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Annual Report and Accounts 2024
The global
travel retailer
WH Smith PLC is a leading global travel retailer for travel
essentials with a smaller business on the UK high street.
At the heart of our business are our people, customers and
partners. We aim to deliver our vision through our strategic
priorities and our forensic approach to retailing, and by
constantly innovating, expanding globally, improving our
profitability and delivering sustainable returns.
Financial and operational highlights
Revenue
£1.9bn
Group profit before tax
£106m
Headline Group profit before
taxandnon‑underlying items
1
£166m
Headline diluted earnings per share
beforenon‑underlying items
1
89.3p
Dividend per share
2
33.6p
Total number of stores
1,791
1 Alternative performance measure described and explained in the Glossary on page 173
2 Includes proposed final dividend of 22.6p. Subject to shareholder approval
WH Smith PLC is listed on the London Stock Exchange (“SMWH”) and is included in the FTSE 250 Index. WHSmith reaches customers
online via its digital channels: whsmith.co.uk, funkypigeon.com and cultpens.com.
In this report
Strategic report
Group Chief Executive’s statement 3
Our global travel business 4
Business model 6
Chair’s statement 9
Q&A with Group Chief Executive Carl Cowling 10
Key market drivers 12
Our strategy 14
Key performance indicators 16
Review of operations – Travel 19
Review of operations – High Street 24
Group outlook 24
Financial review 26
Section 172(1) statement 33
Sustainability review 40
– TCFD reporting 44
Non-financial and sustainability
information statement
58
Principal risks and uncertainties 59
– Viability statement 64
Corporate governance
Directors’ biographies 66
Corporate governance report 68
– Audit Committee report 76
– Nominations Committee report 80
– ESG Committee report 82
Directors’ remuneration report 85
Directors’ report 110
Statement of directors’ responsibilities 113
Financial statements
Independent auditors’ report to the members
of WH Smith PLC
114
Group income statement 121
Group statement of comprehensive income 122
Group balance sheet 123
Group cash flow statement 124
Group statement of changes in equity 125
Notes to the financial statements 126
Company balance sheet 168
Company statement of changes in equity 168
Notes to the Company financial statements 169
Additional information
Glossary 173
Information for shareholders 182
Destination:
Birmingham
p13
Destination:
Smith’s Family Kitchen
p18
Destination:
North America
p23
Destination:
Dublin
p25
linkedin.com/company/whsmithyoutube.com/WHSmith
@whsmithofficial@WHSmith
Disclaimer
This Annual report has been prepared for, and only for, the members of
the Company, as a body, and no other persons. The Company, its directors,
employees, agents or advisers do not accept or assume responsibility to
any other person to whom this document is shown or into whose hands it
may come and any such responsibility or liability is expressly disclaimed.
By their nature, the statements concerning the risks and uncertainties facing
the Group in this Annual report involve uncertainty since future events and
circumstances can cause results and developments to differ materially from
those anticipated. The forward-looking statements reflect knowledge and
information available at the date of preparation of this Annual report and
the Company undertakes no obligation to update these forward-looking
statements. Nothing in this Annual report should be construed as a
profit forecast.
Find out more about WHSmith at: whsmithplc.co.uk
Our communities
p32
WH Smith PLC Annual Report and Accounts 2024
1
“At WHSmith,
our purposeis
simple: to make
every one of life’s
journeysbetter.”
Carl Cowling
Group Chief Executive
2
WH Smith PLC Annual Report and Accounts 2024
Strategic report
Supporting the many journeys of our
colleagues, customers and shareholders
around the globe is our top priority.
Today,we serve customers across
32 countries and our team of 14,000
colleagues go above and beyond every
day to ensure our customers’ journeys
areas important as their final destination.
We operate in fast growing markets, and we have
ambitious goals. This means that we are constantly
innovating, while focusing on operational excellence
and our customers’ needs. Whether our customers are
visiting our stores while travelling through an airport in
the UK or overseas, in a hospital or a railway station, or
on their local high street, we are there for every journey.
This has been key since the Company was founded in
1792, and since we opened our first Travel store over 175
years ago. We’re extremely proud of our heritage, and
we’re even more proud of the global travel retailer we have
become today.
This year, the travel retail market was set to pass a
significant milestone, with passenger numbers, thekey
metric of the industry, exceeding 2019 levels for the
first time. Supporting this, many UK travel hubs and
airports consistently reported record passenger numbers
throughout the year. That said, with inflation and cost-
of-living pressures still at the forefront of mind for many,
customers continued to prioritise quality, convenience
andvalue, particularly in fastpaced travel locations,
andour team responded quickly.
During the year, we delivered a strong performance with
Headline Group profit before tax and non-underlying
items
1
up 16 per cent to £166m and Group revenue up
seven per cent on last year to £1.9bn.
A key highlight saw us further develop our one-stop-shop
format in Travel UK, our largest division, providing customers
with a bespoke customer experience, encompassing
everything they would expect from WHSmith, as well as
a broader and improved product range, including health
and beauty, tech, food to go and coffee. As part of this
development, we launched our first food to go range,
Smith’s Family Kitchen, comprising over 30 high-quality,
great value products, which have been well received
by customers. This is one of many examples of how we
continue to successfully execute our strategy and ensure
WHSmith is the go-to retail destination customers turn
toon their journeys.
North America is a key area of focus for the Group, and we
see significant opportunities to grow this business further.
This division will become an increasingly significant part
of the Group and is now our second largest division in
profit terms, after Travel UK. During the year, we opened
40 stores
2
in this market, as well as growing our future
pipeline by winning significant tenders, including more
recently a further 24 new store wins across major US
airports. As the largest travel retail market in the world,
we are incredibly excited about the future for WHSmith
North America.
In our Rest of the World division, we opened 52 stores
2
in
the year, including entering Hungary, a new market for
WHSmith. The fast pace of global new store openings
reflects the scalability and strength of our model, and the
expert understanding our teams have of customer needs
in international travel environments.
Our UK High Street business continued to deliver its
strategy of managing space to maximise returns and
maintaining a flexible cost structure. As part of this space
management, we opened 30 Toys “R” Us shop-in-shops
in the second half of the financial year, and have agreed
afurther 37 to open ahead of Christmas 2024.
It has been a very busy year across the Group and none
of this would be possible without the ongoing support
and hard work of all our colleagues. Our colleagues are
our top priority, and working with our colleague-led
networks, weare committed to promoting an open and
honest culture within the workplace where everyone can
be their true self. Championing the career journeys of our
people is also extremely important to us. We know that
by providing the right support, we can create a better
business for the future.
For our stakeholders, value creation remains central to
ourjourney and we will continue to execute our successful
strategy, while investing for the longer term where we
seeattractive opportunities for profitable growth.
Carl Cowling
Group Chief Executive
14 November 2024
Group Chief Executive’s statement
1 Alternative performance measure described and explained in the Glossary
onpage 173
2 See page 22 for a summary of store openings and closures in the year
WH Smith PLC Annual Report and Accounts 2024
3
Strategic report Corporate governance Financial statements Additional information
Our global travel business
Travel UK
Travel UK is the largest division in the Group
and operates stores in a wide range of locations,
including airports, the largest channel, as well as
hospitals, railway stations and motorway service
areas across the UK. Our strategy is to become
a one-stop-shop for travel essentials across
UK transport hubs, supporting customers on
their journeys.
Stores
594
Revenue
£795m
North America
North America is the second largest division in the
Group in profit terms with stores primarily in airports
across the continent, and a smaller Resorts business
located in Las Vegas. We operate a range of own-
brand and partner store formats offering a wide
variety of travel essentials to support customers’
journeys. As the largest travel retail market in the
world, we see significant potential for growth ahead.
Stores
341
Revenue
£401m
As a leading global travel
retailer, we employ c.14,000
colleagues to operate our
stores across the world to
serve our customers on their
journeys. We operate in fast
growing markets and our
business is growing at pace
through new store openings
and entering new markets.
106
New stores opened in 2024
1
c.14,000
colleagues
32
countries
1 See page 22 for further information on store openings and closures
4
WH Smith PLC Annual Report and Accounts 2024
Strategic report
High Street
Our High Street business serves customers across
major towns and cities in the UK and operates
whsmith.co.uk, funkypigeon.com and cultpens.com.
It also collaborates with partners including Post
Office Limited and Toys “R” Us.
Stores
500
Revenue
£452m
Rest of the World
We operate in a further 29 countries around the
world and ensure our stores deliver outstanding
customer service, trade successfully and deliver
strong returns. With a small market share currently,
the opportunities for growth are substantial
and we’re committed to our future as a global
travel retailer.
Stores
356
Revenue
£270m
WH Smith PLC Annual Report and Accounts 2024
5
Strategic report Corporate governance Financial statements Additional information
Format and store design
Through our suite of market-
leading, innovative retail store
formats, we are able to secure
premium, high footfall locations
forour stores.
Forensic approach
to retailing
We continuously evaluate our store
space and the performance of our
categories to ensure that we are
maximising returns.
Business model
Understanding customers
We understand and respond to the needs of
the travelling customer better than anyone else.
Landlord partners
Our market-leading store design, range breadth
and forensic approach to retailing allows us
to deliver superior economics and innovative
formats for landlord partners.
Our people
We have c.14,000 dedicated colleagues
across our stores, distribution centres
andsupport centres.
Store locations
We have a network of 1,291 Travel stores
in premium, high footfall locations in 32
countries, and 500 stores in mainly prime
locations on UK high streets.
Product range
We work hard to constantly innovate and
improve our ranges to ensure we offer a first
class proposition for our customers on the move.
Service offering
We provide a fast, convenient and easy
to navigate shopping experience for our
customers and work closely with a number
of strategic partners (such as M&S Simply
Food, Costa Coffee, Well Pharmacy, Post Office
Limited and Toys “R” Us).
Operational efficiency
We maintain an ongoing focus on efficiency,
productivity and cash generation in each
channel and territory.
For life’s journeys
How we create value:
Creating value for our stakeholders
Underpinned by:
A commitment to operating responsibly
You can read more about our approach to Environmental,
Social and Corporate Governance throughout the report.
Read more on page 40.
Our culture and values
You can read more about our colleagues, values
and diversity throughout the report.
Read more on page 53.
Our unique combination of strengths:
6
WH Smith PLC Annual Report and Accounts 2024
Strategic report
Product range
We work with our suppliers
and partners to bring together
a broad range of products and
services to meet the needs of
our customers.
Invest in growing
ourbusiness
The cash we generate as a Group
is utilised through our disciplined
approach to our capital to
maximise returns.
Creating value for:
Underpinned by:
A commitment to operating responsibly
You can read more about our approach to Environmental,
Social and Corporate Governance throughout the report.
Read more on page 40.
Our culture and values
You can read more about our colleagues, values
and diversity throughout the report.
Read more on page 53.
Our customers
We bring our customers the best products
and services for whichever of life’s journeys
they’re on.
Our people
We provide an inclusive and rewarding
environment for our colleagues to build
a career supported by our internal
colleague-led networks.
Our investors
We focus on providing consistent,
profitableand sustainable growth,
returning surplus cash to shareholders
through a clear dividend policy and
share buybacks.
Our landlord partners
We are proud of our strong landlord
partnerships and we work collaboratively
with them to ensure flexibility and that we
meet customer needs together.
Our suppliers and
business partners
We work collaboratively with our suppliers
and business partners to provide customers
with a wide range of products and to grow
our business and theirs.
Our community groups
We operate a responsible business that
contributes to the communities in which
we operate.
Read about how we engage with our
stakeholders on page 33.
