Preliminary Results Announcement

THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION

12 November 2026

WH SMITH PLC

PRELIMINARY RESULTS ANNOUNCEMENT

FOR THE YEAR ENDED 31 AUGUST 2026

Transformation is underway to drive value

Financial results1:

Leo Quinn, Executive Chair, commented: 

“This last year, we have commenced a fundamental reset of the Group. The capital raise supported by our shareholders strengthened the balance sheet. It also enabled us to launch a self-help programme focused on restructuring the cost base, improving cash generation and accelerating our store portfolio rationalisation to eliminate loss-making investments. Going forward, our decisions and capital allocation will be aligned with a rigorous assessment of returns.

“In parallel, we are working to provide the Group with a foundation for sustainable, profitable growth, including investing in robust systems and governance processes to support successful execution. As we accelerate the pace, this must go hand in hand with building a high-performing retail culture that gives our people the confidence and accountability to make faster decisions and drive value.

“Whilst this is a complex programme, I am confident that delivering it will transform WHSmith over the medium-term into a Group capable of generating attractive returns, with significant annual free cash flow.”

Group financial summary

Total Group revenue increased by 5% on last year to £1,625m with LFL revenue3 growth across Air in all divisions.

The Group generated a Headline trading profit of £130m in the year, with trading profit margins reducing to 8% (2025: 10%). This reflects the combined impacts of competitive UK airport contract renewals, inflation and a challenging macro trading environment. Headline profit before tax was £76m.

The Group IFRS loss before tax was £107m (2025: £2m profit).

Headline net debt at the end of the period was £325m (2025: £390m) with leverage reduced to 2.0 times (2025: 2.1 times), following the equity placement of £103m in June.

Current trading

In the first 10 weeks of the current financial year, Group LFL revenue was flat with total constant currency revenue growth of 1%. This was in line with the Group’s expectations and reflects continued softer consumer demand arising from global macroeconomic pressures and lower passenger volumes in North America.

Outlook and FY27 planning assumptions

The Group continues to plan cautiously given the ongoing macroeconomic uncertainty. At the same time, the strengthening of the Group’s foundations for future returns will continue at pace, together with the execution of opportunities for self-help.

For the 12-month period ending 31 August 2027, the Group is planning total revenue for each division on the following basis: UK broadly flat versus the prior year, North America growth of low single digit versus the prior year (with store exits/closures largely offsetting new store openings), and Rest of the World to decline 10-20% versus the prior year (depending on the timing of store exits already announced).

Headline trading profit margin is expected to be broadly flat on 2026; UK flat at around 12%, with a slight improvement in North America and ROW as the transformation benefits start to take effect. As a result, the Board currently expects full year Headline Group profit before tax and non-underlying items to be in line with current market expectations of £75m to £85m.

Headline net debt is expected to be around £320m at 31 August 2027.

FY27 technical planning assumptions for the Group can be found on page 6.

ENQUIRIES:

WH Smith PLC’s Preliminary Results 2026 are available at whsmithplc.co.uk.

This Announcement contains inside information and is issued on behalf of the Group by Ian Houghton, Company Secretary.

1 All numbers presented throughout this statement are from continuing operations unless otherwise stated.

2 Constant currency.

3 Alternative Performance Measures (APMs) defined and explained in the Glossary on page 41.

4 The Group continues to report profit and other key financial measures on a pre-IFRS 16 basis. Measures described as ‘Headline’ are presented pre-IFRS 16. Pre-IFRS 16 profit numbers exclude the impact of IFRS 16 by removing the depreciation on right-of-use (ROU) assets and interest arising on unwinding of discount on lease liabilities, offset by the impact of adding back in associated rental charges. Reconciliations from pre-IFRS 16 measures to IFRS 16 measures are provided in the Glossary on page 41.

Executive Chair Overview

Over the last few months, we have undertaken a detailed analysis of the Group’s strategy and recent historical performance. It is clear from this that forced growth delivered a complex and siloed Group structure without scalable benefits. This resulted in increased costs, too many loss-making stores, acquisitions not integrated effectively and high organisational complexity.

