Overview

• The company now guides to about £25m of North America headline trading profit versus roughly £55m expected, cutting group headline profit to around £110m.
• The overstatement stems from accelerated recognition of supplier incentives and discounts that should be recognized in the next financial year.
• Shares fell roughly 30–35% in early London trading following the disclosure.
• WH Smith said the problem is confined to North America and promised a further update with its preliminary results.
• Hazeltree data show hedge funds had targeted the stock for short selling in July, naming WH Smith the top small-cap short in the UK and Europe.