Ordinary
100
Dormant
WH Smith Online Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith HS Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith 1955 Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith Hospitals Holdings Limited
England & Wales
1
Ordinary & Preference
100
Holding Company
WH Smith Hospitals Limited
England & Wales
1
Ordinary
100
Retailing
WH Smith Retirement Savings Plan Limited
England & Wales
1
Ordinary
100
Dormant
WH Smith Travel 2008 Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith Travel Holdings Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith Travel Limited
England & Wales
1
Ordinary & Preference
100
Retailing
WH Smith US Group Holdings Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith US Retail Holdings Limited
England & Wales
1
Ordinary
100
Holding Company
1 Registered address details are set out on page 203
196 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
30. Subsidiary companies continued
The following UK subsidiaries will take advantage of the audit exemption set out within Section 479A of the Companies Act 2006 for the year ended 31 August 2025.
The Company will guarantee the debts and liabilities of the UK subsidiary undertakings below at the balance sheet date in accordance with Section 479C of the
Companies Act 2006. The Company has assessed the probability of loss under the guarantee as remote.
Name
Company number
WH Smith 1955 Limited
00549069
WH Smith Hospitals Holdings Limited
03806896
The SQL Workshop Limited
02676287
WH Smith Travel 2008 Limited
06560390
WH Smith US Group Holdings Limited
11615426
WH Smith US Retail Holdings Limited
11618458
International joint ventures
The below entities are joint ventures and per the Group’s accounting policies on page 144, the Group’s share of results of these joint ventures is included in the Group
consolidated income statement using the equity method of accounting.
address
1
companies %
Principal activity
WH Smith – DFA Brasil Cafeteria, Livraria E Conveniencia Eireli
Brazil
15
Ordinary
50
Retailing
WH Smith Malaysia SDN BHD
Malaysia
11
Ordinary
50
Retailing
WH Smith LLC
Oman
10
Ordinary
50
Retailing
MSP Innovations, LLC
USA
16
Ordinary
33
Retailing
Nash Nails MRG, LLC
USA
16
Ordinary
39
Retailing
1 Registered address details are set out on page 203
International subsidiaries
The below list of interests in overseas entities includes certain entities, particularly in the United States of America, in which WH Smith PLC holds less than 100 per cent
ownership. These entities primarily relate to airport operations in which the Group is required to engage with a local partner in order to operate the stores. Per the
accounting policy set out on page 144, the Group has determined that it has control of these entities and has therefore consolidated their results.
197 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
30. Subsidiary companies continued
address
1
companies %
Principal activity
WH Smith (Global Sourcing) Ltd
Hong Kong
2
Ordinary
100
Product sourcing for
WH Smith Australia Pty Limited
Australia
3
Ordinary
100
Retailing
WH Smith Germany GmbH
Germany
5
Ordinary
100
Retailing
WH Smith Hungary KFT
Hungary
21
Ordinary
100
Retailing
WH Smith Ireland Limited
Ireland
6
Ordinary
100
Retailing
WH Smith Italia S.R.L
Italy
7
Ordinary
100
Retailing
WH Smith LLC
Qatar
9
Ordinary
49
Retailing
WH Smith Nederland B.V.
Netherlands
12
Ordinary
100
Retailing
WH Smith Belgium (SRL)
Belgium
18
Ordinary
100
Retailing
WH Smith Norway AS
Norway
19
Ordinary
100
Retailing
WH Smith Singapore Pte. Limited
Singapore
13
Ordinary
100
Retailing
WH Smith Spain S.L.
Spain
14
Ordinary
100
Retailing
WH Smith Sweden AB
Sweden
20
Ordinary
100
Retailing
WHSmith North America Inc
USA
16
Ordinary
100
Holding Company
InMotion Entertainment Holdings LLC
USA
16
Ordinary
100
Holding Company
WH Smith USA Retail Inc
USA
16
Ordinary
100
Holding Company
InMotion SFO, LLC
USA
16
Ordinary
88
Retailing
Wild Retail Group Pty Limited
Australia
3
Ordinary
100
Retailing
InMotion Entertainment Group, LLC
USA
16
Ordinary
100
Retailing
InMotion AUS, LLC
USA
16
Ordinary
88
Retailing
InMotion BNA-C,LLC
USA
16
Ordinary
80
Retailing
InMotion BOS-BCE, LLC
USA
16
Ordinary
80
Retailing
InMotion BWI, LLC
USA
16
Ordinary
60
Retailing
InMotion CLE, LLC
USA
16
Ordinary
67
Retailing
InMotion – SB DC, LLC
USA
16
Ordinary
75
Retailing
1 Registered address details are set out on page 203
198 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
30. Subsidiary companies continued
address
1
companies %
Principal activity
InMotion DCA, LLC
USA
16
Ordinary
75
Retailing
InMotion DEN-B, LLC
USA
16
Ordinary
75
Retailing
DFW-A Retail Partners, LLC
USA
16
Ordinary
60
Retailing
DFW-E Retail Partners, LLC
USA
16
Ordinary
65
Retailing
DFW-D/E Retail Partners, LLC
USA
16
Ordinary
70
Retailing
Soundbalance DTW, LLC
USA
16
Ordinary
67
Retailing
InMotion DTW, LLC
USA
16
Ordinary
75
Retailing
InMotion EWR, LLC
USA
16
Ordinary
80
Retailing
InMotion EWR-B, LLC
USA
16
Ordinary
85
Retailing
InMotion FLL, LLC
USA
16
Ordinary
62
Retailing
InMotion FLL-T4, LLC
USA
16
Ordinary
62
Retailing
InMotion IAD, LLC
USA
16
Ordinary
75
Retailing
InMotion LAX, LLC
USA
16
Ordinary
75
Retailing
InMotion LAX-IT, LLC
USA
16
Ordinary
80
Retailing
Soundbalance IAH, LLC
USA
16
Ordinary
67
Retailing
Soundbalance MCO, LLC
USA
16
Ordinary
67
Retailing
InMotion MCO, LLC
USA
16
Ordinary
73
Retailing
Soundbalance Miami, LLC
USA
16
Ordinary
67
Retailing
InMotion Bright, LLC
USA
16
Ordinary
75
Retailing
InMotion MSY, LLC
USA
16
Ordinary
64
Retailing
InMotion ORD, LLC
USA
16
Ordinary
70
Retailing
InMotion ORD T2, LLC
USA
16
Ordinary
70
Retailing
Soundbalance PDX, LLC
USA
16
Ordinary
67
Retailing
Soundbalance PHL, LLC
USA
16
Ordinary
67
Retailing
InMotion Philadelphia, LLC
USA
16
Ordinary
70
Dormant
Soundbalance ATL-E, LLC
USA
16
Ordinary
67
Retailing
InMotion ATL, LLC
USA
16
Ordinary
80
Retailing
InMotion ATL-A, LLC
USA
16
Ordinary
64
Retailing
1 Registered address details are set out on page 203
199 WH Smith PLC Annual Report and Accounts 2025
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Notes to the financial statements continued
30. Subsidiary companies continued
address
1
companies %
Principal activity
InMotion PHX, LLC
USA
16
Ordinary
80
Retailing
InMotion PHX T3, LLC
USA
16
Ordinary
90
Retailing
Soundbalance SAN, LLC
USA
16
Ordinary
55
Retailing
InMotion SAT, LLC
USA
16
Ordinary
75
Retailing
InMotion SEA, LLC
USA
16
Ordinary
88
Retailing
InMotion SFO-T3, LLC
USA
16
Ordinary
85
Retailing
InMotion SFO-IT, LLC
USA
16
Ordinary
90
Retailing
InMotion SLC-A,LLC
USA
16
Ordinary
85
Retailing
InMotion SLC-B,LLC
USA
16
Ordinary
90
Retailing
InMotion SMF, LLC
USA
16
Ordinary
90
Retailing
Marshall Retail Group Holding Co Inc.