WH Smith PLC Annual Report and Accounts 2024
7
Strategic report Corporate governance Financial statements Additional information
“I, along
withthe Board,
amexcitedabout
the future of
ourbusiness.”
Annette Court
Chair
8
WH Smith PLC Annual Report and Accounts 2024
Strategic report
As Chair of WHSmith, I am pleased to
update you on another year of strong
progress for the Group. The Group
delivered Headline profit before tax and
non‑underlying items
1
of £166m, up 16
per cent on the prior year and with total
revenue growth of seven per cent on
last year – a performance our colleagues
should be extremely proud of.
At WHSmith, the team is expert in serving customers
from a range of retail formats across international
locations, supporting their journeys, while at the same
time never losing sight of our objective to deliver
sustainable, profitable growth for our shareholders.
I take great pride in chairing a business which has a rich
heritage, while also retaining its energy, passionand
entrepreneurial spirit, and this has been evident in
everything that has been achieved this year.
We continue to invest in opportunities that position
us well for future growth by driving profitability and
increasing margins. During the year, we have opened
some significant new stores in airports across the globe
in both existing and new markets. I was delighted to
visit a number of our North American stores this year,
accompanied by the Board. Being able to see first-hand
how we adapt our retail disciplines from the UK to
our North American stores was insightful, and it was a
wonderful opportunity to meet many more colleagues.
We also continue to build our new store pipeline with
recent strategic tender wins including Dallas, Denver,
and Washington Dulles airports. The opportunities for
ourglobal travel business remain substantial.
In our UK High Street business, we have a successful
strategy focusing on costs, increasing margins and
generating cash. Our aim is to ensure that the profit and
cash flow of this business remain robust and sustainable.
During the year, we have focused on maximising our
returns on space, including the successful opening of
30Toys “R” Us shop-in-shops. These stores have been
verypositively received in the local community.
Together with everything that has been achieved in the
year, weremain acutely aware of how we operate as a
Group and how we fulfil our environmental, socialand
governance (“ESG”) responsibilities. We remain steadfast
in our commitment to achieving net zero by 2050 and
we are focused on ensuring our operations, and those
of our suppliers, are set up to achieve this. You can read
more about our sustainability strategy and highlights on
pages40 to 58.
Alongside our ESG commitments, our colleague-led
networks have played an important role to add structure
and clarity to ensure all our people are heard and supported.
During the year, it was a privilege to play a smallpart in
an all-colleague webinar hosted by the Gender Network,
focusing on women in business. Our colleagues are at the
heart of making this such a successful businessand there
is no doubt that without their ongoing commitment and
support, the Group would not be in the strong position it
is today. I would therefore like to take this opportunity to
thank each and every colleague for their hard work.
Our Board saw a number of changes this year. We were
delighted to welcome Situl Jobanputra as a non-executive
director, who joins with extensive financial and property
expertise. The Board also welcomed Helen Rose as a
non-executive director. Helen joins with significant
experience in retail and financial services. Marion Sears
stood down from the Board this year with our good wishes.
After 20 years’ service with WHSmith, and having
beenappointed to the Board in 2008, Robert Moorhead,
CFOand COO, will stand down from the Board in November.
Robert has been integral to the transformation of the
Group into the global travel retailer that it is today, andhe
leaves with our very best wishes. Max Izzard is a highly
capable successor, joining the Group from Burberry,
andMax will join the Board effective 1 December 2024.
Corporate governance remains an important area of
focus for the Board and underpins the sustainability
of our business and the achievement of our strategy.
A more detailed explanation of our approach to corporate
governance can be found in our corporate governance
report on pages 68 to 75.
Finally, this year we were pleased to announce a £50m
share buyback in September, in line with our capital
allocation policy, as well as proposing a final dividend
of 22.6p, ensuring our shareholders receive the rewards
of recent growth and benefit from the strength
ofour position.
Looking ahead, we have a successful strategy and a strong
leadership team in place. The Group has substantial
growth opportunities ahead and I, along with the Board,
am excited about the future of our business.
Annette Court
Chair
14 November 2024
Chair’s statement
Group Revenue
£1.9bn
Dividend per share
2
33.6p
1 Alternative performance measure described and explained in the Glossary onpage 173
2 Includes proposed final dividend of 22.6p. Subject to shareholder approval
WH Smith PLC Annual Report and Accounts 2024
9
Strategic report Corporate governance Financial statements Additional information
Q&A with Group Chief Executive CarlCowling
“We are well
positioned to
support our
customers’
journeys.”
Carl Cowling
Group Chief Executive
What have been the key highlights
of the 2024 financialyear?
It’s been another strong year of growth at WHSmith.
In 2024, total Group revenue increased seven per
cent to £1.9bn and Headline profit before tax and
non-underlying items
1
increased 16 per cent to
£166m, which is an excellent performance and
testament to the hard work of all our colleagues
across the business.
In Travel, the growth engine of our business,
each division performed strongly with Travel UK
delivering a record performance of 20 per cent
growth in Headline trading profit
1
to £122m.
We saw strong momentum across our Travel
markets, particularly over the peak summer trading
period, and we continued tobenefit from growing
passenger numbers.
The roll out of our one-stop-shop formats in Travel
UK, including most notably the opening this
year of our largest store across the UK estate in
Birmingham Airport, is proving successful and
has ensured we are well positioned to support
our customers’ journeys. We also see significant
opportunities to grow profitability further.
We maintained a fast pace in our new store opening
programme, opening over 100 new stores in
total, with the majority of store openings in North
America and in our Rest of the World division.
The growth opportunities, particularly in North
America, are substantial and we are confident
wecan continue to grow our market share.
I am particularly pleased that the strength of our
position and future prospects is reflected in the
Board’s proposal to pay a final dividend of 22.6p.
Alongside the £50m share buyback announced
in September, this demonstrates WHSmith’s
firm commitment to delivering long-term
shareholder value.
How does WHSmith continue
to stay relevant for today’s
travellingcustomers?
As a global travel retailer, we operate in fast growing
markets in more than 30 different countries around
the world. Customers trust us and they shop with
us for a fast, convenient experience.
During the year, we have made excellent progress
by focusing on broadening our categories and
improving our ranges. This includes focusing on
the four key product categories customers are
looking for while on the move: food to go and
drinks, health and beauty, tech accessories, and
books and magazines. Food now represents over
15 per cent of our business in Travel UK and we see
further opportunities to grow this category through
our Smith’s Family Kitchen brand. Outside of
the UK, we have recently signed a new franchise
agreement with Starbucks as we look to expand
our coffee offer in North America.
What excites me as a retailer, is that we have made
excellent progress with our category development
in the UK during the year, and we see great
opportunities to make meaningful improvements
to our ranges and customer offer overseas.
This focus not only results in us staying relevant with
our customers, but it drives average transaction
value and growth across each of our channels
and divisions enabling us to invest and maximise
every opportunity.
1 Alternative performance measure described and explained in the Glossary on page 173
10
WH Smith PLC Annual Report and Accounts 2024
Strategic report
What are your expectations for the
travel retail market and WHSmith
inthe year ahead?
This year, across the international travel market,
passenger numbers continued to grow and for the
first time were expected to exceed pre-pandemic
levels – a significant milestone. Analysis from the
International Air Transport Association (“IATA”)
suggests that passenger numbers will grow in
lowsingle digits each year over the medium term.
For WHSmith, our Travel business is well positioned
to continue to create value from the growth
in passenger numbers and the considerable
opportunities to win and open additional stores.
The pace of winning new business in Travel
has increased, notably in North America.
Recently,wehave won a further 24 new stores
across major US airports, including Dallas,
Denverand Washington Dulles airports.
Across the UK, North America and Rest of the
World we now have over 90 stores
1
won and
due to open, of which we expect c.60 to open in
the current financial year (net of closures c.40),
bringing our wide variety of travel retail formats
tomore customers.
What progress have you made in
the year on your journey to become
a more sustainablebusiness?
We have excellent sustainability credentials and
we continue to make good progress. We know
that our customers, colleagues and business
partners all want us to act in a responsible way
and that operating sustainably enables better
business performance.
We are one of the top performing speciality retailers
in Morningstar’s Sustainalytics ESG Benchmark
and, during the year, we were awarded a AAA from
MSCIESG ratings. In addition, we were included,
once again, in the Dow Jones World Sustainability
Index and awarded an A rating in CDP’s annual
climate leadership survey.
Our Scope 1 and 2 emissions continue to fall
and we have reached our target for 30 per cent
of our supply chain emissions to be covered
by science-based targets by the end of the
financial year.
Championing literacy remains at the heart of
everything we do, and we continue to work in
partnership with the National Literacy Trust.
Our financial assistance is providing direct early
years’ support to families in communities where
help is needed.
Where are the biggest
opportunities for growth for
WHSmith outside of the UK?
This year, we have continued to cement our status
as a global travel retailer and today our business
trades in 32 countries across the world. There is no
doubt in my mind that North America, the world’s
largest travel market, is our most exciting growth
opportunity and we see excellent prospects to
further grow our airport business.
Our business in North America continued to grow
at pace this year, with 40 new stores opened,
andwe are currently part of a large number of live
tenders, and we continue to grow the business at
pace. We have also, more recently, announced 24
new store wins across major US airports and we
have a new store pipeline of c.60 stores
1
won and
due to open primarily over the next two years.
Our analysis of the North American market shows
that there is a total of approximately 2,000 news
and gift, and speciality retail stores across the top
70 airports, of which we currently operate or have
won over 260 stores. This demonstrates the scale
ofopportunity in this market and, given our current
success rate, gives us confidence in growing our
market share.
While winning and opening new stores to build
market share remains a priority for the business,
we also see a lot of opportunity for improvement
in revenue and profitability in our existing stores
by applying our retail expertise, so I am particularly
excited about our future across the Atlantic.
1 Pipeline as at 14 November 2024
WH Smith PLC Annual Report and Accounts 2024
11
Strategic report Corporate governance Financial statements Additional information
Key market drivers
Travel
The key driver of the travel market is the number of
passengers travelling through the locations in which we
operate. We continue to see strong momentum across
all our markets as we benefit from growing passenger
numbers. Analysis from IATA suggests that passenger
numbers were expected to exceed pre-pandemic levels
for the first time in 2024, and this is set to continue to
grow in low single digits each year in the medium term,
particularly in countries with a population of growing
affluency and where physical distances support air travel,
such as the United States.
Our Travel stores around the world experience high
levels of seasonal footfall, driven by leisure travel over
thesummer months.
Air passenger numbers is a key growth driver and
footfall in airports is driven by global demand for flights.
During the year, passenger numbers have continued
to grow across our markets, primarily driven by further
demand for leisure travel. In the UK, many of our major
airport partners reported record passenger numbers
across the year. However, recovery continues to differ
around the world, especially where travel restrictions
were in place for a longer period. Where we have reliable
data on passenger trends, we see a correlation between
changes in passenger numbers and our revenue.
North America is the world’s largest travel retail market,
valued at $3.9bn
1
. Passenger data here suggests this
market will continue to grow.
Travel faces competition in its product categories
primarily from other retailers in air, rail, hospitals and
motorway service areas. Our markets are impacted by
macroeconomic conditions. Interest rates, inflation and
costs could impact passenger numbers, as could the
threat of conflict.
1 Source: 2019 ACI Factbook, increased by CPI
High Street
High Street’s performance is dependent upon overall
growth in consumer spending and the levels of footfall
on the UK high street. Our stores are mainly in prime
pitch locations. Similar to Travel, High Street is impacted
by macroeconomic trends including factors such as
levels of employment, interest rates and consumer
spending. Our stores experience higher levels of seasonal
footfall ahead of Christmas and our Back to School
trading periods.
