WHSmith launches capital raise as Middle East conflict pressures profit outlook

Traders Union
All News
Financial News
WHSmith launches capital raise

Highlights

WHSmith launches an equity fundraising of 26 million new shares, about 20% of existing capital, aiming to reduce leverage amid pressured profit outlook.
WHSmith lowers annual pre-tax profit forecast to £75 million–£90 million from £90 million–£105 million as airport spending weakens and shares fall 16% to 416.6p.
In North America, like-for-like sales drop 4% in seven weeks and WHSmith will record a £150 million non-cash impairment charge related to its InMotion business restructuring.

Fundraising plan and weaker trading

As reported by Financial Times, WHSmith says it plans an equity fundraising of 26 million new shares, equal to about a fifth of its existing share capital, as it seeks to cut leverage and reinforce its finances.

The retailer says like-for-like sales rise 1 per cent in the past seven weeks, while sales increase 2 per cent in the 14 weeks to June 6. It also says spending at its airport stores is under pressure as the conflict involving Iran chills travel demand.

Shares fall as much as 17 per cent at the open and are down 16 per cent at 416.6p in early trading. The company also lowers its annual pre-tax profit forecast to £75 million to £90 million from £90 million to £105 million.

Debt reduction and North America pressure

The capital raise is intended to reduce WHSmith's net debt to about two times earnings before tax, interest, depreciation and amortisation by the end of the financial year. Net debt currently stands at about £496 million, close to three times earnings.

The group is also dealing with wider operational strain in North America after previously flagging accounting issues linked to the recognition of supplier payments tied to promotions. This week, the UK's accounting regulator launches an investigation into PwC's audit of WHSmith.

WHSmith says like-for-like sales in North America over the past seven weeks drop 4 per cent as higher airfares and reduced capacity curb trips to cities such as Las Vegas. The company also says it will book a one-off non-cash impairment charge of £150 million tied to the review and restructuring of its InMotion retail technology business in North America.

We previously reported on WHSmith’s second profit downgrade this year and its plan to raise equity equal to about 20% of its share capital as international travel disruption weighed on passenger volumes and spending. That update also highlighted the company’s reduced profit guidance for the 2026 financial year and linked the weaker trading backdrop to heightened geopolitical uncertainty affecting travel demand.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.