USA
16
Ordinary
100
Holding company
MRG Holdings Corp
USA
16
Ordinary
100
Holding company
Marshall Retail Group LLC
USA
16
Ordinary
100
Retailing
The Marshall Retail Group Canada Inc.
Canada
17
Ordinary
100
Retailing
MRG Baltimore Concourse A, LLC
USA
16
Ordinary
70
Retailing
MRG Baltimore (BWI), LLC
USA
16
Ordinary
70
Retailing
MRG Chicago, LLC
USA
16
Ordinary
65
Retailing
MRG Denver, LLC
USA
16
Ordinary
75
Retailing
MRG Dallas II, LLC
USA
16
Ordinary
65
Retailing
MRG Kansas City, LLC
USA
16
Ordinary
80
Retailing
MRG LaGuardia, LLC
USA
16
Ordinary
80
Retailing
MRG LaGuardia Terminal A, LLC
USA
16
Ordinary
75
Retailing
MRG Los Angeles, LLC
USA
16
Ordinary
70
Retailing
MRG Los Angeles T3
USA
16
Ordinary
70
Retailing
MRG Jacksonville, LLC
USA
16
Ordinary
70
Retailing
MRG Las Vegas, LLC
USA
16
Ordinary
90
Retailing
MRG Oakland, LLC
USA
16
Ordinary
80
Retailing
MRG Palm Springs, LLC
USA
16
Ordinary
75
Retailing
1 Registered address details are set out on page 203
200 WH Smith PLC Annual Report and Accounts 2025
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30. Subsidiary companies continued
address
1
companies %
Principal activity
MRG Portland, LLC
USA
16
Ordinary
75
Retailing
MRG Phoenix 1, LLC
USA
16
Ordinary
65
Retailing
MRG Phoenix II, LL
USA
16
Ordinary
65
Retailing
MRG Newark, LLC
USA
16
Ordinary
74
Retailing
MRG Newark II, LLC
USA
16
Ordinary
74
Retailing
MRG Nashville, LLC
USA
16
Ordinary
80
Retailing
MRG Orlando, LLC
USA
16
Ordinary
70
Retailing
MRG Raleigh Terminal 1, LLC
USA
16
Ordinary
55
Retailing
MRG RDU T2, LLC
USA
16
Ordinary
80
Retailing
MRG Sacramento, LLC
USA
16
Ordinary
90
Retailing
MRG Salt Lake City, LLC
USA
16
Ordinary
80
Retailing
MRG San Francisco, LLC
USA
16
Ordinary
80
Retailing
MRG San Francisco T1, LLC
USA
16
Ordinary
80
Retailing
MRG San Francisco T2, LLC
USA
16
Ordinary
85
Retailing
MRG San Francisco T3, LLC
USA
16
Ordinary
80
Retailing
MRG Savannah, LLC
USA
16
Ordinary
55
Retailing
MRG Seattle, LLC
USA
16
Ordinary
80
Retailing
MRG Washington (DCA) II, LLC
USA
16
Ordinary
75
Retailing
MRG Washington (DCA) III, LLC
USA
16
Ordinary
70
Retailing
MRG Washington (DCA) IV, LLC
USA
16
Ordinary
75
Retailing
Midway Fresh MRG, LLC
USA
16
Ordinary
20
Retailing
WH Smith DEN, LLC
USA
16
Ordinary
70
Retailing
Newsrail Resources Ltd
Ireland
6
Ordinary
100
Retailing
MRG Las Vegas II, LLC
USA
16
Ordinary
95
Retailing
MRG Portland II, LLC
USA
16
Ordinary
70
Retailing
MRG Sarasota, LLC
USA
16
Ordinary
80
Retailing
MRG San Diego, LLC
USA
16
Ordinary
75
Retailing
InMotion New York, LLC
USA
16
Ordinary
80
Retailing
InMotion Pittsburgh, LLC
USA
16
Ordinary
90
Retailing
1 Registered address details are set out on page 203
Notes to the financial statements continued
201 WH Smith PLC Annual Report and Accounts 2025
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30. Subsidiary companies continued
address
1
companies %
Principal activity
WH Smith Travel (Jersey) Ltd
Jersey
8
Ordinary
100
Retailing
WH Smith DCA, LLC
USA
16
Ordinary
75
Retailing
WH Smith Arabia LLC
Saudi Arabia
22
Ordinary
100
Retailing
WH Smith Denmark APS
Denmark
23
Ordinary
100
Retailing
WH Smith Travel SAS
France
4
Ordinary
100
Retailing
IMEG Denver, LLC
USA
16
Ordinary
72
Retailing
MRG Albuquerque LLC
USA
16
Ordinary
60
Retailing
MRG Atlantic City, LLC
USA
16
Ordinary
100
Retailing
MRG Burbank, LLC
USA
16
Ordinary
75
Retailing
MRG Dallas Fort Worth LLC
USA
16
Ordinary
65
Retailing
MRG Dallas Fort Worth II LLC
USA
16
Ordinary
60
Retailing
MRG Detroit, LLC
USA
16
Ordinary
70
Retailing
MRG Detroit II, LLC
USA
16
Ordinary
70
Retailing
MRG Denver V, LLC
USA
16
Ordinary
67
Retailing
MRG Denver IV, LLC
USA
16
Ordinary
75
Retailing
MRG Dulles, LLC
USA
16
Ordinary
65
Retailing
MRG Las Vegas IV, LLC
USA
16
Ordinary
49
Retailing
MRG Las Vegas V, LLC
USA
16
Ordinary
85
Retailing
MRG Las Vegas VII, LLC
USA
16
Ordinary
100
Retailing
MRG Nashville III, LLC
USA
16
Ordinary
80
Retailing
MRG New York T1, LLC
USA
16
Ordinary
65
Retailing
MRG Orlando II, LLC
USA
16
Ordinary
70
Retailing
MRG Philadelphia II, LLC
USA
16
Ordinary
65
Retailing
MRG RDU T1, LLC
USA
16
Ordinary
75
Retailing
MRG Las Vegas III, LLC
USA
16
Ordinary
90
Retailing
MRG Baltimore II, LLC
USA
16
Ordinary
70
Retailing
MRG Salt Lake, LLC
USA
16
Ordinary
80
Retailing
Natalie’s MRG, LLC
USA
16
Ordinary
49
Retailing
1 Registered address details are set out on page 203
Notes to the financial statements continued
202 WH Smith PLC Annual Report and Accounts 2025
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Registered addresses
1 Greenbridge Road, Swindon, Wiltshire SN3 3RX
2 Suites 13A01–04, 13 Floor, South Tower, World Finance Centre, Harbour City, Tsim Sha Tsui, Kowloon, Hong Kong
3 Suite 401, 80 William Street, Woolloomooloo NSW 2011, Australia
4 38 Rue des Mathurins, 75008 Paris 8, France
5 Terminal Ring 1, Zentralgebaude Ost, Zi. 5. 035, 40474 Dusseldorf, Germany
6 6th Floor, Grand Canal Square, Dublin 2, Ireland
7 Via Porlezza 12, Cap 20123, Milano, Italy
8 3rd Floor, 44 Esplanade, St. Helier, JE4 9WG, Jersey
9 27 Um Ghwalinah Road, 230 C-ring Road, Doha, Qatar
10 PO Box 3275, PC112, Ruwi, Oman
11 Lot No. 3, Jalan Teknologi 3/1, Seksyen 3, PJU 5, Kota Damansara, 47810 Petaling Jaya, Selangor, Malaysia
12 Weteringschans 94, 1017 XS, Amsterdam, the Netherlands
13 11 Keng Cheow Street #3–10, The Riverside Piazza, Singapore 059608
14 Calle Serrano, 55, 1ª floor, 28006 Madrid, Spain
15 Avenida das Americas, No. 3434, Barra da Tijuca, CEP 22640–102, Rio de Janeiro, RJ, Brazil
16 6600 Bermuda Road, Las Vegas, Nevada, NV 89119, USA
17 2200 HSBC Building, 885 West Georgia Street, Vancouver, BC V6C 3E8, Canada
18 Posthofbrug 10 boîte 4, 2600 Anvers, Belgium
19 Bryggegata 6, 0250 Oslo, Norway
20 Norrlandsgatan 16, 111 43 Stockholm, Sweden
21 1139 Budapest, Vaci ut 99–105, Hungary
22 7534 King Abdul Aziz, 4672 al ghadeer dist., Riyadh, 13311, Saudi Arabia
23 c/o Bird & Bird Advokatpartnerselskab, Kalkbraenderilobskaj 8, 2100 Copenhagen, Denmark
Notes to the financial statements continued
203 WH Smith PLC Annual Report and Accounts 2025
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Company balance sheet
As at 31 August 2025
£m Note 2025 2024
Non-current assets
Investments 3 835 835
835 835
Current assets
Cash and cash equivalents 1 –
Receivables: amounts falling due within oneyear 4 5 44
6 44
Current liabilities
Payables: amounts falling due within one year 5 (86) (130)
Borrowings 6 (320) –
(406) (130)
Net current liabilities (400) (86)
Non-current liabilities
Borrowings 6 – (310)
– (310)
Total net assets 435 439
Total shareholders’ equity
Called up share capital 9 28 29