Long-term Global Passenger Traffic Forecast (2010–2052)
2
2010
Passengers (billions)
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
28
26
24
22
20
18
16
14
12
10
8
6
4
2
0
COVID-19
Pandemic
2042
x2 2024 level
2052
x2.5 2024 level
2024
recover to
2019 level
5.3
5.7
6.0
6.4
6.8
7.2
7.7
8.3
8.8
9.2
3.6
4.6
6.6
8.7
9.7
10.6
11.3
11.9
12.4
12.9
13.4
13.9
15.4
15.9
14.4
14.9
17.0
17. 5
16.5
18.5
19.0
19.5
20.0
20.5
21.0
21.5
22.0
22.5
23.0
23.5
24.0
24.5
18.0
Calendar year
How we respond:
• Our market-leading store formats and breadth of
product range ensure we maximise the number
of passengers shopping in our stores
• Efficient use of store space enables us to offer
customers a breadth of travel essentials products
at a variety of price points to grow average
transaction values and drive returns
• Our operational expertise and agility allow us to
rapidly adapt to changing market conditions and
volatility in passenger numbers
• We remain extremely disciplined in focusing on
controlling costs
• We continue to ensure that we offer consumers
great quality products and value for money
through our promotional offering
How we respond:
• We continue to ensure we have profitable stores
in the right locations through regular review
of our store estate and keeping leases short
and flexible
• We maintain a forensic approach to store
space in order to maximise returns from our
core categories
2 Source: ACI (Airports Council International)
12
WH Smith PLC Annual Report and Accounts 2024
Strategic report
Destination
Birmingham
A world class one-stop-shop
fortravel essentials
Our store at Birmingham Airport became our largest airport store
on opening in November 2023, and is the most recent example
of our strategy to become a one-stop-shop for travel essentials.
By increasing our selling space by 60 per cent to incorporate
a wider product selection across key categories as well as a
Well Pharmacy, andenhancing the store design and customer
experience, thestore now consistently ranks among the top
performing stores forrevenue across the UK Travel estate.
New store revenue growth
+40%
Sq ft
6,000
Scan here to read more about this
storeopening.
Our strategy
A strong and focused strategy
We measure our performance against our strategy using our KPIs on pages 16 and 17.
Our
purpose
To make every
one of life’s
journeys better
Our
vision
To be the world’s
number one travel
essentials retailer
Space growth
• Opening new stores
• Winning new business
• New, better quality space
• Extending contracts
• Developing formats
and brands
106
new stores opened
during the year
90+
new store pipeline
1
Forensic approach
toretail
• Space management
• In-store execution
• Tight cost control
• Industry-leading returns
ATV growth
• Space management
• Refitting stores
• Range development
Good ATV
Performance
across our channels
Innovative
storeformats
• Format development
• Portfolio of world-class brands
• Forensic approach to
maximising sales density
Strategic priorities ProgressEnablers
Profit growth. Strong cash generation.
1 As at 14 November 2024
14
WH Smith PLC Annual Report and Accounts 2024
Strategic report
WH Smith Group
Travel
Cost and cash
management
• Flexible rent model
• Investing for growth
• Productivity and efficiencies
Investing
for future growth and
sustainable returns
£250m+
capital expenditure investment
over thelasttwoyears
High performing
teams
• Attract, retain and develop
the best talent
• Diverse and inclusive workplace
Category
development
• One-stop-shop travel
essentials format
• Improving ranges
Expanding
food to go, tech accessories,
health andbeauty
Low cost operations
• Efficient, nimble supply chain
• Simplification
• Focus on cost control
Maintain
profitability and
cash generation
£32m
Headline trading profit
2
£16m
of cost savings delivered
acrossthe business
Driving
sustainability
• Minimising our impact
on the planet
• Engaging our people
• Contributing
to communities
High Street
Disciplined capital allocation. Shareholder returns.
2 Alternative performance measure described and explained in the Glossary on page 173
WH Smith PLC Annual Report and Accounts 2024
15
Strategic report Corporate governance Financial statements Additional information
Financial
Key performance indicators
Our key performance indicators (“KPIs”) comprise a number of financial and non-financial metrics that enable
us to evaluate our performance against our strategic goals. Certain KPIs are Alternative performance measures,
whichare defined and explained on page 173. These measures are used by the Board as they provide additional
useful information on the underlying performance of the Group. Statutory equivalents are provided where relevant.
2
024
1,793
1,918
2
023
1,400
2
022
886
2
021
1,021
2
020
Group
£
1,918m
2
024
143
166
2
023
73
2
022
(55)
2
021
(69)
2
020
Headline Group profit/(loss) before tax
and non-underlying items
1
£
166m
2
024
164
189
2
023
89
2
022
(39)
2
021
(33)
2
020
Total Travel Headline trading profit/(loss)
1
£
189m
2
024
32
32
2
023
33
2
022
19
2
021
(10)
2
020
High Street Headline trading profit/(loss)
1
£
32m
2
024
1,324
1,466
2
023
927
2
022
401
2
021
553
2
020
Total Travel
£
1,466m
2
024
469
452
2
023
473
2
022
485
2
021
468
2
020
High Street
£
452m
Profit/(loss) (£m)
The below profit/(loss) measures are stated
on a pre-IFRS 16 basis.
Revenue (£m)
1 Alternative performance measure defined and explained in the Glossary on page 173
Strategic report
16
WH Smith PLC Annual Report and Accounts 2024
Financial
Non-Financial
2
024
20
53
2
023
41
2
022
14
2
021
(41)
2
020
£
53m
2
024
1,767
1,791
2
023
1,723
2
022
1,710
2
021
1,742
2
020
Group total number of stores
2
1,791
2
024
28.9
33.6
2
023
9.1
2
022
Nil
2
021
Nil
2
020
Dividend per share (p)
Total dividend per share
33.6p
2
024
80.3
89.3
2
023
41.7
2
022
(23.7)
2
021
(44.2)
2
020
Earnings per share (p)
Headlines diluted earnings/(loss)
per share before non-underlying items
1
89.3p
2
024
11,102
3,179
2
023
10,367
2
022
9,215
2
021
33,072
2
020
CO
2
emissions (tonnes of CO
2
e)
Global Scope 1 and 2 emissions
3,179
Free cash flow
1
(£m)
Free cash flow is defined as net cash inflow from
operating activities before the cash flow effect of
IFRS 16, non-underlying items, pension funding
and other non-cash items, less capital expenditure
(seepage 29).
1 Alternative performance measure defined and explained in the Glossary on page 173
2 See page 22 for summary of store openings and closures in the year
Strategic report Corporate governance Financial statements Additional information
WH Smith PLC Annual Report and Accounts 2024
17
Our first ever own-brand
foodrange
Destination
Launched in 2024, Smith’s Family Kitchen is a new high-quality
range of over 30 food to go products launched exclusively across
our Travel UK stores. The range and branding was developed
based on feedback from over one thousand customers, and was
created to ensure customers don’t have to sacrifice taste and
quality when travelling. The range has had a strong customer
response with sales trending ahead of forecast and the Chicken
& Bacon Caesar wrap, the New Yorker Salt Beef sandwich and
Chicken Shawarma wrap among the bestsellers.
Products in the new range
34
Meal deals sold every year
11 million
New
Scan here to watch more from our
Smith’s Family Kitchen launch.
“I am pleased to report
that our Travel business
has had another year of
excellent progress.”
Carl Cowling
Group Chief Executive
Performance review
I am pleased to report that our Travel business has had
another year of excellent progress. Total Travel revenue
was £1,466m (2023: £1,324m), up 11 per cent compared
to the previous year, generating a Total Travel Headline
trading profit
1
in the year of £189m (2023: £164m).
Trading profit
1
(IFRS 16)
Headline trading
profit
1
(pre-IFRS 16) Revenue
£m 2024 2023 2024 2023 2024 2023
Travel UK 126 101 122 102 795 709
North America 58 52 54 49 401 380
Rest of
theWorld
18 13 13 13 270 235
Total Travel 202 166 189 164 1,466 1,324
Review of operations
Total Travel revenue
£1,466m
(2023: £1,324m)
Total Travel Headline trading profit
1
£189m
(2023: £164m)
Total Travel revenue (year on year)
+11%
(2023: +43%)
In Travel, our initiatives position us well for future growth:
Space growth – Business development
and winning new business
Through building and managing relationships with
all our landlord partners, we look to win new space,
improvethe quality and amount of space, develop new
formats and extend contracts. We opened 106 stores in
the year (38 stores net of closures). We now have a store
pipeline of over 90 stores
2
(c.70 stores net of expected
closures), whichare due to open over the next three years.
Going forward, we expect to win, on average, around 50
to 60 stores a year and close on average c.20 stores as we
improve the quality of our space. There are significant
space growth opportunities across all our Travel markets.
ATV growth
We aim to grow ATV through our forensic analysis of
the return on our space, cross-category promotions,
merchandising, store layouts and store refits. The transition
of our stores to a one-stop-shop for travel essentials
is an important driver of this growth. During the year,
wehave continued to focus on re-engineering our ranges
and we continue to see good ATV performance across
our channels.
Category development
We do this by developing adjacent product categories
relevant for our customers, such as health and beauty
and tech ranges, and expanding existing categories such
as food. During the year, we launched a new food to go
brand, Smith’s Family Kitchen. We have also continued to
focus on identifying further opportunities where we can
reposition our traditional news, books and convenience
(“NBC”) format to a one-stop-shop travel essentials format.
Results from this format have been positive for both our
customers and our landlords.
Cost and cash management
We remain focused on cost efficiency and productivity,
for example, by continuing to invest in energy efficient
chillers across our stores, and investing in our supply chain
capabilities in North America to more effectively serve our
growing store estate on the East Coast of the US.
1 Alternative performance measure defined and explained in the Glossary on page 173
2 As at 14 November 2024
Travel
WH Smith PLC Annual Report and Accounts 2024
19
Strategic report Corporate governance Financial statements Additional information
Review of operations continued
Travel UK
Travel UK, our largest division, has delivered another year
of significant growth and we continue to have good
opportunities to grow this division further.
Total revenue in the year was £795m (2023: £709m) which,
together with improved margins, resulted in a Headline
trading profit
1
of £122m (2023: £102m).
Across all our channels we continue to focus on our key
growth drivers: space growth, increasing ATV and spend
per passenger, driving EBIT margins and benefiting from
the growth in passenger numbers. Momentum is strong
and we are seeing good results, with revenue growing
ahead of passenger numbers.
Air passenger numbers are a key growth driver, and they
are forecast to grow in the short and medium term. All our
channels in Travel UK have performed strongly during the
year with total revenue growth of 12 per cent versus last
year. We have started the new financial year well with all
three channels delivering good growth.
We are investing in our UK store portfolio, while also
identifying new and better quality space opportunities
across each of our channels. During the year, we have
opened 14 new stores, including three at airports, six in
hospitals and five in rail. We see this annual space growth
of around 10–15 new stores in Travel UK extending into the
medium term. We closed eight small and less well located
stores in the year. This year, we expect to open 10 to 15 new
stores in the UK and to close c.seven stores.
Revenue growth by key channels
Revenue (% change)
Year to 31 August 2024
Total vs 2023 LFL
1
vs 2023
Air 11% 11%
Hospitals 14% 12%
Rail 13% 11%
Total Travel UK 12% 10%
Air
Air, which is our largest channel in Travel UK, delivered a
strong performance with total revenue up 11 per cent and
like-for-like (“LFL”) revenue up 11 per cent on the prior year.