The successful capital raise achieved with investors’ support in the summer of 2026 has strengthened the balance sheet and reduced leverage to 2.0 times. It has enabled us to introduce a programme which we can execute at pace to strengthen the Group’s foundations and to deliver self-help benefits, while making disciplined decisions on capital investment based on a clear returns criteria.

WHSmith is a business with significant strengths: a strong and recognised brand, attractive market positions, prime locations and a dedicated team. Its presence in the specialised travel retail sector has attractive structural growth projections over the medium and long-term. Although there are headwinds in the macro environment, our focus is on the areas which we control to deliver strengthened performance and cash generation:

There is a cost to the transformation programme, but it is necessary to strengthen the foundations of the business to improve profitability. The programme costs are expected to complete in 2027/28 with the benefits to continue to accrue over the medium to long-term.

The focus in the UK division is to leverage its well-invested premium space to drive higher margins, cash generation and returns. During the year, more than 80% of UK Air contracts were secured under medium to long-term agreements. While the associated increase in rents in a more competitive environment is impacting profitability in the near-term, there are clear opportunities to recover the higher space costs over time through stronger commercial execution and a leaner operating model. Retail expansion is focused on better category mix to increase spend per passenger through basket size. During the year, refurbished one-stop-shop stores opened across Heathrow Terminals 3, 4 and 5, Liverpool, Belfast and East Midlands airports with the broader offer driving penetration, increasing basket size and average transaction value.

In North America, the Group is targeting a trading margin of more than 8% over the medium-term by exiting loss-making stores, increasing the mix of higher-return Travel Essentials and driving greater operational leverage, alongside disciplined investment in new growth opportunities. During the year, the core Travel Essentials business performed well with 26 new Travel Essentials stores opened. The pipeline of won and yet to open Travel Essentials stores is c.40, including recent wins. Continued infrastructure investment across North American airports is creating a pipeline of opportunities to secure further high-quality Travel Essentials space through disciplined capital allocation. This, combined with a tailored customer proposition, will increase spend per passenger and returns. In contrast, the Resorts and InMotion businesses continue to perform below expectations. Following a review of both businesses, the division closed 26 Resorts stores during the year and is on track to exit the remaining balance of fashion stores by April 2027. For the InMotion business, any future store openings will be limited.

In the ROW division, the Group is actively reshaping the portfolio around a smaller number of core directly operated markets, alongside a capital-light franchise business. Within the directly-run markets, new investments were agreed in the Republic of Ireland, including one-stop-shops at Dublin airport. The Group has exited Düsseldorf and Oslo airports and will exit the Netherlands, Sweden and Denmark in FY27, while discussions are ongoing to exit further markets or transition to franchise.

This is a complex transformation programme across the Group, but I am confident that delivering it will transform WHSmith over the medium-term into a Group capable of generating significant annual free cash flow and attractive returns.

The Group’s remediation plan, implemented following the issues identified in the North America division in 2025, is well advanced, strengthening governance, controls and systems and establishing globally aligned processes.

The Group continues to cooperate with the FCA as part of 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.

Group financial review

Total Group revenue at £1,625m (2025: £1,553m) was up 5% compared to the prior year and up 2% on a LFL basis.

UK revenue grew by 4%, with LFL growth of 2%. Hospitals delivered the strongest LFL performance at 6%, while Air and Rail each grew by 1%. UK Air performance reflected expected trading disruption during the store development programme and the impact of the Middle East conflict through the second half.

North America revenue increased by 9%2, while LFL revenue was flat. Air grew by 15% at constant currency, largely driven by new Travel Essential store openings, with 1% LFL growth impacted by the macro environment and the Q4 reduction in passengers. Travel Essentials air formats were the strongest performing format within North America Air, with constant currency revenue growth of 23% and LFL growth of 3%. InMotion LFL revenue was down 3%. Resorts remained challenging, with LFL revenue down 8%, reflecting lower visitor numbers to Las Vegas.

In Rest of the World and Other, revenue grew by 1%2, with LFL growth of 4%.

