WH Smith buyers urged to again bungling auditor

Embattled retail giant WH Smith is recommending investors back the re-election of its auditor despite it presiding over an accounting blunder that wiped millions off its share price.

In a notice quietly published on Christmas Eve, the FTSE 250 chain said its board of directors would ‘unanimously recommend’ reappointing accounting giant PwC at the annual shareholder meeting next month.

That came despite PwC failing to spot a blunder in WH Smith’s numbers that resulted in the company overstating the profits it had made from its US business by £30 million, after discovering the early recognition of supplier income.

It meant earnings that should have been allocated to later years were being taken as soon as a deal was done.

The shares plunged more than 40 per cent when the blunder came to light and the company was forced to delay its annual results from November to December. Boss Carl Cowling also quit following the scandal.

The recommendation to reappoint PwC came as WH Smith said it was seeking to claw back more than £1.5 million in bonuses and stock awards from both Cowling and its former chief financial officer Robert Moorhead, who stepped down in November 2024.

In its annual report, WH Smith said it had overpaid Cowling £516,000 in cash bonuses alongside 60,182 shares worth £384,563 at the firm’s current share price.

Moorhead, meanwhile, was deemed to have been overpaid a cash bonus of £372,000 alongside 43,739 shares worth £279,492.

WH Smith also said that following the emergence of the accounting error, it no longer considered Moorhead ‘a good leaver’ for the purpose of any share awards he had not yet received. The company’s shares are still trading around 43 per cent lower than they were before the scandal erupted.