The development of our one-stop-shop for travel
essentials format in the UK is delivering strong
results,driving profitability, and highlighting significant
opportunities for the future. A good example is our flagship
store at Birmingham Airport, which has been trading for
12 months. We are very pleased with this store’s performance
and it is now one of our top performing stores in Travel UK,
with revenue increasing by 40 per cent as a result of this
new format.
This store has been designed using local landmarks
as inspiration for the look and feel of the store and
provides customers with a bespoke customer experience,
encompassing everything you would expect from
WHSmith, as well as a broader and improved product
range, including health and beauty, tech, food to go
and coffee. We have also, more recently, opened a Well
Pharmacy within the store completing our blended
essentials offer for customers on the move.
By widening our offer and creating a fast, convenient
shopping experience, customers are putting more items
in their baskets, which in turn increases our spend per
passenger and drives ATV.
This is a highly scalable format and not only applicable for
our larger stores in Air, but also our smaller stores, so we
see plenty of good opportunities for the future.
An example of category development to drive ATV is
where we have been focused on improving our food
offer for customers. Food has been a core category for
us for over ten years, now representing 15 per cent of
our revenue in Travel UK and we expect this to continue
to grow. Over the past two to three years, we have seen
a shift to more leisure passengers across Air and Rail.
In particular in Air, we have seen longer dwell times and,
as a result, we have worked with our airport partners
to provide an improved food and beverage offer for
customers who are looking for different, convenient,
quality food options.
To provide a broader and improved food offer, in June
we launched a new food to go range branded Smith’s
Family Kitchen ahead of our peak summer trading
period. Smith’s Family Kitchen is a new high-quality
range of over 30 products offering a broad array of
sandwiches, wrapsand salads, including a premium
range. Customer reaction has been positive and sales
areaheadof our expectations.
Hospitals
The hospital channel, our second largest channel in Travel
UK by revenue, continued its very strong growth with total
revenue up 14 per cent and LFL revenue up 12 per cent in
the year.
Our ongoing success in this channel illustrates our ability
to generate increased profitability from our stores by
improving our retail proposition. For example, tailoring our
product offer to the specific requirements of hospital staff,
patients and visitors by providing an increased range of
food, health and beauty and tech accessories.
During the second half of the year, and following the
success of our Smith’s Family Kitchen food launch,
weopened our first café under the Smith’s Kitchen brand
at Princess Anne Hospital in Southampton. While it is still
early days, this new format is performing in line with our
expectations and customer feedback has been positive.
We see plenty more opportunities for us to continue to
grow in this channel through our broad suite of brands
(WHSmith, Marks & Spencer Simply Food, Costa Coffee,
and our proprietary coffee brands). We opened six stores
during the year. We currently have 145 stores across over
100 hospitals and we can see scope for at least one of our
formats in up to 200 further hospitals.
1 Alternative performance measure defined and explained in the Glossary on page 173
20
WH Smith PLC Annual Report and Accounts 2024
Strategic report
Rail
Rail is also an attractive market. During the year,
wedelivered a strong performance with total revenue
up13 per cent and LFL revenue up 11 per cent.
We continue to invest in new formats and in new
opportunities in Rail, which meet landlord and customer
needs. This includes improving ranges to increase
spend per passenger and customer conversion and
driving ATV growth. For example, widening our tech
and health and beauty ranges across many of our stores
and, morerecently, refurbishing our mainline rail store
at Kings Cross station to provide an improved customer
proposition and experience.
During the year, we opened five new rail stores in Ealing
Broadway, London Euston, London Victoria and Milton
Keynes stations.
North America
North America, the world’s largest travel market, is our
most exciting growth opportunity where we see excellent
prospects for further growth in our airport business.
This division will continue to become an increasingly
significant part of the Group and is now our second
largest division in profit terms, after Travel UK.
During the year, we delivered a good performance with
40 new store openings, and passenger numbers in Air
continued to grow. We have increased revenue by nine
per cent on a constant currency basis, improved gross
margins and we continue to invest in our store estate.
Total revenue was £401m (2023: £380m), an increase of
six per cent. Headline trading profit
1
was up ten per cent
to£54m (2023: £49m).
Our North American business is subject to changes in
the GBP:USD exchange rates. A five cent change in this
rate results in a c.£3m movement in annual Headline
trading profit
1
.
Our Air business, the largest part of our North American
division, combines our Travel Essentials and InMotion
businesses. LFL revenue in Air was up one per cent
andtotal growth on a constant currency basis was up
14per cent.
Travel Essentials is the largest, fastest growing part of our
North American business and where we are investing the
majority of our capital. In Travel Essentials, we delivered a
strong performance with LFL revenue up seven per cent
in the year. We see further good opportunities to win and
open more Travel Essentials stores in Air, delivering good
returns, as we aim to grow our market share to around
20 per cent by 2028. By 2028, we would expect to be
operating around 500 stores and our overall Air business
to be around 85 per cent of the total North American
division, which will drive higher growth and profitability.
A key driver of our growth to date has been our ability
to win significant new tenders. We are currently part of
a large number of tenders and we continue to grow the
business at pace.
We opened a further 40 stores (net of closures, 14) in
the year increasing our market share and improving the
quality of our space. This included opening new stores at
Detroit, Chicago O’Hare and Washington Ronald Reagan
airports. Early results are good, and customer and landlord
feedback has been positive. During the year, we also
closed 26 stores, 16 of which were mainly in two hotels in
Las Vegas and consistent with our strategy of improving
the quality of our store estate.
We still have a very strong pipeline of new store openings
and our success to date in winning tenders demonstrates
why we remain confident in our ability to continue to win
market share.
We have recently won 24 new airport stores at Dallas,
Denver and Washington Dulles airports, and this includes
preferred bidder status at two major US airports. These wins
include two Starbucks stores following a new franchise
agreement. This is an exciting partnership as it opens up
plenty more opportunities across North America as we
expand our coffee offer.
We continue to make good progress and, as we build
scale, we are also investing in our supply chain capabilities,
for example, on the East Coast to more effectively
serve our growing store estate and this is generating
good efficiencies.
We now have a new store pipeline of c.60 stores primarily
opening over the next two years and currently, we anticipate
closing c.15 stores.
Revenue (% change)
Year to 31 August 2024
Total vs 2023
Total at
constant
currency
vs2023 LFL
1
vs 2023
Air 10% 14% 1%
Resorts (11)% (8)% (3)%
Total North America 6% 9% –%
Including the 40 store openings in the year, we now have
256 stores in Air (including 124 InMotion stores), 83 stores
in Resorts and two stores in Rail.
LFL revenue in our Travel Essentials business was up
seven per cent and we see further opportunities for
improvement in revenue and profitability by applying
ourretail expertise.
Our approach to growing our Air business in North
America is similar to the UK but it is at a much earlier
stage of development.
During the year, we have focused on improving the
quality and efficiency of our estate and driving profitability
by applying the retail disciplines from our UK stores.
Using data from stores that have been trading for an
extended period, we are actively analysing our space
to enhance our ranges, introduce new categories
and reviewing space allocation. While it takes time to
implement these changes in the US, they are delivering
encouraging early results.
1 Alternative performance measure defined and explained in the Glossary on page 173
WH Smith PLC Annual Report and Accounts 2024
21
Strategic report Corporate governance Financial statements Additional information
Some of the specific actions we are taking include:
increasing the space allocated to food and drinks across
our stores; rolling out chillers to our key stores; improving
presentation at the checkout for impulse purchases;
and we are introducing tech accessories into our Travel
Essentials stores.
We are making good progress and there are further
opportunities going forward as we focus on improving
the operational performance of this business and
margin enhancement.
The smaller part of our Air business is InMotion.
LFL revenue was down six per cent. Since acquisition in
2018, we have doubled the profit and improved margins
significantly by over 500 bps by working closely with our
suppliers, reducing operating costs and fully integrating
into our Air business. This integration was completed in
the year with all our stores now run by one operations
team. In addition, we have successfully used the brand
togrow our business overseas.
InMotion has an important role in the Group: it resonates
strongly with customers; it enables us to offer a market-
leading tech brand to landlords as part of tenders;
tomaintain strong global relationships with key brands
such as Apple and Bose; to offer a broader selection
of branded tech accessories in our Travel Essentials
stores; and to broaden our higher margin own brand
accessories ranges such as the Good Vibes range,
whichisperforming well.
With the lack of innovation in the headphone market,
wecontinue to actively shift the mix more towards higher
margin tech accessories. Given this dynamic, we don’t
anticipate any change in sales trends in InMotion in
the short term, however, this should result in improved
marginaccretion in the longer term.
In the Resorts business, which is centred around Las
Vegas, we saw total revenue on a constant currency
basis down eight per cent, reflecting the closure of 16
stores following primarily two hotel closures on the
Strip, which will also have an annualisation impact this
year. LFL revenue was down three per cent in the year,
reflecting a higher mix of conference attendees. We are
seeing a similar sales trend this year, which is a little softer
than we had anticipated, and we continue to rebalance
the space to reflect the greater mix of conference visitors.
Rest of the World (“ROW”)
Total revenue in ROW was up 18 per cent
on a constant
currency basis with LFL revenue up nine per cent.
Headline trading profit
1
was £13m (2023: £13m) reflecting
pre-opening costs and investment in new stores in the
first half. Headline trading profit
1
was up £3m on the
previous year in the second half.
Our approach is clear: to continue to enter new
countries using our three operating models of directly
run jointventure and franchise, building our presence
and, over time, leveraging our fixed cost base to grow
net margins.
Review of operations continued
We are in a strong position and we continue to make
good progress entering new markets. During the year,
we opened 52 new stores, including stores in Australia,
the UAE, Hungary and Spain, and including acquiring
three rail stores in Ireland. We closed 34 stores, of which
16were franchised.
In the second half of the year, we opened a new 2,900
square foot flagship store at Budapest Airport, a new
market for WHSmith. Budapest is a great example of how
we have localised the design to create bespoke stores
and we see further good opportunities to do this across
all markets.
We remain well positioned to benefit from further
opportunities as more space becomes available. We now
have 356 stores open, and a further 28 won, and yet to
open. Of the 356 stores open 146 are in Europe, 92 are in the
Middle East and India, and 118 are in Asia Pacific; and 51 per
cent are directly-run, eight per cent are joint venture and 41
per cent are franchise. During the current financial year, we
expect to open c.25 stores and close c.three stores.
Total Travel stores
Year ended 31 August 2024
No. of stores Travel UK
2
North
America ROW Total Travel
At 1 September 2023 588 327 338 1,253
Opened 14 40 52 106
Closed (8) (26) (34) (68)
Net openings 6 14 18 38
At 31 August 2024 594 341 356 1,291
Closures:
Relocations/loss-makers (8) (4) (6) (18)
Franchised – – (16) (16)
Resorts – hotel closures – (16) – (16)
Lease expiries – (6) (12) (18)
(8) (26) (34) (68)
During the year, we opened 106 stores in Travel. As at
31 August 2024, our global Travel business operated from
1,291 stores (2023: 1,253). As part of our strategy to improve
the quality of our space, we closed 68 stores in the
year. Eighteen closures were the result of relocations or
removing loss makers, 16 were mainly in two resort hotels,
which closed down in Las Vegas and, in our Rest of the
World division, 16 were small franchised stores. We saw
an above average number of closures in the year as we
would not expect further hotels to close in Las Vegas nor
such significant rationalisation of the franchise portfolio.
Outside of planned redevelopment, all of these closures
were actioned in line with our strategy. Our focus will
remain on opening more stores and better quality space.