Group trading profit

The Group delivered a Headline trading profit in the year of £130m (2025: £159m). The UK decreased by £23m to £107m, reflecting increased rent costs from airport contract renewals alongside the challenging macro environment, as weaker consumer sentiment led to increased promotional activity in the second half, while brand marketing and supplier income declined year on year. North America remained flat at £15m, impacted by our ongoing transformation agenda and the macro headwinds. ROW decreased by £6m to £8m, reflecting a weaker performance in some markets as the portfolio is rationalised further and inflation in staff and logistics costs.

Group profit

Headline Group profit before tax and non-underlying items was £76m (2025: £108m), after incorporating unallocated central costs of £24m (2025: £25m) and Headline net finance costs of £30m (2025: £26m). The Group IFRS loss before tax was £107m (2025: £2m profit).

Headline non-underlying items amounted to £164m (2025: £92m). The largest category was the expected £103m of impairments and onerous-contract charges, largely in North America. Transformation costs, including investments to strengthen the foundations of the Group and improve profitability; restructuring; and store closures amounted to a further £41m.

Diluted Headline earnings per share, before non-underlying items, was 30.3p (2025: 43.4p). This reflects lower profit after tax; an increased share count following the equity placement in June; and a greater share of North America profits attributable to non-controlling interests.

Group cash flow and net debt

The Group generated Headline EBITDA3 of £166m (2025: £187m) contributing to a free cash inflow of £52m (2025: £63m). The equity placement generated cash proceeds of £103m, and together with the free cash flow, offset by outflows including those for non-underlying items of £48m (2025: £38m); and discontinued operations of £14m (2025: £25m) contributed to the reduction in Headline net debt to £325m (2025: £390m).

Leverage at the 31 August 2026 was 2.0 times Headline EBITDA (2025: 2.1 times). Net debt including IFRS 16 lease liabilities at 31 August 2026 was £849m (2025: £874m).

Capital allocation framework

The Group is focused on reducing debt while continuing to invest selectively in the business. Priorities are set out below:

Technical planning assumptions FY27 (Pre-IFRS 16 basis)

Change of financial year-end

Following the change in seasonality of the Group as a result of the sale of the High Street business, WHSmith will change its financial year-end in 2027, moving from 31 August to 31 December.

The Group's reporting schedule following the change will be as follows:

Divisional review - UK

The UK is the Group’s largest division and has a market-leading position in Travel Essentials. As such, the focus is on driving higher margins, cash generation and returns through improved commercial execution, a leaner operating model and disciplined capital allocation.

Total revenue increased by 4% to £870m (2025: £834m) in the year, with LFL revenue up 2%. Headline trading profit was £107m (2025: £130m), reflecting the disruption from the store development programme, as expected, higher rents following competitive airport contract renewals, labour inflation and wider macroeconomic pressures.

During the year, the UK division continued to invest in the quality of its estate and strengthen its one-stop-shop proposition, bringing together its core Travel Essentials categories to increase customer convenience and drive spend per passenger. FY26 saw the UK division complete its largest ever store development programme, including refurbished store openings across Heathrow Terminals 3, 4 and 5, East Midlands, Belfast, and Liverpool airports.

More than 80% of UK Air contracts are now secured, providing better-quality space with medium to long-term agreements. Although higher rental costs arising from a more competitive environment and inflation pressures will continue to impact profitability in the near term, stronger commercial and operational execution is planned to support margin recovery over time.

In addition, weaker consumer sentiment during the year resulted in increased promotional activity and a reduction in brand marketing, reflecting a more cautious supplier approach in an uncertain macroeconomic and geopolitical backdrop. Together, these factors reduced net margin to 12%. Cost-saving initiatives, including store and support centre restructuring, partly offset these pressures.

Having invested to establish and rapidly scale the core categories of food-to-go and health and beauty in recent years, the focus is now on optimising these categories to drive higher margins and returns. This includes refining food-to-go ranges to reduce waste and rationalising health and beauty ranges to concentrate inventory on the highest-performing product lines. The business has built a leading position in health and beauty in airports, successfully winning additional space from the incumbent health and beauty retailer across Heathrow Terminals 3, 4 and 5 and East Midlands airports.