Share premium account 316 316
Other reserves 10 40 40
Capital redemption reserve 10 14 13
Profit and loss account
1
37 41
Total equity 435 439
1 The profit for the year attributable to shareholders was £89m (2024: loss of £11m). See Note 2
The financial statements of WH Smith PLC, registered number 5202036, on pages 204 to 208 were approved by the Board of Directors and authorised for issue on
19December 2025 and were signed on its behalf by:
Andrew Harrison Max Izzard
Interim Group Chief Executive Chief Financial Officer
204 WH Smith PLC Annual Report and Accounts 2025
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Company statement of changes in equity
For the year ended 31 August 2025
£m
Share
capital
Share
premium
Capital
redemption
reserve
Other
reserves
Profit
and loss
account Total
Balance at 1 September 2024 29 316 13 40 41 439
Profit for the financial year – – – – 89 89
Total comprehensive income for the year – – – – 89 89
Equity dividends paid during the year – – – – (43) (43)
Share buy back (1) – 1 – (50) (50)
Balance at 31 August 2025 28 316 14 40 37 435
Balance at 1 September 2023 29 316 13 40 93 491
Loss for the financial year – – – – (11) (11)
Total comprehensive loss for the year – – – – (11) (11)
Equity dividends paid during the year – – – – (41) (41)
Balance at 31 August 2024 29 316 13 40 41 439
205 WH Smith PLC Annual Report and Accounts 2025
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Notes to the Company financial statements
1. Accounting policies
a) Basis of preparation
The Company’s financial statements have been prepared on a going concern
basis,as detailed in Note 1 of the Notes tothe consolidated financial statements
onpage 144.
The financial statements are prepared in accordance with the Companies Act 2006
as applicable to companies using FRS 101. The Company meets the definition of a
qualifying entity under FRS 100 (Application of Financial Reporting Requirements)
issued by the Financial Reporting Council. Accordingly, the financial statements
have been prepared inaccordance with FRS 101 Reduced Disclosure Framework
asissued by the Financial Reporting Council.
As permitted by FRS 101, the Company has taken advantage of the disclosure
exemption available under the standard in relation to share-based payments,
financial instruments, capital management, presentation of comparative
information in respect of certain assets, presentation of a cash flow statement,
standards not yet effective, impairment of assets and related party transactions.
Where required, equivalent disclosures are given in the consolidated financial
statements of the Group.
The financial statements are prepared under the historical cost convention.
The material accounting policies adopted, which have been applied consistently
throughout both years, are the same as those set out in Note 1 to the consolidated
financial statements except as noted below. No new accounting standards, or
amendments to accounting standards, or IFRIC interpretations that are effective
forthe year ended 31 August 2025, have had a material impact on the Company.
In the application of the Company’s accounting policies, the Directors do not
consider that there are any further critical accounting judgements or sources
of estimation uncertainty that could lead to a material change in the carrying
amounts of assets and liabilities.
b) Investments in subsidiary undertakings
Investments in subsidiaries are valued at historical cost less provision for
impairment in value. Investments in subsidiaries are reviewed annually for
indicators of impairment. An impairment loss is recognised for the amount by
which the carrying value exceeds its recoverable amount. The recoverable amount
is the higher of an asset’s net realisable value and value-in-use.
c) Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts
expected to be paid (or recovered) using the tax rates and laws that have been
enacted or substantively enacted at the balance sheet date.
d) Receivables
Receivables represent amounts due from other Group companies. Receivables are
initially measured at fair value and subsequently measured at amortised cost using
the effective interest rate method, less provision for impairment. A provision for
the expected credit loss on receivables is established at inception. This is modified
when there is a change in the credit risk and hence evidence that the Company will
not be able to collect all amounts due according to the original terms of receivables.
2. Profit for the year
The Company has not presented its own profit and loss account as permitted
bySection 408 of the Companies Act 2006.
The profit for the year attributable to shareholders, which is stated on a historical
cost basis, was £89m (2024: loss of £11m) comprising dividend income of £100m
(2024: £nil) and a tax credit of £4m (2024: £4m), offset by finance costs of £15m
(2024: £15m). There were no other recognised gains or losses.
The Company did not have any employees during the year ended 31 August
2025 (2024: nil). All directors were remunerated by other Group companies.
Disclosure ofaudit fees payable in respect of the Company is included in Note 3
tothe Group’s consolidated financial statements.
206 WH Smith PLC Annual Report and Accounts 2025
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Notes to the Company financial statements continued
3. Investments
A full list of the Company’s subsidiary undertakings is included in Note 30 of the
Notes to the consolidated financial statements. The registered office of WH Smith
Group Limited is Greenbridge Road, Swindon, Wiltshire SN3 3RX.
The investment in subsidiaries balance has been reviewed for indicators of
impairment at the balance sheet date. The Company considers the relationship
between its market capitalisation, adjusted for any assets or liabilities on the
Company’s balance sheet, and the carrying value of its investments, among other
factors including an assessment of future forecasts, when reviewing for indicators
of impairment. There was substantial headroom between the market capitalisation,
adjusted for the Company’s net liabilities, and the carrying value of investments.
Given the analysis performed, the risk of impairment to the investment carrying
amount is considered remote. Consequently, no impairment has been recognised
in respect of the investment.
4. Receivables: amounts falling due within one year
£m 2025 2024
Amounts owed by subsidiary undertakings – 40
Prepayments 1 –
Current tax receivable 4 4
5 44
Amounts receivable from subsidiary undertakings are non-interest bearing and
repayable on demand.