As a result, we expect to see further store closures in the
current financial year of c.20 stores and to open a further
c.60 stores.
Excluding franchise stores, Travel occupies 1.2m square
feet (2023: 1.1m square feet).
1 Alternative performance measure defined and explained in the Glossary on page 173
2 Including one branch in the Isle of Man
22
WH Smith PLC Annual Report and Accounts 2024
Strategic report
1 Based on store numbers, including stores won and yet to open as at 14 November 2024
Destination
North America
Our most exciting
growthopportunity
North America is the largest travel retail market in the world
and we see excellent prospects to further grow our airport
business. We currently operate around 260 of the 2,000 plus
news, giftand speciality retail stores in North America’s top
70airports,demonstrating the significant opportunity ahead.
This year, we opened 40 stores in airports across North America,
including owned and third-party brands, with offers curated
towards the travelling North American customer.
New stores opened in
NorthAmerica in 2024
40
Current Air market share
1
14%
Scan here to read the latest news
fromour North America division.
High Street
Performance review
During the year, High Street delivered a performance in
line with our expectations with Headline trading profit
1
of
£32m (2023: £32m), and revenue of £452m (2023: £469m).
We managed the business tightly, keeping focused on
costs and cash generation. LFL revenue was down two per
cent on last year.
As we grow Travel, the High Street division will become a
smaller part of the overall Group. This division, which now
accounts for around 15 per cent of full year Group profit
from trading operations
1
, is profitable and cash generative.
Our strategy for our High Street business is clear and
consistent: to manage our space to maximise returns and
maintain a flexible cost structure. The strategy remains
as relevant today as it has ever been and focuses on
delivering robust and sustainable cash flows and profit.
We utilise our space to maximise returns in ways that are
sustainable over the longer term. We have extensive and
detailed space and range elasticity data for every store,
which we use to allocate space in categories. We continue
to manage our space in High Street to maximise returns
and maintain a flexible cost structure and it continues to
deliver good results.
As part of this space management, we successfully
opened 30 Toys “R” Us shop-in-shops in the second half of
the year and following their success, we are in the process
of opening a further 37 ahead of Christmas 2024.
Driving efficiencies remains a core part of our strategy
and we continue to focus on all areas of cost in the
business. During the year, we have delivered savings
of £16m and we are on track to deliver savings of £26m
over the next three years, of which £11m are planned
in the current financial year. These savings come from
right across the business, including rent savings at lease
renewal (on average, 35 per cent over the last 12 months),
which continue to be a significant proportion, as well as
marketing efficiencies and productivity gains from our
supply chain.
Over the years, we have actively looked to put as much
flexibility into our store leases as we can, and this leaves us
well positioned in the current environment where rents
are falling. The average lease length in our High Street
business, including where we are currently holding over
at lease end, is under two years. We only renew a lease
where we are confident of delivering economic value over
the life of that lease. We have c.470 leases due for renewal
over the next three years, including over 100 where we
are holding over and in negotiation with the landlord.
The store closure process is broadly cash neutral.
As at 31 August 2024, the High Street business operated
from 500 stores
2
(2023: 514), which occupy 2.4m square
feet (2023: 2.5m square feet). Fourteen stores were closed
in the year (2023: 13).
Funkypigeon.com delivered total revenue of £32m
(2023: £32m) and Headline EBITDA
1
of £6m (2023: £5m).
We continue to see opportunities to grow revenue and
profit over the medium term. This year will be a year of
investment with higher levels of spend on the platform
and brand than in 2024.
Group outlook
The Group has delivered an excellent performance
throughout the year, particularly over the key summer
trading period.
Our Travel divisions are trading well with a particularly
strong performance from our UK Travel business. We are
making excellent progress as we continue to benefit from
the rollout of our one-stop-shop format, which is creating
significant opportunities to further grow profitability.
We remain excited about the significant opportunity for
growth in North America. We are very pleased to have
recently won a further 24 new stores across major US
airports. Our store opening programme is on track and
we have a new store pipeline of c.60 stores already won
in North America. In addition, we continue to build scale
across our Rest of the World division, and we see plenty
more opportunities for growth.
Our High Street division delivered a good, profitable
performance and continues to generate cash allowing
usto invest across the Group.
At the Pre-close Trading Update on 11 September 2024,
the Group announced a £50m share buyback, which
reflects the strong ongoing cash flow, the receipt of the
pension surplus cash return
3
as well as the strength of our
balance sheet with leverage now within the target range.
In addition, the Board has proposed a final dividend
of 22.6p, reflecting current trading and the significant
medium and long-term prospects for our global
travel business.
The new financial year has started well. While there is
some economic uncertainty, we are confident that 2025
will be another year of good progress for the Group.
Carl Cowling
Group Chief Executive
14 November 2024
1 Alternative performance measure defined and explained in the Glossary on page 173
2 Including branches in Guernsey and the Isle of Man
3 See page 29 and Note 26 for further information
Headline trading profit
1
£32m
(2023: £32m)
Review of operations continued
24
WH Smith PLC Annual Report and Accounts 2024
Strategic report
Destination
Dublin
Expanding our travel
essentialsoffer in Dublin
For nearly 14 years, we’ve served customers on their journeys
in Dublin Airport. This year, we strengthened our presence in
Terminal 2 even further with the opening of a new WHSmith
Bookshop and a newly refurbished WHSmith flagship store,
opening alongside our InMotion store. From entertaining reads,
delicious meal deals or the latest must have tech, our three stores
together provide everything today’s travellers are looking for.
Years serving Dublin
Airportpassengers
14
Stores in Dublin Airport
13
Scan here to watch more from our
Dublin store openings.
“The Group has a
strong balance sheet,
has highly cash
generative trading
operations and
substantial liquidity.”
Robert Moorhead
Chief Financial Officer and
ChiefOperating Officer
Financial review
Group
Total Group revenue at £1,918m (2023: £1,793m) was up
seven per cent compared to the prior year.
Revenue (% change)
Year to 31 August 2024
Total
vs 2023
Total at
constant
currency
vs 2023
LFL
1
vs 2023
Travel UK 12% 12% 10%
North America 6% 9% –%
Rest of the World 15% 18% 9%
Total Travel 11% 12% 7%
High Street
2
(4)% (4)% (2)%
Group 7% 8% 5%
In Travel, we saw a strong performance with total Travel
revenue up 11 per cent (12 per cent on a constant currency
basis) to £1,466m and up seven per cent on a LFL basis.
This was driven by a strong performance from Travel UK
up 12 per cent on a total basis, North America up nine per
cent
3
, and Rest of the World (“ROW”) up 18 per cent
3
.
The trading momentum in Travel has continued into the
current financial year.
Our High Street business performed in line with
expectations, generating revenue of £452m down two per
cent on a LFL basis and four per cent on a total basis as we
closed 14 stores.
IFRS
Headline
(pre-IFRS 16)
1
£m 2024 2023 2024 2023
Travel UK trading profit
1
126 101 122 102
North America
tradingprofit
1
58 52 54 49
Rest of the World
tradingprofit
1
18 13 13 13
Total Travel trading profit
1
202 166 189 164
High Street trading profit
1
39 43 32 32
Group profit from
tradingoperations
1
241 209 221 196
Group profit before tax
and non-underlyingitems
1
161 137 166 143
Non-underlying items
1
(55) (26) (56) (13)
Non-underlying items –
Finance costs
1
– (1) (1) (2)
Group profit before tax 106 110 109 128
Total Travel delivered a Headline trading profit
1
in the year
of £189m (2023: £164m) up 15 per cent. Travel UK increased
significantly by £20m to £122m. North America increased
by £5m to £54m and ROW was in line with the prior year
at £13m, with a second half which delivered Headline
trading profit
1
up £3m on the prior year.
High Street delivered a Headline trading profit
1
of £32m
(2023: £32m), in line with expectations.
Headline Group profit from trading operations
1
for the
year was £221m (2023: £196m) with Headline Group profit
before tax and non-underlying items
1
up 16 per cent to
£166m (2023: £143m).
Group profit before tax, including non-underlying items
and on an IFRS 16 basis, was £106m (2023: £110m) in
the year.
1 Alternative performance measure defined and explained in the Glossary
onpage 173
2 Includes internet businesses
3 Constant currency
26
WH Smith PLC Annual Report and Accounts 2024
Strategic report
Net finance costs
IFRS
Headline
pre-IFRS 16
1
£m 2024 2023 2024 2023
Interest payable on bank loans
and overdrafts
13 12 13 12
Interest on convertible bonds 14 14 14 14
Interest on lease liabilities 25 19 – –
Net finance costs before
non-underlying items
52 45 27 26
Headline net finance costs before non-underlying
items
1
(pre-IFRS 16) for the year were £27m (2023: £26m).
This includes cash costs of £18m and £8m relating to the
non-cash debt accretion charge from the convertible
bond, which has a fixed coupon of 1.625 per cent.
Lease interest of £25m arises on lease liabilities recognised
under IFRS 16, bringing the total net finance costs before
non-underlying items on an IFRS 16 basis to £52m
(2023: £45m).
Tax
The effective tax rate
1
was 23 per cent (2023: 19 per cent)
on the profit for the year, reflecting the increase in
the UK corporation tax rate from 19 per cent to 25per
cent, witheffect from 1 April 2023. Net corporation tax
payments in the year were £18m (2023: £13m) after
usingall possible loss relief. Based on current legislation,
we expect the effective tax rate
1
in the current financial
year to be around 25 per cent.
Earnings per share
Calculation of Headline diluted earnings per share
1
Headline
pre-IFRS 16
1
2024 2023
Headline profit before tax
2
(£m) 166 143
Income tax expense
2
(£m) (39) (28)
Headline profit for the year
2
(£m) 127 115
Attributable to non-controlling
interests(£m)
(10) (9)
Headline profit for the year attributable to
equity holders of WH Smith PLC
2
(£m)
117 106
Weighted average shares in issue (diluted)
(no. of shares – millions)
131 132
Headline diluted EPS
2
(p) 89.3p 80.3p
The above measures are calculated on a pre-IFRS 16 basis.
Headline diluted EPS
1
was 89.3p (2023: 80.3p), an increase
of 11 per cent on the previous year.
EPS calculated on an IFRS 16 basis is provided in Note 9 to
the financial statements, and a reconciliation between the
IFRS 16 and pre-IFRS 16 earnings per share is provided in
Note A4 to the Glossary on page 173.
The diluted weighted average number of shares in issue
used in the calculation of Headline diluted EPS
1
assumes
that the convertible bond is not dilutive and reflects the
number of shares held by the ESOP Trust.
Profit attributable to non-controlling interests primarily
represents the joint venture partner share of profit in
relation to airport contracts in the USA. For the year ended
31 August 2024, the profit attributable to non-controlling
interests was £10m (2023: £9m).
1 Alternative performance measure defined and explained in the Glossary on page 173
2 Before non-underlying items
WH Smith PLC Annual Report and Accounts 2024
27
Strategic report Corporate governance Financial statements Additional information
Non-underlying items
1
Items which are not considered part of the normal
operating costs of the business, are non-recurring and are
exceptional because of their size, nature or incidence, are
treated as non-underlying items and disclosed separately.
Non-underlying items in the year in the Income
Statement and Statement of Comprehensive Income are
detailed in the table below.