Air revenue increased by 4%, with LFL revenue up 1%, reflecting store development activity and a more challenging trading environment.

Hospitals delivered the strongest performance, with revenue up 9% and LFL revenue up 6%, supported by the strong multi-format proposition and established third-party partnerships.

Rail revenue increased by 3%, with LFL revenue up 1%, with further opportunities to extend the one-stop-shop approach across the estate.

Looking ahead, the focus is now on driving greater returns from the UK estate: capturing more value from premium locations, increasing spend per passenger, maximising the one-stop-shop approach and using cost optimisation and operational leverage to deliver margin improvements and cash generation. The Group is targeting a UK trading margin of 12-13% over the medium-term.

Divisional review – North America

North America is an attractive market, supported by significant investment in airport infrastructure and long-term structural growth in passenger numbers. These macro fundamentals and the division’s current low market share offer significant value to unlock. The Group is targeting a North America trading margin of more than 8% over the medium-term, through exiting loss-making stores, increasing the mix of higher-return Travel Essential stores and driving greater operational leverage, alongside disciplined capital investment in new opportunities.

During the year, total revenue in North America increased by 9%, on a constant currency basis, with total revenue up 6% to £437m (2025: £413m). The Air segment in North America was up 15% on a constant currency basis and LFL revenue increased by 1%. Within this, the Travel Essentials business was the key driver of performance, with total revenue on a constant currency basis up 23% and up 3% on a LFL basis. Resorts remained challenging, with LFL revenue down 8%, reflecting continuing lower visitor numbers to Las Vegas.

In North America, as a condition of our agreements with airports, partners take a minority interest in our stores, otherwise known as non-controlling interests. As the Air business continues to grow, a greater share of North America trading profits is attributable to NCIs. Actions are in place to evolve the NCI model with a focus on the cost allocation framework and commercial terms. For the year ahead, we would expect profit attributed to NCIs of c.£13m and in the medium term we would expect NCIs to share around 35% of North America trading profit.

Headline trading profit was £15m (2025: £15m), reflecting the Group’s ongoing transformation agenda and macroeconomic headwinds.

Revenue by key channels

Air - Travel Essentials

The Travel Essentials business has delivered a strong performance, growing 23% on a constant currency basis and with LFL growth of 3%, underpinned by customer demand and attractive margins.

Travel Essentials is the division’s most profitable segment. Over the past four years, the Travel Essentials business has grown from 37% of the overall North America business to now representing approximately 60% of total North America revenue. It is anticipated that as revenues grow and operations are strengthened, margins and cash will improve further, enhancing the North America division’s value.

During the year, 26 new stores were opened, including at Albuquerque airport featuring a marketplace format. This replicates the Group’s one-stop-shop format in the UK with higher spend per passenger and average transaction values, reflecting the greater range of categories and convenience in the customer journey.

Recent tender wins include 8 Travel Essential stores across Nashville, Seattle and Panama City airports. These stores have an average payback period of 2 years. These tender wins demonstrate a clear ability to continue to win in prime locations and drive attractive and profitable returns.

The division’s new store pipeline is strong with c.40 stores already won and due to open over the next 2 years.

Air - InMotion

InMotion revenue decreased by 3% on a constant currency basis and 3% on a LFL basis in the year. The focus is now on strengthening the commercial proposition, simplifying ranges, improving availability and reducing working capital.

During the year, 15 stores were closed with 7 new store openings across Dallas, Denver, Detroit and Albuquerque airports, primarily as part of wider retail packages within these airports. Moving forward, new store openings will be limited.

Following a review of the existing store portfolio, it is anticipated that c.50 loss making or marginally profitable stores will close over the medium-term.

The reduced but higher performing store estate is expected to increase its margins over time, through range optimisation and better operational performance.

Resorts

Resorts revenue decreased by 14% on a constant currency basis and 8% on a LFL basis in the year, reflecting the store closure programme and the continued reduction in Las Vegas visitor numbers.

As previously announced, the Group does not plan to open any new stores in Resorts and decisive action has been taken in the year to begin a controlled exit of fashion stores and to reduce the number of speciality stores.