5. Payables: amounts falling due within one year
£m 2025 2024
Amounts owed to subsidiary undertakings 85 129
Accruals and deferred income 1 1
86 130
Amounts owed to subsidiary undertakings are unsecured, non-interest bearing
andrepayable on demand.
6. Borrowings
£m 2025 2024
Convertible bonds 320 310
320 310
Refer to further details in Note 20 of the consolidated financial statements.
7. Dividends
Amounts paid and recognised as distributions to shareholders in the year are
as follows:
£m 2025 2024
Final dividend for the year ended 31 August 2024
of22.6pper ordinary share
29 –
Interim dividend for the year ended 31 August 2025
of11.3pper ordinary share
14 –
Final dividend for the year ended 31 August 2023
of20.8pper ordinary share
– 27
Interim dividend for the year ended 31 August 2024
of11.0pper ordinary share
– 14
43 41
The Board has proposed a final dividend of 6.0p per share, amounting to a final
dividend of c.£8m which is not included as a liability in these financial statements
and, subject to shareholder approval, will be paid on 12 February 2026 to
shareholders registered at the close of business on 23 January 2026.
207 WH Smith PLC Annual Report and Accounts 2025
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Notes to the Company financial statements continued
8. Contingent liabilities
Contingent liabilities of £1m (2024: £1m) are in relation to insurance letters of credit.
The Company will guarantee the debts and liabilities of the below UK subsidiary
undertakings at the balance sheet date in accordance with Section 479C of the
Companies Act 2006. The Company has assessed the probability of loss under the
guarantee as remote.
Name Company number
Held indirectly:
WH Smith 1955 Limited 00549069
WH Smith Hospitals Holdings Limited 03806896
The SQL Workshop Limited 02676287
WH Smith Travel 2008 Limited 06560390
WH Smith US Group Holdings Limited 11615426
WH Smith US Retail Holdings Limited 11618458
9. Called up share capital
Allotted and fully paid
Ordinary shares of 22
6
⁄
67
p
Number
of shares
(millions)
Nominal
value
£m
At 1 September 2024 131 29
Purchase of own shares for cancellation (5) (1)
At 31 August 2025 126 28
At 1 September 2023 and at 31 August 2024 131 29
During the year there were 4,481 ordinary shares allotted under the terms of the
Company’s Sharesave Scheme (2024: nil ordinary shares). There was no effect from
the prior year allotment of ordinary shares on share premium.
The holders of ordinary shares are entitled to receive dividends as declared from
time to time and are entitled to one vote per share at the meetings of the Company.
10. Other reserves and capital redemption reserve
Other reserves are reserves created to recognise the equity component of the
convertible bond issued in April 2021 (seeNote 6) and represents the value of the
conversion rights at initial recognition of £41m, net of transaction costs of£1m.
The Capital redemption reserve of £14m (2024: £13m) represents the par value
of shares repurchased and cancelled under the Company’s share buyback
programme and is reclassified from share capital to the capital redemption reserve.
208 WH Smith PLC Annual Report and Accounts 2025
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Glossary (unaudited)
Alternative performance measures
In reporting financial information, the Group presents alternative performance
measures, “APMs”, which are not defined or specified under the requirements
of IFRS.
The Group believes that these APMs, which are not considered to be a
substitute for or superior to IFRS measures, providestakeholders with additional
useful information on the underlying trends, performance and position of
the Group andare consistent with how business performance is measured
internally. The alternative performance measures are not defined by IFRS and
therefore may not be directly comparable with other companies’ alternative
performance measures.
Alternative performance measures reflect continuing operations unless
otherwise stated.
Non-underlying items
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. The Group believes that the separate disclosure of these
items provides additional useful information to users of the financial statements
toenable a better understanding of the Group’s underlying financial performance.
Non-underlying items can include, but are not limited to, restructuring and
transformation costs linked to Board-agreed programmes, costs relating to M&A
activity, impairment charges and other property costs, significant items relating
to pension schemes, amortisation of intangible assets acquired in business
combinations, and the related tax effect of these items. Reversals associated with
items previously reported as non-underlying, suchasreversals of impairments and
releases of provisions or liabilities, are also reported in non-underlying items.
Items recognised in Other comprehensive income/loss may also be identified
as non-underlying for the purposes of narrative explanation of the Group’s
performance, where the Group has determined that they are associated
with the above categories and are judged to have met the Group’s definition
ofnon-underlying.
IFRS 16
The Group adopted IFRS 16 in the year ended 31 August 2020. IFRS 16 superseded
the lease guidance under IAS 17 and the related interpretations. IFRS 16 sets out the
principles for the recognition, measurement, presentation and disclosure of leases
and requires lessees to account for all leases under a single on-balance sheet model
as the distinction between operating and finance leases is removed. The only
exceptions are short-term and low-value leases. At the commencement date of
alease, alessee will recognise a lease liability for the future lease payments and an
asset (right-of-use asset) representing the right to use the underlying asset during
the lease term. Lessees are required to separately recognise theinterest expense
onthe lease liability and the depreciation expense on the right-of-use asset.
Management has chosen to exclude the effects of IFRS 16 for the purposes
of narrative commentary on the Group’s performance and financial position
in the Strategic report. The effect of IFRS 16 on the Group income statement
is to front-load total lease expenses, being higher at the beginning of a lease
contract, and lower towards the end of a contract, and this is further influenced
by timing of renewals and contract wins, and lengths of contracts. As a result
ofthese complexities, IFRS16 measures of profit and EBITDA (used as a proxy for
cash generation) do not provide meaningful KPIs or measures for the purposes
of assessing performance, concession quality or for trend analysis, therefore
management continue to use pre-IFRS 16 measures internally.
The impact of the application of IFRS 16 on the Income statement and Segmental
information is provided in Notes A1 and A2 below. There is no impact oncash
flows, although the classification of cash flows has changed, with an increase in
net cash flows from operating activities being offset by a decrease in net cash
flows from financing activities, as set out in Note A9 below. The balance sheet as
at 31 August 2025, both including and excluding the impact of IFRS 16, is shown
inNoteA10 below.
Leases policies applicable prior to 1 September 2019
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other leases
areclassified as operating leases.
209 WH Smith PLC Annual Report and Accounts 2025
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Assets held under finance leases are recognised as assets of the Group at their fair
value determined at the inception of the lease or, if lower, at the present value of
the minimum lease payments. The corresponding liability to the lessor is included
in the balance sheet as a finance lease obligation. These assets are depreciated over
their expected useful lives on the same basis as owned assets or, where shorter,
over the term of the relevant lease. Lease payments are apportioned between
finance charges and a reduction of the lease obligations so as to achieve a constant
rate of interest on the remaining balance of the liability. Finance charges are
recognised directly in the income statement.
Rentals payable and receivable under operating leases are charged to the
income statement on a straight-line basis over the term of the relevant lease.
Benefits received and receivable as an incentive to enter into an operating lease
are also spread on a straight-line basis over the lease term. The Group has a
number of lease arrangements in which the rent payable is contingent on revenue.
Contingent rentals payable, based on store revenues, are accrued in line with
revenues generated.
Definitions and reconciliations
In line with the Guidelines on Alternative Performance Measures issued by the
European Securities and Markets Authority (“ESMA”), we have provided additional
information on the APMs used by the Group below, including full reconciliations
back to the closest equivalent statutory measure.
