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| Version 1 | Version 2 |
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| WH Smith shares tumble after accounting blunder | WH Smith shares tumble after accounting blunder |
| (32 minutes later) | |
| The WH Smith name is only seen in airports in the UK now | The WH Smith name is only seen in airports in the UK now |
| WH Smith shares slumped 38% on Thursday morning following an accounting error which led it to overstate its North America profits. | WH Smith shares slumped 38% on Thursday morning following an accounting error which led it to overstate its North America profits. |
| The company has cut its profit forecasts in the region as a result and has ordered a review by auditors. | The company has cut its profit forecasts in the region as a result and has ordered a review by auditors. |
| The firm said the mistake was because of an issue in how it calculated the amount of supplier income it received - essentially causing it to be logged too early. | The firm said the mistake was because of an issue in how it calculated the amount of supplier income it received - essentially causing it to be logged too early. |
| Analysts have said the error is a "huge embarrassment" for WH Smith which is looking for a fresh start after selling its UK high street division earlier this year. | |
| The error means the group is now expecting a trading profit for North America of about £25m for the year to August - a cut from the £55m initially forecast. | |
| As a result, the company lowered its outlook for annual pre-tax profits to around £110m. | |
| The company has asked accountancy firm Deloitte to conduct a review into the blunder. WH Smith said it will provide an update on this review alongside its full-year results. | The company has asked accountancy firm Deloitte to conduct a review into the blunder. WH Smith said it will provide an update on this review alongside its full-year results. |
| 'Investors will be sobbing' | 'Investors will be sobbing' |
| AJ Bell investment analyst Dan Coatsworth said the error was "nothing short of a disaster". | AJ Bell investment analyst Dan Coatsworth said the error was "nothing short of a disaster". |
| He said North America is crucial to WH Smith's growth ambitions, and "the loose thread of an accounting error in this part of the group" will cause concern about further problems. | He said North America is crucial to WH Smith's growth ambitions, and "the loose thread of an accounting error in this part of the group" will cause concern about further problems. |
| "Investors will be sobbing into their cornflakes on the news," he said. | |
| WH Smith, which is London-listed, sold its High Street arm to Hobbycraft owner Modella Capital in June. | WH Smith, which is London-listed, sold its High Street arm to Hobbycraft owner Modella Capital in June. |
| As part of the deal, the WH Smith name disappeared from British high streets and was replaced by brand TGJones. | As part of the deal, the WH Smith name disappeared from British high streets and was replaced by brand TGJones. |
| Meanwhile, WH Smith now trades exclusively as a travel retailer based mainly at airports, railway stations, hospitals, and service stations around the world. | Meanwhile, WH Smith now trades exclusively as a travel retailer based mainly at airports, railway stations, hospitals, and service stations around the world. |
| Mr Coatsworth said these shops "benefit from a captive audience allowing the company to generate strong margins". | Mr Coatsworth said these shops "benefit from a captive audience allowing the company to generate strong margins". |
| "However, the US news has tarnished what WH Smith would have hoped could be a fresh start for the business." | "However, the US news has tarnished what WH Smith would have hoped could be a fresh start for the business." |
| 'Not a good look' | 'Not a good look' |
| Susannah Streeter, head of money and markets at Hargreaves Lansdown, said shareholders were "reeling" from the error. | Susannah Streeter, head of money and markets at Hargreaves Lansdown, said shareholders were "reeling" from the error. |
| "Getting it so wrong is not a good look and affects the reputation of the company." | |
| Retail analyst Catherine Shuttleworth said WH Smith's sale of its high-street retail business was largely predicated on its potential for North American growth, but the company faces stiff competition from chains like Walmart. | Retail analyst Catherine Shuttleworth said WH Smith's sale of its high-street retail business was largely predicated on its potential for North American growth, but the company faces stiff competition from chains like Walmart. |
| "Just buying and selling isn't enough for high-street chains anymore," she added. | "Just buying and selling isn't enough for high-street chains anymore," she added. |
| "A lot of their money is now made from working with retailers, paying for listings for their products to be seen in stores." | "A lot of their money is now made from working with retailers, paying for listings for their products to be seen in stores." |