During the year, 26 Resort stores were closed, largely including 17 fashion and 5 speciality stores, where the leases were short or there were opportunities to exit without penalty. It is expected that the division will complete the exit of the fashion stores by April 2027.

Other format options or controlled exit options for the remaining speciality stores, where the lease arrangements run over the medium-term, are under review.

The Group is continuing to review its strategic options for the Welcome to Las Vegas stores.

The Hotel Convenience stores are profitable and cash generative and these will continue to be optimised.

Divisional review – Rest of the World and Other

The Rest of the World division delivered total revenue growth of 1% on a constant currency basis, with LFL revenue up 4%. Headline trading profit was £8m (2025: £14m), reflecting weaker performance in some markets as the division rationalises the portfolio and inflation in staff and logistics costs.  

This division is focused on building stronger positions in core markets, rationalising sub-scale and lower-return operations and increasingly using a capital-light franchise model for growth. Direct investment will be concentrated in markets where the business has scale and expertise. Four uneconomic stores at Düsseldorf Airport were closed and the Group exited its Norwegian business. The Group also decided not to retender at Schiphol Airport in the Netherlands and will exit stores in Denmark and Sweden in FY27, consistent with the approach to reduce exposure to unprofitable markets.

Discussions are progressing on moving a number of other directly operated markets to a franchise model, further reducing capital intensity and operational complexity. At the same time, the Group continues to see attractive opportunities for international growth through franchise partnerships. During the year, new franchise stores were opened or secured in markets including Saudi Arabia, alongside further opportunities across the Middle East and other international markets.

Overall, the focus is on creating a simpler, more profitable and less capital-intensive international business, with stronger margins, cash generation and returns over the medium-term. The Group is targeting a ROW trading margin of around 5% over the medium-term.

CultPens.com delivered a good performance in the year, in line with expectations. The Group completed the sale of Cult Pens in early September 2026.

Financial review – Income Statement

Headline Group profit before tax and non-underlying items was £76m (2025: £108m). The Group IFRS loss before tax was £107m (2025: £2m profit).

Net finance costs

Headline net finance costs before non-underlying items for the year were £30m (2025: £26m). The increase principally reflects the higher cost of the US Private Placement (‘USPP’) notes and the term loan compared with the convertible bond that matured in May. Working capital management and the June equity placement partly offset that increase. The charge includes £6m (2025: £9m) relating to the non-cash debt accretion charge from the convertible bond.

Lease interest of £22m arises on lease liabilities recognised under IFRS 16, bringing the total net finance costs before non-underlying items on an IFRS basis to £52m (2025: £46m).

Tax

The Headline effective tax rate3 was 29% (2025: 42%) on profit before tax and non-underlying items for the year. This is higher than the UK corporation tax rate of 25% largely due to the inability to recognise tax losses as deferred tax assets in countries being exited, or currently in a tax loss position.

Earnings per share (before non-underlying items)

Headline diluted EPS before non-underlying items was 30.3p (2025: 43.4p), a decrease of 30% on the previous year. The basic IFRS loss per share was 68.7p (2025: 24.4p loss).

Alongside lower profit before tax, this reflected the increased share count following the equity placement, and a greater share of North American profits attributable to NCI.

The share of profits attributable to NCI before non-underlying items, of £13m, includes a one-off charge relating to prior years of £2m. Growth of the North America Air business has also seen an increasing share of profits attributable to NCI. Actions are in place to evolve the NCI model with a focus on the cost allocation framework and commercial terms.

The diluted weighted average number of shares in issue used in the calculation of Headline diluted EPS reflects the number of shares held by the ESOP Trust.

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. Non-underlying items in the year in the Income Statement are detailed in the table below.

The non-underlying operating items included in the net charge of £164m, on a Headline basis, are in line with guidance and mainly consist of:

The cash outflow totals £48m (2025: £38m), mainly relating to transformation programmes and spend relating to prior year charges, including the regulatory-related costs.

A Headline tax credit of £35m (2025: £18m) has been recognised in relation to the above items.

