WH Smith reported its worst financial performance in company history, posting a full-year loss of £128 million, raising doubts about the sustainability of its dividend. The retailer's ongoing struggles in the UK high street have intensified investor concerns.
- WH Smith reported a £128 million full-year loss for fiscal year 2024, its worst on record.
- The company’s net debt reached £146 million, with cash reserves of £41 million.
- Dividend payout of 10.2 pence per share is under review due to financial constraints.
- UK retail segment sales declined 12% year-on-year despite online growth of 3%.
- Share price dropped 20% following the results announcement.
- Over 1,200 non-essential UK retail stores closed in 2024, impacting foot traffic.
WH Smith has entered a period of significant financial strain, recording a full-year loss of £128 million for the fiscal year ending October 2024—the largest deficit in the company’s recorded history. This marks a stark reversal from the £23 million profit reported just two years prior, underscoring the deepening challenges within the UK retail sector. The company cited declining footfall, persistent inflationary pressures, and a continued shift toward online shopping as key drivers behind the downturn. The financial results have cast serious doubt on WH Smith’s ability to maintain its annual dividend payout of 10.2 pence per share, which has been a longstanding feature of its shareholder returns. With a cash position of £41 million at year-end and £146 million in net debt, the company’s liquidity comes under scrutiny. Analysts note that sustaining the dividend would require either significant cost rationalization or access to external financing, both of which carry risks in a high-interest-rate environment. The company’s UK retail segment, which accounts for over 80% of revenue, saw sales decline by 12% year-on-year, while online sales grew only 3% despite increased digital investment. The performance has led to a 20% drop in share price since the results were announced, with institutional investors signaling increased caution. The board has not yet confirmed whether the dividend will be maintained, but market signals suggest it is under threat. Retail analysts point to broader sector-wide issues, including the closure of 1,200 non-essential stores across the UK in 2024 and rising energy costs, which have disproportionately affected brick-and-mortar retailers. WH Smith’s performance reflects a sector in transition, where survival increasingly hinges on digital adaptation and operational efficiency.