WH Smith (SMWH) H1 2026 earnings summary

Executive summary

• Group revenue increased 5% year-over-year to £748 million, with growth across all divisions and a major UK Air store development program completed.

• Headline profit before tax declined to £3 million, mainly due to inflationary pressures and store development disruption.

• Dividend suspended to prioritize debt reduction and strengthen the balance sheet amid a cautious outlook.

• Focus on cost control, cash generation, and operational improvements amid ongoing market and geopolitical uncertainty.

• New flagship stores opened at Heathrow Terminals 3, 4, and 5, with strong early performance.

Financial highlights

• Group headline EBITDA was £48 million, with headline profit before tax and non-underlying items at £3 million.

• Headline net debt stood at £496 million, with a leverage ratio of 2.9x Headline EBITDA.

• Free cash outflow was £61 million, improved from £72 million in the prior year.

• Capex increased to £50 million from £38 million, reflecting investment in new stores and refurbishments.

• Non-underlying items totaled £28 million, including impairments, transformation, and investigation costs.

Outlook and guidance

• FY26 headline profit before tax (underlying) expected at £90–£105 million.

• Revenue growth guidance: Group 3–5%, UK 1–3%, North America 6–8%, Rest of World 2–4%.

• Net debt expected to reduce to around £420 million by year-end.

• Focus on cash generation, cost discipline, and reducing leverage below 2.0x.

• Cautious outlook due to Middle East conflict and global economic uncertainty.