Non-underlying costs will continue through 2027/28 as we move closer to completing the existing programmes, with a total charge of c.£50m (FY27: c.£30m; FY28: c.£20m) and cash outflows of c.£65m (FY27: c.£40m to include payables timing from FY26; FY28: c.£25m). Of the total charge, transformation costs will form approximately £35m.

Non-underlying items from discontinued operations, relating to final separation costs from the sale of the High Street business in the prior year, total £2m (2025: Headline £146m; IFRS £137m). Cash outflows amounted to £14m (2025: £25m) including spend relating to prior year charges.

Financial review – Cash flow and net debt

Free cash flow

5 Excludes cash flow impact of non-underlying items

The Group generated a Headline EBITDA of £166m in the year (2025: £187m), contributing to a free cash inflow of £52m (2025: £63m). There was a working capital outflow of £3m in the year (2025: inflow of £4m) relating to a structural reduction in inventory across the Group and lower receivables, largely from lower supplier income and prompter cash collection. This was offset by the reversal of a one-off payables timing benefit from the prior year and normalisation of the payables position in the current year. Net corporation tax receipts in the year were £3m (2025: £28m payments) relating to FY25 recoveries.

Capex was £94m (2025: £81m) primarily related to investment in new stores and the development of existing locations.

Headline net debt

Headline net debt is presented on a pre-IFRS 16 basis.

As at 31 August 2026, the Group had Headline net debt of £325m comprising term debt facilities of £120m, US private placements of £200m and net overdrafts of £5m (2025: £390m, convertible bonds of £320m and net overdrafts of £70m). On an IFRS 16 basis, net debt was £849m (2025: £874m), which includes an additional £524m (2025: £484m) of lease liabilities.

In addition to the free cash flow, the Group generated proceeds from the equity placement of £103m.

This was offset by a cash outflow in respect of non-underlying items from continuing operations of £48m (2025: £38m) mainly relating to transformation and restructuring projects and spend relating to prior year charges including the regulatory-related costs; and £14m (2025: £25m) of separation costs for discontinued operations.

Further cash outflows include payment of the final dividend for 2025 of £8m (2025: total dividends of £43m); purchase of own shares for employee share schemes of £10m (2025: £nil), of which £5m is advanced for 2027 purchases; and £5m (2025: £7m) for distributions to NCIs.

The Group repaid convertible bonds amounting to £327m in May 2026 upon maturity, drawing down on the USPP notes (£200m) and the term loan (£120m). The funding position comprises £720m of committed long-term facilities, including £200m of fixed-rate USPP notes, with no near-term refinancing requirement:

6 Drawdown of £48m as at 31 August 2026

Leverage

Leverage at 31 August 2026 was 2.0 times (2025: 2.1 times), comprising Headline net debt over Headline EBITDA. This provides headroom to the 3.0 times covenant although represents a seasonal low and the focus remains on deleveraging over the medium-term.

Financial review – Other measures

Fixed charges cover3

Fixed charges, comprising fixed rent and net finance costs, were covered 1.6 times (2025: 1.6 times) by Headline EBITDA before fixed rent.

Return on capital employed3

Return on capital employed is calculated as the Group operating profit before non-underlying items 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/obligation and net current and deferred tax balances. Returns declined in the year as investment increased and UK profit reduced. The medium-term target is for returns above 20%.

Balance sheet

The Group had Headline net assets of £305m, £15m higher than last year end reflecting the lower net debt offset by impairments and provisions recorded in the year. Under IFRS the Group had net assets of £188m (2025: £188m).

Store numbers

As at 31 August 2026, the Group operated from 1,233 stores (2025: 1,280). As part of the Group’s transformation to improve the quality of its space, 104 stores were closed in the year. The focus will remain on opening more profitable stores and better-quality space.

In the UK, 8 new stores were opened, and 29 stores were closed, which included the closure of certain smaller loss-making stores together with closures relating to landlord redevelopment or the blending of multiple stores into a single one-stop-shop. The UK store estate is expected to stay broadly stable in the medium term.