IFRS
Headline
pre-IFRS 16
1
£m Ref. 2024 2023 2024 2023
Items included in the Income statement
Amortisation of acquired
intangibleassets
(1) (3) (3) (3) (3)
Impairment of
non-current assets
(2) (30) (19) (23) (4)
Provisions for
onerouscontracts
(3) (6) (3) (11) (5)
Transformation
programmes – supply
chain and IT
(4) (9) – (9) –
Costs associated
withpensions
(5) (2) (1) (2) (1)
IFRS 16 remeasurement
gains
(6) 3 – – –
Costs relating to M&A
activityand Group
legalentity structure
(7) (4) – (4) –
Re-platform of whsmith.
co.uk and other costs
(8) (4) – (4) –
Total non-underlying
items recognised in
the Income statement,
beforefinance costs
(55) (26) (56) (13)
Finance costs associated
with onerous contracts
(3) – – (1) (1)
Finance costs associated
withrefinancing
– (1) – (1)
Total non-underlying
items recognised in the
Income statement
(55) (27) (57) (15)
Items included in the Statement
ofcomprehensiveincome
Remeasurement of the
recoverability of the
retirement benefit surplus
(5) 87 – 87 –
Total non-underlying
items including
items recognised
in the Statement of
comprehensive income
32 (27) 30 (15)
(1) Amortisation of acquired intangibleassets
Non-cash amortisation of acquired intangible assets
of £3m (2023: £3m) primarily relate to the MRG and
InMotion brands.
(2) Impairment of non-current assets
The Group has carried out an assessment for indicators
of impairment of non-current assets across the store and
online portfolio.
Where an indicator of impairment has been identified,
an impairment review has been performed to compare
the value-in-use of cash generating units, based on
management’s assumptions regarding likely future
trading performance, anchored in the latest Board
approved budget and three-year plan, to the carrying
value of the cash-generating unit as at 31 August 2024.
As a result of this exercise, a non-cash charge of £23m
(2023: £4m) was recorded within non-underlying items for
impairment of non-current assets on a pre-IFRS 16 basis,
of which £18m (2023: £4m) relates to property, plantand
equipment and £5m (2023: £nil) relates to intangible
assets (primarily software). On an IFRS 16 basis, the total
impairment charge of £30m (2023: £19m) comprises
£15m property, plant and equipment (2023: £4m), £5m
intangible assets (2023: £nil) and £10m right-of-use assets
(2023: £15m).
Included in the impairment values above are impairments
of property, plant and equipment connected with Board
approved programmes relating to supply chain and
IT transformation, as well as the reconfiguration of the
Group’s online operations. Assets have been impaired
where their use is planned to be discontinued as a result
of these programmes.
(3) Provisions for onerous contracts
A charge of £11m (2023: £5m; IFRS 16 basis £6m; 2023: £3m)
has been recognised in the Income statement to provide
for the unavoidable costs of continuing to service a
number of non-cancellable supplier and lease contracts
where the space is vacant, a contract is loss-making or
currently not planned to be used for ongoing operations.
This provision will be utilised over the next two to four
financial years. The unwinding of the discount on
provisions for onerous contracts is treated as an imputed
interest charge, and has been recorded in non-underlying
finance costs.
(4) Transformation programmes
Costs of £9m have been classified as non-underlying in
relation to a number of Board-approved programmes
relating to supply chain (£4m) and IT transformation (£5m)
(Aug 2023: £nil).
The supply chain transformation programme includes
costs related to outsourcing the Group’s distribution
centres and core distribution network to a third party
(GXO) and costs of reconfiguration of the Group’s UK
distribution centres, in order to generate a more efficient
and productive supply chain to support the performance
and growth of the Group’s UK businesses. This project is
expected to conclude in 2025, incurring similar costs as
in 2024.
Financial review continued
1 Alternative performance measure defined and explained in the Glossary on page 173
28
WH Smith PLC Annual Report and Accounts 2024
Strategic report
The IT transformation programme includes costs relating
to upgrading core IT infrastructure, data migration and
investment in data security, store systems modernisation
and other significant IT projects. These strategic projects
will provide additional stability, longevity and operational
benefits. The implementation will cover several years and
we anticipate costs in 2025 to be similar to 2024.
These multi-year programmes are reported as
non-underlying items on the basis that they are
significant in quantum, relate to a Board-approved
programme and to aid comparability from one period
tothe next.
(5) Costs associated with pensions
Costs of £2m (2023: £1m) have been incurred relating to
professional fees associated with the buyout of WHSmith
Pension Trust, which was completed in September 2024
(see Note 26).
This resulted in the recognition of an £87m gain being
remeasurement of the recoverability of the retirement
benefit surplus, which is included in the Group’s
Statement of other comprehensive income.
Subsequent to the completion of the buyout,
on10 September the remaining surplus in the scheme
of£87m was transferred to the Group, comprising cash
of£75m and investments of £12m.
(6) IFRS 16 remeasurement gains
Non-underlying IFRS 16 remeasurement gains result
from the de-recognition of lease liabilities on exit from
certain locations in which right-of-use assets were
previously impaired.
(7) Costs relating to M&A activity and Group legal
entitystructure
Costs incurred during the year include c.£2m of
professional and legal fees in relation to a reorganisation
of the Group’s legal entity structure, c.£1m relating to
acquisition and integration costs of two small acquisitions
in Ireland and Australia, and c.£1m relating to final
integration costs of the North American businesses.
(8) Re-platform of whsmith.co.uk and other costs
Other non-underlying items recognised during the year
of £4m include some restructuring costs, stock write-offs
and IT costs in relation to the reconfiguration of the Group’s
online operations, and costs associated with the resolution
of a long running dispute.
A tax credit of £9m (2023: £5m) has been recognised in
relation to the above items (£9m pre-IFRS 16 (2023: £2m)).
Cash flow
Free cash flow
1
reconciliation
pre-IFRS 16
1
£m 2024 2023
Headline Group operating profit
before non-underlying items
1
193 169
Depreciation, amortisation and
impairment (pre-IFRS 16)
2
60 52
Non-cash items 14 14
Operating cash flow
1, 2
267 235
Capital expenditure
3
(129) (122)
Working capital (pre-IFRS 16)
2
(49) (64)
Net tax paid (18) (13)
Net finance costs paid (pre-IFRS 16) (18) (16)
Free cash flow
1
53 20
The Group generated an operating cash flow
1
of £267m in
the year (2023: £235m) demonstrating the cash generative
nature of the business. Capital expenditure was £129m
3
(2023: £122m) as we continued to invest in new stores,
ITand energy efficient chillers and other store equipment.
As expected, we had a working capital outflow of £49m
in the year (2023: outflow of £64m). This mainly relates
to investment in new stores, deferred rent payments in
Travel relating to the pandemic and some timing. Most of
the outflow was in the first half. This year, weexpect a
smaller outflow mainly relating to opening new stores.
In total, there was a free cash inflow in the year of £53m
(2023: £20m). This year, we would expect, subject to
investment opportunities, an increase in free cash
generation and Headline net debt
1
to be around £340m
atthe end of the year.
Net corporation tax payments in the period were £18m
(2023: £13m).
Capital expenditure was £129m
3
(2023: £122m), which
includes the additional spend from opening over 100
stores around the world.
£m 2024 2023
New stores and store development 67 58
Refurbished stores 19 20
Systems 15 19
Other 28 25
Total capital expenditure
3
129 122
1 Alternative performance measure defined and explained in the Glossary on page 173
2 Excludes cash flow impact of non-underlying items
3 Excluding capital expenditure related to non-underlying items of £2m
WH Smith PLC Annual Report and Accounts 2024
29
Strategic report Corporate governance Financial statements Additional information
Reconciliation of Headline net debt
1
Headline net debt
1
is presented on a pre-IFRS 16 basis.
See Note 18 of the Financial statements and Note A8 of
the Glossary for the impact of IFRS 16 on net debt.
As at 31 August 2024, the Group had Headline net debt
1
of £371m comprising convertible bonds of £310m and net
overdrafts of £61m (2023: £330m, convertible bonds of
£301m; £1m of finance lease liabilities; and net overdrafts
of£28m).
Headline
pre-IFRS 16
1
£m 2024 2023
Opening Headline net debt
1
(330) (296)
Free cash flow
1
53 20
Dividends paid (41) (22)
Non-underlying items
1
(28) (9)
Net purchase of own shares for
employee share schemes
(12) (8)
Other (13) (15)
Closing Headline net debt
1
(371) (330)
Net overdraft (61) (28)
Convertible bond (310) (301)
Finance leases (pre-IFRS 16) – (1)
Headline net debt
1
(371) (330)
In addition to the free cash flow, the Group had outflows
relating to the dividend of £41m (2023: £22m) being the
final dividend from 2023 and the interim dividend from
2024; £12m (2023: £8m) on own shares for the Group’s
share schemes; and £28m (2023: £9m) of non-underlying
items, which mainly relate to transformation and
restructuring projects, pensions, capital expenditure
incurred on previously impaired stores and spend relating
to prior year property provisions. Other includes non-cash
accretion on the convertible bond, and payments to
non-controlling interests.
On an IFRS 16 basis, net debt was £997m (2023: £895m),
which includes an additional £626m (2023: £565m) of
lease liabilities.
Financing and capital allocation
The Group has a strong balance sheet, has highly cash
generative trading operations and has substantial liquidity.
The Group has the following cash and committed facilities
as at 31 August 2024:
31 August
2024
Maturity
Cash and cash equivalents
2
£56m
Revolving Credit Facility
3
£400m June 2029
Convertible bonds £327m May 2026
The Group has a sustainability-linked revolving credit
facility (“RCF”) with a maturity date of 13 June 2029 and a
£327m convertible bond with a maturity of 7 May 2026,
which has a fixed coupon of 1.625 per cent.
As at 31 August 2024, Headline net debt
1
was £371m
(2023: £330m) and the Group has access to c.£313m of
liquidity. Leverage
1
at the year end was 1.4x Headline
EBITDA
1
(2023: 1.4x).
On 10 September 2024, following the buy-out of the
defined benefit pension Trust, the Group received a
cash refund of £75m
4
and an investment fund of £12m,
which will convert to cash over the next two years.
Proforma leverage at the year end, including these
proceeds, would have been c.1.1x within our target
rangeof0.75x to 1.25x.
The cash generative nature of the Group is complemented
by our disciplined approach to capital allocation. This has
been in place for many years and continues to drive our
decision making for utilising our cash:
• First, investing in our existing business and in new
opportunities where rates of return are ahead of the
cost of capital; this year, we expect capital expenditure
of c.£125m. The returns in Travel are good with return
on capital employed
1
(“ROCE”) in the UK at 36 per cent,
North America at 16 per cent and ROW at 23 per cent;
• Second, paying a dividend. We have a progressive
dividend policy with a target dividend cover, over time,
of 2.5x; the Board is proposing a full year dividend of
33.6p per share taking cover to 2.7x compared to a cover
of 2.8x in 2023;
• Third, undertaking attractive value-creating acquisitions
in strong and growing markets; and
• Fourth, returning surplus cash to shareholders via
share buybacks.
Financial review continued
1 Alternative performance measure defined and explained in the Glossary onpage 173
2 Cash and cash equivalents comprises cash on deposit of £30m and cash in transit of £26m
3 Draw down of £117m as at 31 August 2024
4 See page 31 and Notes 26 and 28 for a description of events after the balance sheet date
30
WH Smith PLC Annual Report and Accounts 2024
Strategic report
The Board has proposed a final dividend of 22.6p per
share in respect of the financial year ended 31 August
2024, which together with the interim dividend, gives a
full year dividend of 33.6p per share. This reflects the cash
generative nature of the business and our confidence in
the future prospects of the Group. Subject to shareholder
approval, the dividend will be paid on 6 February 2025
to shareholders registered at the close of business on
17 January 2025.
In addition, at the Pre-close Trading Update on
11 September 2024, the Group announced a £50m share
buyback, which reflects the strong ongoing cash flow,
the receipt of the pension fund buyout cash return,
aswell as the strength of our balance sheet with leverage
now within the target range. As at 13 November 2024,
theGroup had purchased 0.4m shares for cancellation
fortotal consideration of £6m.