APM
Closest equivalent
IFRSmeasure
Reconciling items
to IFRS measure Definition and purpose
Income statement measures
Headline measures Various See Notes A1–A10 and Note
A12–A14
Headline measures exclude the impact of IFRS 16 (applying the principles of IAS 17).
Reconciliations of all Headline measures are provided in Notes A1 to A10 and
Note A12 to A14.
Group profit before tax and
non-underlying items
Group profit
before tax
See Group income statement
and Note A1
Group profit before tax and non-underlying items excludes the impact of non-
underlying items as described below. A reconciliation from Group profit before
tax and non-underlying items to Group profit before tax is provided on the Group
income statement on page 138, and on a Headline (pre-IFRS 16) basis in Note A1.
Group profit from trading
operations and segment
tradingprofit
Group
operating
profit
See Note 2 andNote A2 Group profit from trading operations and segment trading profit are stated after
directly attributable share-based payment and pension service charges and before
non-underlying items, unallocated costs, finance costs and income tax expense.
A reconciliation from the above measures to Group operating profit and Group profit
before tax on an IFRS 16 basis is provided in Note 2 to the financial statements and
on a Headline (pre-IFRS 16) basis in Note A2.
Non-underlying
items
None Refer to definition and see
Note 4 andNote A6
Excludes 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. The Group believes that the separate disclosure of these items provides
additional useful information to users of the financial statements to enable a better
understanding of the Group’s underlying financial performance. An explanation of
the nature of the items identified as non-underlying on an IFRS 16 basis is provided
inNote 4 to the financial statements, and on a Headline (pre-IFRS 16) basis in Note A6.
Glossary (unaudited) continued
210 WH Smith PLC Annual Report and Accounts 2025
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APM
Closest equivalent
IFRSmeasure
Reconciling items
to IFRS measure Definition and purpose
Income statement measures continued
Earnings per share before
non-underlying items
Earnings
per share
Non-underlying items,
seeNote 10 and Note A4
Profit for the year attributable to the equity holders of the parent before
non-underlying items divided by the weighted average number of ordinary shares
in issue during the financial year. A reconciliation is provided on an IFRS 16 basis
inNote 10 and on a Headline (pre-IFRS 16) basis in Note A4.
Headline EBITDA Group operating
profit
Refer to definition Headline EBITDA is Headline Group operating profit before non-underlying items
adjusted for pre-IFRS 16 depreciation, amortisation and impairment and before
non-cash items. See Note A13.
Effective tax rate None Non-underlying items Total income tax charge excluding the tax impact of non-underlying items divided
by Group Headline profit before tax and non-underlying items. See Note 7 on an IFRS
16 basis, and Notes A3 and A6 on a Headline pre-IFRS 16 basis.
Fixed charges cover None Refer to definition This performance measure calculates the number of times Headline EBITDA before
fixed charges covers the total fixed charges included in calculating profit or loss.
Fixed charges included in this measure are net finance charges (excluding finance
charges from IFRS 16 leases) and fixed operating lease rentals stated on a pre-IFRS
16 basis.
The calculation of this measure is outlined in Note A5.
Gross margin Gross profit
margin
Not applicable Where referred to throughout the Annual report, gross margin is calculated as gross
profit divided by revenue.
Like-for-like
revenue
Movement in
revenue per
the income
statement
– Revenue change from
non-like-for-like stores
– Foreign exchange impact
Like-for-like revenue is the change in revenue from stores that have been open
for at least a year, with a similar selling space at a constant foreign exchange rate.
See Note A11.
Glossary (unaudited) continued
211 WH Smith PLC Annual Report and Accounts 2025
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APM
Closest equivalent
IFRSmeasure
Reconciling items
to IFRS measure Definition and purpose
Balance sheet measures
Headline net debt Net debt Reconciliation of net debt Headline net debt is defined as cash and cash equivalents, lessbank overdrafts and
other borrowings and both current and non-current obligations under finance leases
as defined on a pre-IFRS 16 basis. Lease liabilities recognised as a result of IFRS 16
are excluded from this measure. A reconciliation to net debt on an IFRS 16 basis is
provided in Note A8.
Other measures
Free cash flow Net cash
inflow from
operating
activities
See Note A7 and Strategic
report page 30
Free cash flow is defined as the net cash inflow from operating activities before the
cash flow effect of IFRS 16, non-underlying items and pension funding, less net capital
expenditure. The components of free cash flow are shown in Note A7 and onpage30,
as part of the Strategic report.
Return on capital
employed(“ROCE”)
None Not applicable Return on capital employed is calculated as the Headline Group operating profit
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 obligations and net current and deferred tax
balances. See the Strategic report on page 32.
Leverage None Not applicable Leverage is calculated as Headline net debt divided by rolling 12-month Headline
EBITDA (on a pre-IFRS 16 basis). See Note A14.
Glossary (unaudited) continued
212 WH Smith PLC Annual Report and Accounts 2025
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A1. Reconciliation of Headline to Statutory Group operating profit and Group profit before tax
2025
Pre-IFRS 16 basis IFRS 16 basis
£m
Headline, before
non-underlying
items(pre-IFRS 16)
Headline
non-underlying
items(pre-IFRS 16)
Headline
(pre-IFRS 16)
IFRS 16
adjustments
IFRS 16 adjustments
non-underlying
items Total
Revenue 1,553 – 1,553 – – 1,553
Cost of sales (664) – (664) – – (664)
Gross profit - continuing operations 889 – 889 – – 889
Distribution costs (625) – (625) 14 – (611)
Administrative expenses (136) – (136) 1 – (135)
Other income 6 – 6 (1) – 5
Non-underlying items – (91) (91) – (8) (99)
Group operating profit/(loss) - continuing operations 134 (91) 43 14 (8) 49
Finance costs (26) (1) (27) (20) – (47)
Profit/(loss) before tax - continuing operations 108 (92) 16 (6) (8) 2
Income tax (charge)/credit (45) 18 (27) 1 – (26)
Profit/(loss) for the year – continuing operations 63 (74) (11) (5) (8) (24)
Profit/(loss) for the year – discontinued operations 11 (146) (135) 13 9 (113)
Profit/(loss) for the year – total operations 74 (220) (146) 8 1 (137)
Attributable to:
Equity holders of the parent 67 (220) (153) 8 1 (144)
Non-controlling interests 7 – 7 – – 7
74 (220) (146) 8 1 (137)
Glossary (unaudited) continued
213 WH Smith PLC Annual Report and Accounts 2025
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A1. Reconciliation of Headline to Statutory Group operating profit and Group profit before tax continued
2024 (restated
1
)
Pre-IFRS 16 basis IFRS 16 basis
£m
Headline, before
non-underlying
items(pre-IFRS 16)
Headline
non-underlying
items(pre-IFRS 16)
Headline
(pre-IFRS 16)
IFRS 16
adjustments
IFRS 16 adjustments
non-underlying
items Total
Revenue 1,473 – 1,473 – – 1,473
Cost of sales (621) – (621) – – (621)
Gross profit - continuing operations 852 – 852 – – 852
Distribution costs (581) – (581) 9 – (572)
Administrative expenses (137) – (137) 2 – (135)
Other income 8 – 8 1 – 9
Non-underlying items – (41) (41) – – (41)
Group operating profit/(loss) - continuing operations 142 (41) 101 12 – 113
Finance costs (28) – (28) (20) – (48)
Profit/(loss) before tax - continuing operations 114 (41) 73 (8) – 65