In North America, the Group now operates 287 stores in Air, of which around 60% are Travel Essentials. There were closures across InMotion and Resorts as part of the store rationalisation programme, which will continue into FY27, with new openings largely in Travel Essentials. The North America net store estate will slightly reduce over the medium term, although more weighted towards Travel Essentials.

Across Rest of the World, the Group is exiting sub-scale direct markets, contributing to the closure of 29 stores in the year. The division now operates from 312 stores. Of these, 58% are directly-run, 30% are franchise and 12% are joint venture and whilst the weighting to franchise will increase, the store estate will slightly reduce over the medium term.

Events after the balance sheet date

None to report.

Principal risks and uncertainties

During the year, the Board has undertaken a detailed review of the Company’s principal and emerging risks. The Board review concluded that one principal risk be broadened, from ‘International expansion’ to ‘Strategic change and transformation’, together with the renaming, separation or combining of certain other principal risks.

The Group’s redefined principal risks, together with the Group’s risk management process, will be set out in the 2026 Annual Report and Accounts, and relate to the following areas: External environment and cost inflation; Winning, retaining and growing profitable space; Strategic change and transformation; Financial reporting integrity; Liquidity, financing and covenant compliance; Technology and cyber security; Operational and supply chain resilience; Health and safety, food safety and product quality; People, talent and culture; Corporate compliance and responsible business; and Climate change and environment.

This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulations.

This announcement contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group. By their nature, these statements involve uncertainty since future events and circumstances can cause results to differ from those anticipated. Nothing in this announcement should be construed as a profit forecast. The Group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

WH Smith PLC 

Group Income Statement

For the year ended 31 August 2026

1 Alternative performance measure. The Group has defined and explained the purpose of its alternative performance measures in the Glossary on page 41

2 See Note 4 for an analysis of non-underlying items. See Glossary on page 41 for a definition of alternative performance measures

WH Smith PLC 

Group Statement of Comprehensive Income

For the year ended 31 August 2026

WH Smith PLC 

Group Balance Sheet

As at 31 August 2026

WH Smith PLC 

Group Cash Flow Statement

For the year ended 31 August 2026

1 Includes interest payments of £18m on lease liabilities (2025: £16m) for continuing operations. Interest payments on lease liabilities for discontinued operations were £nil (2025: £4m)

2 Capital repayments of obligations under leases for discontinued operations were £nil (2025: £30m)

WH Smith PLC 

Group Statement of Changes in Equity

For the year ended 31 August 2026

1 Comprises a £17m increase relating to capital contributions from non-controlling interests; offset by a £10m reduction relating to the share of profit earned by non-controlling interests, which has reduced the receivable owed to the Group but is not distributed as a cash outflow; and a £11m reclass from Non-controlling interests to Retained earnings in relation to a change in methodology for allocating the share of profits to non-controlling interests

WH Smith PLC 

Group Statement of Changes in Equity (continued)

For the year ended 31 August 2026

1 Comprises capital contributions from non-controlling interests

WH Smith PLC 

Notes to the Financial Statements

For the year ended 31 August 2026

Whilst the information included in the consolidated financial statements has been prepared in accordance with UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006, this announcement does not itself contain sufficient information to comply with IFRSs. The financial information in this full year results statement does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.

Statutory accounts for the year ending 31 August 2025 have been delivered to the Registrar of Companies and those for 2026 will be delivered following the Company’s Annual General Meeting. The Annual Report for the year ending 31 August 2026 and this full year results statement were approved by the Board on 12 November 2026. The auditors have reported on the Annual Report for the years ended on 31 August 2026 and 2025 and neither report was qualified and neither contained a statement under Section 498(2) or (3) of the Companies Act 2006.

Following Board approval, the Group will be revising its financial year end to 31 December in 2027. The next consolidated financial statements will be prepared for the period 1 September 2026 to 1 January 2028. A retail calendar will be adopted.

The consolidated financial information for the year ended 31 August 2026 has been prepared on a consistent basis with the financial accounting policies set out in the Accounting Policies section of the WH Smith PLC Annual Report and Accounts 2025 except as described below.