Fixed charges cover
1
pre-IFRS 16
1
£m 2024 2023
Headline net finance costs before
non-underlying items
1
27 26
Headline net operating lease charges
(pre-IFRS 16)
1
(Note A12)
365 326
Total fixed charges 392 352
Headline profit before tax and
non-underlying items
1
166 143
Headline profit before tax,
non-underlying items and
fixedcharges
558 495
Fixed charges cover – times 1.4x 1.4x
Fixed charges, comprising property operating lease
charges and net finance costs, were covered 1.4
times (2023: 1.4times) by Headline profit before tax,
non-underlying items and fixed charges.
Return on capital employed
1
ROCE %
2024 2023
Travel UK 36% 32%
North America 16% 17%
Rest of the World 23% 28%
Total Travel 26% 25%
High Street 37% 47%
Group 24% 25%
Return on capital employed is calculated as the
Headline trading profit
1
as a percentage of operating
capital employed, and is stated on a pre-IFRS 16 basis.
Operating capital employed is calculated as the 12-month
average net assets, excluding net debt, retirementbenefit
surplus/obligations and net current and deferred
tax balances.
Balance sheet
The Group had Headline net assets excluding the
retirement benefit surplus of £469m, £20m higher than
last year reflecting the investment in new store openings
and exchange differences on translation of goodwill.
Under IFRS, the Group had net assets before the pension
surplus of £359m (2023: £340m).
IFRS
Headline
pre-IFRS 16
1
£m 2024 2023 2024 2023
Goodwill and other
intangibleassets
490 505 491 506
Property, plant and
equipment
316 270 308 263
Right-of-use assets 505 444 – –
Investments in joint ventures 2 2 2 2
1,313 1,221 801 771
Inventories 217 205 217 205
Payables less receivables (190) (219) (183) (216)
Working capital 27 (14) 34 (11)
Net current and deferred
taxasset
33 45 33 45
Provisions (17) (17) (28) (26)
Operating assets 1,356 1,235 840 779
Net debt (997) (895) (371) (330)
Net assets excluding
retirement benefit surplus
359 340 469 449
Retirement benefit surplus 87 – 87 –
Total net assets 446 340 556 449
Events after the balance sheet date
As at 13 November 2024, the Company has repurchased
0.4m of its own shares in the open market as part of the
Company’s share buyback programme for a consideration
of £6m.
Subsequent to the completion of the buyout of the
WHSmith Pension Trust, on 10 September 2024 the
remaining surplus in the scheme of £87m was transferred
to the Group, comprising cash of £75m and investments
of £12m.
Following the publication of an HMRC newsletter on
24 October 2024, the Group has become aware of a
difference in interpretation of the rules on the calculation
of the tax due between the Trustee and HMRC on the
surplus arising from the buy out of the defined benefit
pension scheme. As a result, the Group could be required
to reimburse the Trustee £6m. This has not been recorded
as a liability in the financial statements of the Group as at
31 August 2024.
Robert Moorhead
Chief Financial Officer and Chief Operating Officer
14 November 2024
1 Alternative performance measure defined and explained in the Glossary onpage 173
WH Smith PLC Annual Report and Accounts 2024
31
Strategic report Corporate governance Financial statements Additional information
Our communities
Helping children to develop
aloveof reading
WHSmith has a long-standing commitment to making a positive
impact on the planet, the lives of our people and the communities
in which we operate. This includes championing literacy, and this
year we supported the Gift a Gruffalo campaign alongside our
partner the National Literacy Trust (“NLT”). The campaign resulted in
20,000 copies of The Gruffalo going to disadvantaged communities
through the NLT’s community hubs, so that more children could
have the opportunity todiscover the magic of reading.
National Literacy Trust Hubs
17
Donated copies of the Gruffalo
20,000
Scan to learn more about the Gift
aGruffalo campaign.
Section 172(1) statement
Listening to our stakeholders
Stakeholder considerations play an important part in the Board’s discussions and
decision making to promote the success of the Company. Regular engagement
ensures that the Board is aware of stakeholder views and interests and enables it
tooperate in a balanced and responsible way. The Board carefully considers the
diverse needs and priorities of stakeholders in its decision making, while ensuring
WHSmith’s long-term success and reputation is promoted and preserved.
During the year ended 31 August 2024, the Board acted in
accordance with Section 172(1) of the Companies Act 2006,
with each director performing their duty to promote the
success of the Company for the benefit of its members as
a whole, and in doing so to have regard to the interests of
its stakeholders. Our interactions with key stakeholders
and the ways in which their interests have been taken
into account by the directors in their decision making
aresummarised on the following pages. Further examples
of how stakeholder views have been considered can be
found in our Corporate governance section on pages 66
to 113.
Our purpose:
To make every
one of life’s
journeys better
Our people
Customers
Investors
Landlord
partners
Community
groups
Suppliers
andbusiness
partners
WH Smith PLC Annual Report and Accounts 2024
33
Strategic report Corporate governance Financial statements Additional information
Section 172(1) statement continued
Our people
The success of WHSmith depends on the c.14,000 colleagues employed by
the Group. It is essential that they feel engaged, motivated and appreciated.
What matters to our people
• Feeling valued
• Being rewarded fairly
• Being treated with respect and dignity
• Having opportunities for personal growth
andcareer development
How did we engage?
• Our designated Non-Executive Director
for workforce engagement, Simon Emeny,
providedoversight for the Board
• Simon Emeny and Nicky Dulieu, Remuneration
Committee Chair, attended employee forums
to discuss, amongst other topics, the Group’s
approach to remuneration and how this aligns
towider Group pay policy
• The Chief People Officer updated the Board on
employee-related matters, including employee
engagement, staff retention rates, learning and
development, gender pay gap statistics, diversity
and inclusion, and workforce remuneration
• The Group Chief Executive and other senior
executives hosted regular webinars with support
centre colleagues to provide strategy and
performance updates and answer any questions
• Board members and senior executives attended
business meetings throughout the year, including
leadership meetings, trading updates and Risk
Committee meetings
• Our annual employee engagement survey was
followed up with meetings with employees to
gain further understanding
• Employees raised issues, questions and concerns
through direct mailboxes for senior executives
What were the key topics raised?
• Reward
• Development and growth for all of our colleagues
• Communications
• Work/life balance and wellbeing
• Culture and authenticity
How did we respond?
• The Board approved an action plan to address
actions from the employee survey and monitored
implementation throughout the year
• We relaunched the WHSmith Values based on
Customer Focus, Drive for Results, Accountability
and Valuing our People, incorporating them into
our people polices and processes
• We relaunched our learning and development
proposition giving colleagues access to a wider
range of development opportunities
• We increased our communication and
engagement, including more targeted
communications for different teams,
andcontinued with webinars and business
linespecific meetings with senior executives
• Management acted on feedback from our
employee networks, chaired by sponsors from
our Executive Committee, giving all colleagues
the opportunity to participate and influence
our broader diversity, equity and inclusion
(“DEI”)strategy
• Management undertook initiatives to increase
employee participation in the employee survey
Strategic report
34
WH Smith PLC Annual Report and Accounts 2024
Customers
Customer loyalty and enthusiasm for our retail proposition are critical to
our success. Understanding the needs of our customers ensures that we
provide the products and service that they expect.
What matters to our customers
• Availability and range of products
• Convenience
• Customer service
• Value for money
• Safe and responsibly sourced products
How did we engage?
• Board members visited stores in the UK, US,
Australia and Europe to assess and review the
customer experience and service standards
• The Managing Directors of each business unit
updated the Board on customer engagement,
market trends and commercial responses
• We used quantitative and qualitative analysis of
customer feedback through point of sale, online
surveys and focus groups, to provide additional
customer insights
• Store teams and customer service teams are in
constant dialogue with customers
• The Board received regular updates on customer
feedback and service standards, and ensured
systems were in place to comply with all relevant
product safety legislation
What were the key topics raised?
• Convenience of our offering
• Nature of store environments
• Customer service levels
• Product availability
• Pricing
How did we respond?
• The Board received strategy updates from
the Managing Directors of each business
unit and approved the customer-facing
commercial strategies
• We extended the roll-out of our one-stop-shop
formats for travel essentials providing food,
health and beauty, tech accessories, books and
magazines under one roof
• We continued to invest in our retail estate,
opening over 100 new stores during the year
• Each division explored ways to continue to
improve its service model to make the customer
experience as effortless and efficient as possible
• Customer feedback was communicated to the
relevant parts of the business for further action
where needed
Strategic report Corporate governance Financial statements Additional information
WH Smith PLC Annual Report and Accounts 2024
35
Section 172(1) statement continued
Investors
Our investors include individual and institutional shareholders, and providers
of debt and financial capital, such as banks and bondholders. We maintain
an active dialogue with our investors through an extensive investor
relations programme.
What matters to our investors
• Long-term value creation and
growth opportunities
• Capital allocation
• High-performing Board and Senior Executives
• High standards of business conduct and
good governance
• Transparency
How did we engage?
• Individual meetings, virtual presentations and
investor roadshows were hosted by members of
the Board
• The Board received reports and updates about
shareholder relations at each meeting to ensure
that Board members were informed of investors’
and proxy advisers’ views on strategy and
corporate governance
• Direct engagement for investors took place via
our investor relations team
• Annual report and interim trading updates with
investor presentations were provided by the
Group Chief Executive and CFO/COO. These were
interspersed by more regular Trading Updates
• Nicky Dulieu, as Chair of the Remuneration
Committee met with investors to discuss
remuneration policy
• An online portal, operated by our registrar,
Computershare, provided shareholders with
theability to manage their shareholdings
• At our Annual General Meeting, the Group Chief
Executive gave an update on how the Group is
performing and the Board answered questions
from shareholders
What were the key topics raised?
• Strategy for business growth
• Operational delivery
• More detailed information on the return
oncapital employed
• Corporate governance practices
• ESG strategy, targets and reporting
• Succession planning
How did we respond?
• The Board dedicated one of its meetings to
reviewing and approving the Company strategy
• Annette Court and Nicky Dulieu held meetings
with individual shareholders as part of an
investor roadshow
• The Board approved a share buyback programme
in line with the Company’s capital allocation policy
• Returns on capital employed by division
are disclosed
• We conducted investor interactions through
meetings with major institutional shareholders,
individual shareholder groups and financial
analysts, attended by directors and senior
management including our Chair, Group Chief
Executive and CFO/COO
• The ESG Committee incorporated investor
feedback into the ESG strategy. We also responded
to a number of requests from investors for a
briefing on our ESG priorities
Strategic report
36
WH Smith PLC Annual Report and Accounts 2024
Landlord partners
Our landlord partners own the buildings where our retail units are located.
They include airport operators, rail infrastructure partners, hospital trusts
and other retail estate landlords. Our business success is dependent on
retaining and winning new space and in order to do so, we must
understand what considerations are important to them.
What matters to our
landlordpartners
• Store formats and product ranges that are
appealing to their customers
• Customer service and satisfaction
• Value of revenue and rent paid per square metre
of retail space
• Effective operational implementation
• Compliance with their sustainability requirements
How did we engage?