Income tax (charge)/credit (29) 5 (24) 2 – (22)
Profit/(loss) for the year – continuing operations 85 (36) 49 (6) – 43
Profit/(loss) for the year – discontinued operations 25 (12) 13 2 2 17
Profit/(loss) for the year – total operations 110 (48) 62 (4) 2 60
Attributable to:
Equity holders of the parent 104 (48) 56 (4) 2 54
Non-controlling interests 6 – 6 – – 6
110 (48) 62 (4) 2 60
1 Comparative periods have been restated a) to correct the accelerated supplier income recognition and inventory-related items in the North America division (refer to Note 1b for further
details), totalling a £20m reduction to previously reported cost of sales; b) to reclassify certain income amounting to £5m from cost of sales to other income for consistency with the current
period; c) to reclassify certain costs amounting to £43m from distribution costs to cost of sales for consistency with the current period; and d) to separately disclose results from discontinued
operations (refer to Note 8 for further details)
Glossary (unaudited) continued
214 WH Smith PLC Annual Report and Accounts 2025
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A2. Reconciliation of Headline to Statutory segmental trading profit and Group profit from trading operations
2025
Pre-IFRS 16 basis IFRS 16 basis
£m
Headline, before
non-underlying
items(pre-IFRS 16)
Headline
non-underlying
items(pre-IFRS 16)
Headline
(pre-IFRS 16)
IFRS 16
adjustments Total
Trading profit
UK 130 – 130 1 131
North America 15 – 15 7 22
Rest of the World and Other 14 – 14 6 20
Group profit from trading operations – continuing operations 159 – 159 14 173
Unallocated central costs (25) – (25) – (25)
Group operating profit before non-underlying items – continuing operations 134 – 134 14 148
Non-underlying items – (91) (91) (8) (99)
Group operating profit/(loss) – continuing operations 134 (91) 43 6 49
2024 (restated
1
)
Pre-IFRS 16 basis IFRS 16 basis
£m
Headline, before
non-underlying
items(pre-IFRS 16)
Headline
non-underlying
items(pre-IFRS 16)
Headline
(pre-IFRS 16)
IFRS 16
adjustments Total
Trading profit
UK 122 – 122 4 126
North America 34 – 34 4 38
Rest of the World and Other 14 – 14 4 18
Group profit from trading operations – continuing operations 170 – 170 12 182
Unallocated central costs (28) – (28) – (28)
Group operating profit before non-underlying items – continuing operations 142 – 142 12 154
Non-underlying items – (41) (41) – (41)
Group operating profit/(loss) – continuing operations 142 (41) 101 12 113
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 8 for further details)
Glossary (unaudited) continued
215 WH Smith PLC Annual Report and Accounts 2025
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A3. Reconciliation of Headline to Statutory tax expense
2025 2024 (restated
1
)
£m
Headline
(pre-IFRS 16)
IFRS 16
adjustments IFRS 16
Headline
(pre-IFRS 16)
IFRS 16
adjustments IFRS 16
Profit before tax and non-underlying items 108 (6) 102 114 (8) 106
Tax on profit – Standard rate of UK corporation tax (25%;2024:25%) 24 (1) 23 33 (2) 31
Adjustment in respect of prior years (6) – (6) (1) – (1)
Total current tax charge/(credit) 18 (1) 17 32 (2) 30
Deferred tax – current year 27 – 27 – – –
Deferred tax – prior year 2 – 2 (5) – (5)
Deferred tax – adjustment in respect of change intaxrates (2) – (2) 2 – 2
Tax charge/(credit) on profit before non-underlying items 45 (1) 44 29 (2) 27
Tax on non-underlying items – current tax (10) – (10) – – –
Tax on non-underlying items – deferred tax (8) – (8) (5) – (5)
Total tax charge/(credit) on profit – continuing operations 27 (1) 26 24 (2) 22
Total tax (credit)/charge on profit – discontinued operations (3) – (3) 4 – 4
Total tax charge/(credit) on profit – total operations 24 (1) 23 28 (2) 26
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 8 for further details)
A4. Calculation of Headline and Statutory earnings per share
2025 2024
Millions Basic EPS Diluted EPS Basic EPS Diluted EPS
Weighted average shares in issue (Note 10) 127 129 129 131
Glossary (unaudited) continued
216 WH Smith PLC Annual Report and Accounts 2025
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A4. Calculation of Headline and Statutory earnings per share continued
2025 2024 (restated
1
)
Profit for the year
attributable to
equity holders of
the parent Basic EPS Diluted EPS
Profit for the year
attributable to
equity holders of
the parent Basic EPS Diluted EPS
£m pence pence £m pence pence
Headline (pre-IFRS 16 basis):
– Before non-underlying items 56 44.1 43.4 79 61.2 60.3
– Non-underlying items (74) (58.3) (57.4) (36) (27.9) (27.5)
– Impact of anti-dilutive shares – (0.2) – –
Continuing operations (18) (14.2) (14.2) 43 33.3 32.8
Discontinued operations (135) (106.3) (106.3) 13 10.1 9.9
Total operations (153) (120.5) (120.5) 56 43.4 42.7
IFRS 16 adjustments:
– Before non-underlying items (5) (3.9) (3.9) (6) (4.6) (4.6)
– Non-underlying items (8) (6.3) (6.2) – – –
– Impact of anti-dilutive shares – (0.1) – –
Continuing operations (13) (10.2) (10.2) (6) (4.6) (4.6)
Discontinued operations 22 17.3 17.3 4 3.1 3.1
Total operations 9 7.1 7.1 (2) (1.5) (1.5)
IFRS 16 basis:
– Before non-underlying items 51 40.2 39.5 73 56.6 55.7
– Non-underlying items (82) (64.6) (63.6) (36) (27.9) (27.5)
– Impact of anti-dilutive shares – (0.3) – –
Continuing operations (31) (24.4) (24.4) 37 28.7 28.2
Discontinued operations (113) (89.0) (89.0) 17 13.2 13.0
Total operations (144) (113.4) (113.4) 54 41.9 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 8 for further details)
Glossary (unaudited) continued
217 WH Smith PLC Annual Report and Accounts 2025
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A5. Fixed charges cover
£m 2025
2024
(restated
1
)
Headline net finance costs before non-underlying items 26 28
Headline fixed operating lease charges (pre-IFRS 16) (Note A12) 232 216
Total fixed charges – continuing operations 258 244
Headline EBITDA (Note A13) 187 198
Headline fixed operating lease charges (pre-IFRS 16) (Note A12) 232 216
Headline EBITDA before fixed charges before non-underlying items (pre-IFRS 16)
1
- continuing operations 419 414
Fixed charges cover – times – continuing operations 1.6x 1.7x
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 8 for further details)
Glossary (unaudited) continued
218 WH Smith PLC Annual Report and Accounts 2025
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A6. Non-underlying items on pre-IFRS 16 and IFRS 16 bases
2025 2024 (restated
1
)
£m
Headline
(pre-IFRS 16) IFRS 16
Headline
(pre-IFRS 16) IFRS 16
Amortisation of acquired intangible assets 3 3 3 3
Impairment of non-current assets:
– property, plant and equipment 24 24 13 11
– intangible assets – – 1 1
– right-of-use assets – 29 – 10
Provisions for onerous contracts 24 3 9 4
Transformation programmes – IT 11 11 4 4
Transformation programmes – supply chain 3 3 3 3
Transformation programmes – operational efficiencies 11 11 – –
Costs relating to the investigation into accelerated recognition of supplier income in North America 10 10 – –
Impairment of other receivables 3 3 – –
Costs relating to M&A activity and Group legal entity structure 1 1 4 4
Costs associated with pensions – – 2 2
IFRS 16 remeasurement gains – – – (3)
Other non-underlying costs 1 1 2 2
Non-underlying items, included in operating profit – continuing operations 91 99 41 41
Finance costs associated with onerous contracts 1 1 – –
Non-underlying items, before tax – continuing operations 92 100 41 41
Tax credit on non-underlying items (18) (18) (5) (5)
Non-underlying items, after tax – continuing operations 74 82 36 36
Glossary (unaudited) continued
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 8 for further details)
Non-underlying items on a pre-IFRS 16 basis are calculated on a consistent basis
with IFRS 16, with the exception of the below items.