New accounting standards adopted by the Group

The group has adopted the following amendment to the accounting standards which became mandatory for the year ended 31 August 2026:

The group has considered the above new amendment and has concluded that it does not have a material impact on the Group’s consolidated financial statements.

New accounting standards in issue but not yet effective

At the Group balance sheet date, the following standards and amendments which have not been applied in these financial statements, were in issue but not yet effective:

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. For the Group, this will be the 52-week period ending 30 December 2028 with no early adoption. IFRS 18 requires retrospective application. 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 Group’s impact assessment and transition planning for IFRS 18 is currently in progress and it is not yet practicable to quantify the effect of IFRS 18 on these consolidated financial statements, however there is no impact on presentation for the Group in the current year given the effective date.

WH Smith PLC 

Notes to the Financial Statements

For the year ended 31 August 2026

Alternative Performance Measures (APM’s)

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 and measures pre-IFRS16 defined as ‘Headline’ including: Headline trading profit, Headline Group profit from trading operations, Headline profit before tax, Headline earnings per share, Headline EBITDA and Headline net debt. Other adjustments include: like-for‑like revenue, Headline effective tax rate, gross margin, free cash flow, return on capital employed, fixed charges cover and leverage. These APMs are set out in the Glossary on page 41 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, transformation, restructuring and store rationalisation costs linked to Board agreed programmes, costs relating to M&A activity, impairment charges and other property costs, regulatory-related costs, 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.

Going concern

The consolidated financial statements have been prepared on a going concern basis.

The directors are required to assess whether the Group can continue to operate for at least 12 months from the date of approval of these financial statements.

The Group financial review describes the Group’s financial position, cash flows and borrowing facilities and also highlights the principal risks and uncertainties facing the Group. The Group financial review also sets out the Group’s business activities together with the factors that are likely to affect its future developments, performance and position.

In making the going concern assessment, the directors have undertaken a rigorous assessment of current performance and forecasts for the 16-month period to December 2027, including expenditure commitments, capital expenditure and available borrowing facilities. The Group’s borrowing facilities are described in the Financial review. The covenants on the Group’s facilities are based on fixed charges cover and leverage and are tested half-yearly, with testing dates over the going concern period of February 2027, August 2027 and, as a result of the upcoming change of financial year end, December 2027. 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.

The directors have modelled a base case scenario consistent with the latest Board approved forecasts, which include assumptions over passenger numbers, spend per passenger, cost inflation and headline trading margin. Forward assumptions are broadly in line with results achieved in the year to 31 August 2026. Under this scenario the Group has significant liquidity and complies with all covenant tests throughout the assessment period.

The directors have also modelled a severe but plausible downside scenario to incorporate macroeconomic uncertainties and challenges. This scenario represents a reduction to revenue assumptions of five per cent against the base case, together with a proportionate reduction in cost of sales and variable rents. Under this downside scenario, without any mitigations, the Group would continue to have significant liquidity headroom on its existing facilities and complies with all covenant tests throughout the assessment period.

WH Smith PLC 

Notes to the Financial Statements

For the year ended 31 August 2026

Going concern (continued)

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, after incorporating available certain mitigating actions, including no employee bonuses; and deferral of the purchase of shares for employee share schemes, a covenant breach occurs upon revenue decreasing by seven per cent throughout the going concern period.

Based on the above analysis, the directors have concluded that the Group is able to adequately manage its financing and principal risks, and that the Group 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.

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:

Key sources of estimation uncertainty relate to:

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:

WH Smith PLC 

Notes to the Financial Statements

For the year ended 31 August 2026

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.

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.

Rest of the World and Other revenue includes revenue from Australia of £91m (2025: £85m), Ireland £65m (2025: £64m) and Spain £67m (2025: £59m). No other country has individually material revenue in the context of total Group revenue.

WH Smith PLC 

Notes to the Financial Statements

For the year ended 31 August 2026

1 Presented on a pre-IFRS 16 basis. Alternative Performance Measures are defined and explained in the Glossary on page 41

WH Smith PLC 

Notes to the Financial Statements

For the year ended 31 August 2026