WH Smith is seeking to recover bonuses paid to former executives following an accounting scandal in North America. The company revealed delayed financial results showing a drop in profits and confirmed it is under investigation by the Financial Conduct Authority (FCA). Former chief executive Carl Cowling and finance director Robert Moorhead received over £7 million in bonuses for the 2023 and 2024 financial years. The scandal involved the improper early booking of promotional revenues in its US unit, which inflated short-term profits and went undetected for three years. This error led to a significant drop in WH Smith's share price, wiping off over £600 million.
The company is committed to cooperating with regulatory bodies and strengthening its financial controls and governance. As part of its remediation plan, WH Smith is reviewing its InMotion business in North America, which sells electronic accessories, and may close up to 20 of its 120 stores in the region. Despite these issues, the company views this division and region as crucial for future growth. The company's sales for the year to August 31 increased to £1.55 billion, but profits fell to £108 million from £114 million the previous year.