Impairment of right-of-use assets
On a pre-IFRS 16 basis, right-of-use assets are not recognised; therefore, the right-of-
use asset impairment of £29m is also not recognised.
Provisions for onerous contracts
A charge of £24m has been recognised on a pre-IFRS 16 basis to provide for the
unavoidable costs of continuing to service certain 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. On an IFRS 16 basis, this charge
is £3m, as the charge is offset by impairments to right-of-use assets that are not
recognised on a pre-IFRS 16 basis.
A tax credit of £18m has been recognised in relation to the above items
(£18m pre-IFRS 16).
219 WH Smith PLC Annual Report and Accounts 2025
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A7. Free cash flow
£m 2025
2024
(restated
1
)
Net cash inflow from operating activities - continuing operations 267 195
Cash flow impact of IFRS 16 (86) (72)
Add back:
– Cash impact of non-underlying items 38 17
– Other non-cash items – 1
Deduct:
– Purchase of property, plant and equipment (incl. £2m non-
underlying capital expenditure (2024: £2m)) (77) (97)
– Purchase of intangible assets
(4) (9)
– Pension funding (75) –
Free cash flow – continuing operations 63 35
Free cash flow – discontinued operations (25) 18
Free cash flow – total operations 38 53
1 Comparative periods have been restated to separately disclose results from discontinued
operations (refer to Note 8 for further details)
A8. Headline net debt
The table below shows Headline net debt (pre-IFRS 16). This excludes lease liabilities
recognised on application of IFRS 16.
£m 2025 2024
Borrowings:
– Revolving credit facility (141) (117)
– Convertible bonds (320) (310)
– Lease liabilities (Note 17) (484) (626)
Liabilities from financing activities (945) (1,053)
Cash and cash equivalents 71 56
Net debt (IFRS 16) (Note 20) (874) (997)
Add back lease liabilities recognised under IFRS 16 484 626
Headline net debt (pre-IFRS 16) (390) (371)
A9. Cash flow disclosure impact of IFRS 16
There is no impact of IFRS 16 on cash flows, although the classification of cash flows has changed, with an increase in net cash flows from operating activities being offset
by a decrease in net cash flows from financing activities.
2025 2024 (restated
1
)
£m
Headline
(pre-IFRS 16)
IFRS 16
adjustment
2
IFRS 16
Headline
(pre-IFRS 16)
IFRS 16
adjustment IFRS 16
Net cash inflows from operating activities 160 116 276 155 111 266
Net cash outflows from investing activities (69) – (69) (128) – (128)
Net cash outflows from financing activities (76) (116) (192) (27) (111) (138)
Net increase in cash in the period - total operations 15 – 15 – – –
1 Comparative periods have been restated to reclassify the receipt from settlement of financial instruments from Operating activities to Investing activities
2 Comprises £86m related to continuing operations and £30m related to discontinued operations
Glossary (unaudited) continued
220 WH Smith PLC Annual Report and Accounts 2025
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Glossary (unaudited) continued
A10. Balance sheet impact of IFRS 16
The balance sheet including and excluding the impact of IFRS 16 is shown below:
2025 2024 (restated
1
)
£m
Headline
(pre-IFRS 16)
IFRS 16
adjustment IFRS 16
Headline
(pre-IFRS 16)
IFRS 16
adjustment IFRS 16
Goodwill and other intangible assets 449 (2) 447 491 (1) 490
Property, plant and equipment 251 3 254 308 8 316
Right-of-use assets – 367 367 – 505 505
Investments in joint ventures 2 – 2 2 – 2
Non-current investments 4 – 4 – – –
706 368 1,074 801 512 1,313
Inventories 148 – 148 209 – 209
Payables less receivables (181) (10) (191) (204) (7) (211)
Working capital (33) (10) (43) 5 (7) (2)
Net current and deferred tax assets 31 – 31 38 – 38
Provisions (25) 24 (1) (28) 11 (17)
Operating assets employed 679 382 1,061 816 516 1,332
Net debt (390) (484) (874) (371) (626) (997)
Net assets excluding retirement benefit surplus 289 (102) 187 445 (110) 335
Retirement benefit surplus 1 – 1 87 – 87
Total net assets 290 (102) 188 532 (110) 422
1 Comparative periods have been restated in accordance with the items set out in Note 1b
221 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

A11. Like-for-like revenue reconciliation
The reconciling items between like-for-like revenue change and total revenue
change are shown below:
Per cent UK
North
America
Rest of the
World and
Other
Total Group
– continuing
operations
Like-for-like revenue change 5% 2% 7% 5%
Net space impact –% 4% 5% 2%
Foreign exchange –% (3)% (2)% (2)%
Total revenue change 5% 3% 10% 5%
A12. Operating lease expense
Amounts recognised in Headline Group operating profit on a pre-IFRS 16 basis
areas follows:
£m 2025
2024
(restated
1
)
Fixed charges 232 216
Variable charges 100 93
Net operating lease charges - continuing operations 332 309
1 Comparative periods have been restated to separately disclose results from discontinued
operations (refer to Note 8 for further details)
In the year ended 31 August 2020, the Group adopted IFRS 16. IFRS 16 requires
lessees to account for all leases under a single on-balance sheet model as the
distinction between operating and finance leases is removed. In order to provide
comparable information, the Group has chosen to present Headline measures of
operating profit and profit before tax, asexplained in Note 2 Segmental analysis
of results.
The table above presents the pre-IFRS 16 net operating lease charges, applying
the principles of IAS 17, and Group accounting policies as applicable prior to
1 September 2019, as described in the Glossary on page 209.
The Group leases various properties under non-cancellable operating lease
agreements. The leases have varying terms, escalation clauses and renewal
rights. The Group has a number of lease arrangements in which the rent payable
is contingent on revenue. Contingent rentals payable, based on store revenues,
areaccrued in line with revenues generated. The average remaining lease length
across the Group is five years.
Rentals payable and receivable under operating leases are charged to the
income statement on a straight-line basis over the term of the relevant lease.
Benefits received and receivable as an incentive to enter into an operating lease
arealso spread on a straight-line basis over the lease term.
A13. Headline EBITDA
£m 2025
2024
(restated
1
)
Group operating profit (Note A1) – continuing
operations 134 142
Depreciation, amortisation and impairment (Note 2c) 51 44
Non-cash items 2 12
Headline EBITDA – continuing operations 187 198
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 8 for further details)
A14. Leverage
£m 2025
2024
(restated
1
)
Headline EBITDA (Note A13) 187 198
Headline net debt (Note A8) 390 371
Leverage - multiple – continuing operations 2.1x 1.9x
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 8 for further details)
Glossary (unaudited) continued
222 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

Information for shareholders
Company Secretary and registered office
Ian Houghton, WH Smith PLC, Greenbridge Road, Swindon, Wiltshire SN3 3RX.
Telephone 01793 616161. WH Smith PLC is registered in England and Wales
(number 5202036).
