WH Smith (SMWH) H2 2025 earnings summary

Executive summary

• Completed a strategic reset, exiting High Street and Funky Pigeon to focus on global travel retail, profitability, and a leadership position in Travel Essentials, with disciplined capital allocation.

• Exited unprofitable North America fashion and specialty stores, limited InMotion expansion, and shifted Rest of World to a franchise model in subscale markets.

• Undertook a comprehensive review of North America and Rest of World divisions, exiting unprofitable stores and subscale markets, and shifting to a franchise model where appropriate.

• Implemented a remediation plan following a Deloitte review, focusing on governance, controls, and cultural change, with an ongoing search for a new Group CEO.

Financial highlights

• Group revenue increased 5% to £1.6bn, with like-for-like growth across all divisions and 285 net store openings; constant currency revenue up 7%.

• Headline trading profit was £159m; headline profit before tax was £108m; headline EBITDA was £187m.

• Headline net debt at year-end was £390m, with leverage at 2.1x; proposed final dividend of £0.06 per share, full-year £0.173 per share.

• Free cash flow supported by £187m EBITDA, £81m CapEx, and £4m working capital inflow; free cash flow increased 80% to £63m.

• Like-for-like revenue growth achieved across all divisions.

Outlook and guidance

• Group revenue growth expected at mid-single digits for FY26: UK 3%-5%, North America 6%-8%, Rest of World 4%-6%.

• Headline trading profit margin guidance: UK 14%-15%, North America 7%-8%, Rest of World ~5%.

• Group headline profit before tax and non-underlying items guided at £100m-£115m.

• CapEx for FY26 expected at £90m, normalizing to £80m post-FY26; leverage targeted below 2.0x.

• Finance costs expected to rise to £33m-£35m due to refinancing.