WH Smith delays results to give auditors more time

(Sharecast News) - WH Smith said it would delay publication of its annual results to give auditors more time to finish their work in the wake of an accounting error that wiped almost £600m from the company's stock market value and led to the departure of chief executive Carl Cowling. The newspaper, books and stationery chain cut forecasts in August and started an independent review led by Deloitte after it discovered an accounting blunder at its North American arm overstated profits by as much as £50m.

It now expects to publish the accounts on December 19 - three days later than previously expected.

Headline trading profit guidance for North America was cut to a range of £5m - £15m, down from the revised expectation of around £25m announced in August and previous market expectations of £55m due to problems with the way the company had recognised payments from suppliers when they ran promotions or discounts to help boost sales.

The move saw £600m slashed from the company's value as its share price plunged 42%.

"Whilst the issues identified in the Deloitte review arose in our North American division, I recognise the seriousness of this situation and as group CEO feel it is only right that I step down from my position," Cowling said in a statement last month.

WH Smith's chair Annette Court said the company recognised "the importance of strengthening controls, governance and reporting procedures across the group."

"Our priority now is to rebuild trust and credibility and to improve the performance and profitability of our North America division. We are confident that the actions we have taken and will continue to implement over the months ahead will ensure a strong foundation for the business going forward."

Reporting by Frank Prenesti for Sharecast.com