Company website
This Annual Report and Accounts together with other information, including the
price of the Company’s shares, Stock Exchange announcements and frequently
asked questions, can be found on the WH Smith PLC website atwhsmithplc.co.uk.
Annual General Meeting
The Annual General Meeting will be held at the offices of Herbert Smith Freehills
Kramer LLP, Exchange House, Primrose Street, London EC2A 2EG on Monday
2 February 2026 at 9.30am. A separate notice convening the meeting is being
sent to shareholders and includes explanatory notes on each of the resolutions
being proposed.
Shareholder enquiries – the registrars
All enquiries relating to shareholdings should be addressed to the registrars,
Computershare Investor Services PLC, ThePavilions, Bridgwater Road, Bristol BS99
6ZZ. You can call the registrars on the shareholder helpline 0371 495 0100 orvisit
their website at www.investorcentre.co.uk.
Sharedealing services
This can be done through a stockbroker, bank or building society.
Computershare, our registrars, also offer share dealing services for shareholders
(incertain jurisdictions). For internet dealing, log on to computershare.com/
dealing/uk andfor telephone dealing call 0370 703 0084. You will need to have your
Shareholder Reference Number (“SRN”) to hand when making this call. This can be
found on your Form of Proxy oremail notification of availability of AGM documents.
Please note that dealing fees will apply and will vary between providers.
Dividend mandates
If you wish dividends to be paid directly into your bank account through
the BACSTEL-IP (Bankers’ Automated Clearing Services) system, you should
contact Computershare for a Dividend Mandate Form or apply online at
www.investorcentre.co.uk. Shareholders who receive their dividend payments
in this way receive an annual dividend confirmation once a year, with the final
dividend, detailing all payments made throughout the UK tax year.
Financial calendar
The following dates are given for information purposes only. Please check the
WHSmith PLC website at whsmithplc.co.uk nearer the relevant time for full details,
and to ensure that no changes have been made.
Financial year end 31 August 2025
Preliminary results announced 19 December 2025
Annual report posted January 2026
Final dividend ex-dividend date 22 January 2026
Final dividend record date 23 January 2026
AGM 2 February 2026
AGM trading update 2 February 2026
Final dividend payment date 12 February 2026
Half-year end 28 February 2026
Interim results announced April 2026
Trading statement June 2026
Interim dividend ex-dividend date July 2026
Interim dividend record date July 2026
Interim dividend payment date August 2026
Financial year end 31 August 2026
223 WH Smith PLC Annual Report and Accounts 2025
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Information for shareholders continued
ShareGIFT
If you only have a small number of shares which are uneconomic to sell, you
may wish to consider donating them to charity under ShareGIFT, a charity share
donation scheme administered by the Orr Mackintosh Foundation. A ShareGIFT
transfer form may be obtained from our registrar. Further information about the
scheme can be found on the ShareGIFT website at sharegift.org.
Warning to shareholders – boiler room scams
In recent years, many companies have become aware that their shareholders
have received unsolicited phone calls or correspondence concerning investment
matters. These are typically from overseas-based “brokers” who target UK
shareholders, offering to sell them what often turn out to be worthless or high risk
shares in US or UK investments. These operations are commonly known as “boiler
rooms”. Information on how to avoid share fraud or report a scam can be found on
our website at whsmithplc.co.uk. You can also call the Financial Conduct Authority
Consumer Helpline on 08001116768 or go to fca.org.uk/scamsmart.
UK Capital Gains Tax
Demerger 31 August 2006
Following the demerger of the Company on 31 August 2006, in order to calculate
any chargeable gains or losses arising on the disposal of shares after 31 August
2006, the original tax base cost of your ordinary shares of 2
13
⁄
81
p (adjusted if you held
your shares on 24 September 2004 and 22 May 1998 to take into account the capital
reorganisations of 27 September 2004 and 26 May 1998 respectively (see below))
will have to be apportioned between the shareholdings of ordinary shares of 20p
inthe Company and ordinary shares of 5p in Smiths News PLC.
The cost of your shareholding of ordinary shares of 20p in the Company is
calculated by multiplying the original base cost of your ordinary shares of 2
13
⁄
81
p
(adjusted where necessary to take into account the capital reorganisations of
27 September 2004 and 26 May 1998 (see below)) by 0.69585.
The cost of your shareholding of ordinary shares of 5p is calculated by multiplying
the original base cost of your ordinary shares of 2
13
⁄
81
p (adjusted where necessary
to take into account the capital reorganisations of 27 September 2004 and 26 May
1998 (see below)) by 0.30415.
As a result of the share consolidation on 22 February 2008, the nominal value of
the Company’s ordinary shares increased from 20p per ordinary share to 22
6
⁄
67
p
perordinary share.
Capital reorganisation 27 September 2004
If you acquired your shareholding on or before 24 September 2004, in order to
calculate any chargeable gains or losses arising on the disposal of shares after
24 September, the original tax base cost of your ordinary shares of 55
5
⁄
9
p (adjusted if
you held your shares on 22 May 1998 to take into account the capital reorganisation
of 26 May 1998 (see below)) will have to be apportioned between the shareholdings
of ordinary shares of 2
13
⁄
81
p and “C” shares resulting from the capital reorganisation.
The cost of your shareholding of ordinary shares of 2
13
⁄
81
p is calculated by multiplying
the original base cost of your ordinaryshares of 55
5
⁄
9
p (adjusted where necessary to
take into account the capital reorganisation of 26 May 1998 (seebelow)) by 0.73979.
Capital reorganisation 26 May 1998
If you acquired your shareholding on or before 22 May 1998, in order to calculate
any chargeable gains or losses arising on the disposal of shares after 22 May 1998,
the original tax base cost of your ordinary shares of 50p will have to be apportioned
between the shareholdings of ordinary shares of 55
5
⁄
9
p and redeemable “B” shares
resulting from the capital reorganisation.
The cost of your shareholding of ordinary shares of 55
5
⁄
9
p is calculated by
multiplying the original cost of your ordinary shares of 50p by 0.90714.
March 1982 values
If you acquired your shareholding on or before 31 March 1982, in order to calculate
any chargeable gains or losses arising on disposal of shares, the tax base cost
ofyour ordinary shares used the 31 March 1982 base values per share as follows:
“A” ordinary
shares
Arising from an original
shareholdingof “B”
ordinary shares
Ordinary shares of 20p 61.62p 50.92p
Smiths News PLC ordinary shares of 5p 26.93p 22.25p
If you have a complicated tax position, or are otherwise in doubt about your tax
circumstances, or if you are subject to tax in a jurisdiction other than the UK, you
should consult your professional adviser.
“Company” means WH Smith PLC, a public limited company incorporated in
England and Wales with registered number 5202036; and “Group” means the
Company and its subsidiaries and subsidiary undertakings.
224 WH Smith PLC Annual Report and Accounts 2025
Strategic report Corporate governance Financial statements Additional information

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Contact details
WH Smith PLC
Greenbridge Road
Swindon, Wiltshire SN3 3RX
United Kingdom
T 01793 616161
W whsmithplc.co.uk
WHSmith Travel
Aldgate Tower
2 Leman Street
London E1 8FA
United Kingdom
W whsmithplc.co.uk
Investor Relations
W whsmithplc.co.uk/investors
Media Relations
W whsmithplc.co.uk/media
Sustainability
W whsmithplc.co.uk/sustainability
Recruitment
W whsmithcareers.co.uk
Customer Service
Freepost SCE4410
Swindon, Wiltshire SN3 3XS
United Kingdom
E customer.relations@whsmith.co.uk