• Board, executive and senior managers met
with landlords
• We held regular dialogue with landlord
representatives on performance levels in existing
stores and future opportunities
• As part of the tender submission process for new
contracts, we attended meetings, webinars and
conducted written engagement with landlords
• We participated in various landlord-hosted
working groups to collaborate on different
challenges on topics such as energy and waste
management and security
• We organised store visits for landlords to share
examples of latest retail formats
• Membership of appropriate trade bodies and
attendance at industry conferences and events
What were the key topics raised?
• Board approval for tenders in Australia, Ireland,
Spain, the UK and the USA
• Emerging global trends in retailing and
implications for store design and WHSmith
format development opportunities
• Sustainability requirements as part of tender
submissions and subsequent landlord
partner dialogue
• Commercial terms for lease agreements for
HighStreet stores
How did we respond?
• We opened over 100 new stores during the year
• We continued our focus on product ranges, stock
volumes and staffing levels to meet demand
from seasonal increases in airport footfall
• The Group invested in store design, shop fit outs
and product ranging
• We continued to develop a variety of format
options including extension of a one-stop-shop
for travel essentials, greater localisation of designs
and a platform for a variety of brands
• We confirmed ongoing dialogue with airport
operators on ways to work together to ensure that
we meet customer needs
Strategic report Corporate governance Financial statements Additional information
WH Smith PLC Annual Report and Accounts 2024
37
Section 172(1) statement continued
Community groups
The relationship we have with the communities where our stores and
distribution centres are located is key to the sustainability of our business.
We want to serve communities, in travel locations, hospitals or town
centres, providing jobs and helping local economies where we are based.
What matters to our
communitygroups
• A retail presence to attract other retailers to
the locality
• Availability of core products and services such
as convenience offerings in travel locations
and hospitals and Post Office services in High
Street stores
• Support for local and national causes
• High standards of corporate responsibility for
environmental and social issues
How did we engage?
• The Board’s ESG Committee met three times
during the financial year and received briefings
from the Sustainability Director on environmental
and social issues, including interactions with
community stakeholders
• Senior managers participated in sustainability-
focused working groups for trade organisations
such as the British Retail Consortium and Ethical
Trading Initiative (“ETI”)
• We held regular meetings with key
charity partners
• The Group participated in ESG surveys run by
organisations such as the disclosure organisation,
CDP and the ETI
• Stakeholders raised questions, views and concerns
through the sustainability@whsmith.co.uk
email address
What were the key topics raised?
• The need to maintain a vibrant retail offering
providing core services for local communities
• Support for community groups and charities local
to our stores
• The importance of support for pre-school children
in disadvantaged areas to address disparities in
levels of literacy
How did we respond?
• The ESG Committee reviewed and approved the
Sustainability Strategy, action plans and targets
for the year under our three pillars of Planet,
People and Community
• We continued our long-term partnerships with
the National Literacy Trust in the UK and Miracle
Flights in North America, and provided financial
and in-kind support to a number of other charities
and community causes
• We discussed possible partnerships with landlord
partners to look at ways to help local communities
• We improved our retail proposition for the specific
needs of hospital staff, visitors and patients by
providing an increased range of food, health and
beauty products and tech accessories
• We participated in industry working groups on
key environmental and social issues
Strategic report
38
WH Smith PLC Annual Report and Accounts 2024
Suppliers and businesspartners
We work closely with over 3,000 suppliers to provide products, goods not for
resale and services, which are critical for the smooth running of our business.
They range from large multi-national companies to small and medium-sized
enterprises. We have agreements with a number of partners to run
franchised stores on our behalf, and, this year transferred the running of our
UK-based distribution centres and logistics to a third-party provider, GXO.
What matters to our suppliers
andbusiness partners
• Fair trading and prompt payment in line with
agreed terms
• Opportunities for growth in their business
• A business partner that treats them fairly
• Responsible sourcing and high ethical standards
in the supply chain
How did we engage?
• Board overview of information on key suppliers
where material, for example, when approval of
major supplier or franchise contracts is required
• Overview by the Audit and ESG Committees of
labour and environmental standards in the supply
chain via quarterly and annual updates
• Direct engagement with suppliers and franchise
partners via individual meetings
• Supplier conferences for major groups of
suppliers such as trade suppliers for individual
businesses or geographies, or suppliers of
non-trade goods and services
• Programme of audit and supplier engagement
on labour standards
• Anonymised survey of workers in our own-brand
supply chain
• Discussions with potential third-party providers
tooperate logistics activities on our behalf
What were the key topics raised?
• Supplier and product innovation
• Supply chain operations to ensure right products
at the right time
• Strategies for science-based carbon targets and
net zero emission strategies
• Compliance requirements for
emerging legislation
How did we respond?
• The Board, through the Audit Committee,
received updates on the risk and resilience
ofoursupply chains
• We worked with business partners to provide
suppliers with customer insight data specific
toour stores
• The Board oversaw the smooth transition
of operations and people to GXO, our new
logistics provider
• We engaged with suppliers on human rights
due diligence in their supply chains and carbon
reduction targets and plans
Strategic report Corporate governance Financial statements Additional information
WH Smith PLC Annual Report and Accounts 2024
39
Sustainability review
Our journey to a more sustainable business
WHSmith has a long-standing commitment to operate in a responsible and
sustainable way. As a leading global travel retailer, our operations can impact
society and the wider environment. Our customers, colleagues and business
partners all want ustoact in the right way and we know that operating responsibly
enables better long-term business performance.
Our sustainability strategy is a key part of how we operate.
It concentrates on those areas, which are important for the
success of our business, and where we can bring positive
change. It was developed using stakeholder insights to
include those areas where our activities could have the
greatest potential impact on society and the environment.
The three main pillars of our sustainability strategy are
Planet, People and Communities and they provide the
framework for our activities. They are underpinned by a
strong foundation of responsible business principles and
practices to ensure we operate in the right way.
Responsible business policies and processes
Minimising our
impact on the planet
Net zero by 2050
Reduce packaging and waste
Zero deforestation in our
supply chain
Our Journey to a Sustainable Business
Creating value for all stakeholders
Engaging
our people
Protect health, safety
and wellbeing
Promote diversity, equity
and inclusion
Human rights and
supplier management
Contributing
tocommunities
Help children to develop a love
of reading
Make a positive impact
through fundraising,
donations and volunteering
40
WH Smith PLC Annual Report and Accounts 2024
Strategic report
Governance
Good ESG is central to successful risk management,
business development and delivery of the expectations of
shareholders. A robust and fully embedded framework of
clear governance structures, risk management processes
and internal controls are key to the delivery of our
sustainability commitments.
Our Board level ESG Committee has oversight of
our sustainability strategy, setting our ambition and
monitoring progress. The Committee is responsible for
understanding the potential impact and related risks
of ESG considerations on the business. It approves the
Company’s sustainability strategy, including policies,
objectives and a roadmap for delivery, and monitors
progress against agreed targets. The work of the
Committee is detailed on pages 82 to 84.
The ESG Committee receives input from the ESG Steering
Group, which is chaired by the Group Chief Executive
and has responsibility for leading the delivery of our
sustainability commitments.
The ESG Steering Group meets monthly to review progress
against our objectives. Each of the key components of
our strategy has a series of targets and an action plan
for implementation.
Individual issues are managed by the most appropriate
owners across the business. They work with the Group’s
Sustainability team, whose role is to advance the
various initiatives, co-ordinate implementation of the
sustainability programme and provide updates to the
keygovernance bodies.
Quarterly updates are also provided to the Group Audit
Committee on key ESG risk areas. As part of WHSmith’s
risk management processes (see pages 59 to 65),
detailedrisk registers are maintained by each business
and used to identify, manage and monitor risks at
quarterly Business Risk Committees.
The Business Risk Committees review the progress made
towards achieving our long-term sustainability targets
once a quarter, together with any emerging issues that
need to be considered.
We include ESG metrics and targets in our incentiveplans
for senior management (see pages 87 to 99) and as part
of our revolving credit facility. We receive a reduction in
interest rates from the lending banks if the targets are met.
Our governance framework
Board
Ultimate responsibility for all aspects of ESG, including strategy,
risk management and prioritisation of key issues
Audit Committee
Provides oversight of
risk management of
ESG, including internal
controls and external
reporting requirements
ESG Committee
Provides oversight of the
ESGstrategy and monitors progress
against objectives and targets
Remuneration
Committee
Ensures remuneration policies
and plans support ESG targets
Group Executive Committee
Defines and monitors business strategy and financial plans,
including those related to ESG
ESG Steering Group
Responsible for developing ESG action plans and
delivering progress against objectives and targets
Business Risk Committees
Responsible for implementing risk management
processes, including those relating to ESG
WH Smith PLC Annual Report and Accounts 2024
41
Strategic report Corporate governance Financial statements Additional information
Sustainability review continued
Materiality and our approach
toreporting
We undertake an annual materiality assessment to
determine the most important sustainability issues for our
business. This assessment is based on the extent to which
our activities could impact society and the environment,
and the extent to which a socio-economic, environmental
or ethical issue could impact our business financially.
Our materiality assessment incorporates the views of
internal and external stakeholders who provide input in a
number of different ways, which are set out in more detail
on pages 33 to 39. We use feedback from stakeholders to
identify the areas where they believe our activities could
have the biggest impact on society and the environment,
and the extent to which different issues could generate
significant risks or commercial opportunities for
our business.
Our ESG Committee, and the other governance bodies
listed above, regularly discuss new and existing themes
and issues that matter to our stakeholders. Priority issues
are addressed by programmes and action plans with
clear and measurable targets and committed resources.
Our ESG Steering Committee reviews our materiality
assessment annually and chooses what we measure
and include within our reporting based on priority
issues for our investors, customers, colleagues and other
stakeholders. Our reporting is informed by stock exchange
listing and disclosure rules.
We remain committed to transparent and balanced
sustainability reporting and commissioned SLR Consulting
to conduct a limited assurance engagement over selected
information, which is marked with an asterisk (
*
) in this
report. Further details are provided in our Sustainability
Addendum. All of our reporting is available on our website:
• This Annual Report and Accounts has a summary of the
progress against our sustainability strategy and targets
for the year, and meets our statutory obligations
• The accompanying Sustainability Addendum includes
our most recent materiality matrix, sustainability
performance data, third-party assurance statement
andcontent tables for key reporting standards
• Policies and position statements describe our
expectations and management approach for key topics
Benchmarks and external ratings
We engage with a number of external proxy agencies, benchmarking schemes and other membership organisations.
We are signatories of the UN Global Compact and we continue to rank highly in external benchmarks and indices,
including the following (as at 31 August 2024):
Benchmark External rating
For the fourth year, WHSmith has been included in the Dow Jones Sustainability
World Index, one of only nine speciality retailers to be included.
WHSmith received an ESG Risk Rating of 10.2 and was assessed by Sustainalytics
to be at low risk of experiencing material financial impacts from ESG factors.
This rating places us in the top position for speciality retailers.
WHSmith achieved a “C+” rating. This is supported by our “Prime” status, which is
given to companies that are perceived to be sustainability leaders in their industry.
WHSmith has a rating of AAA in the MSCI ESG Ratings assessment, the highest
rating possible.
DISCLOSURE I NSIGHT ACTION
WHSmith achieved a climate disclosurescore of “A – leadership”.
42
WH Smith PLC Annual Report and Accounts 2024
Strategic report
Minimising our impact on the planet
Aim Target (against a 2020 baseline) Progress
Climate
action
Net zero
emissions by2050
By 2030: reduce absolute Scope 1 and
2 emissions by 80 per cent from 2020
baseyear.
2024 emissions are 90
*
per cent lower
than2020.
By 2027: 75 per cent of suppliers by
emissions covering purchased goods
and services and up-stream transport
and distribution will have science-
basedtargets.
32
*
per cent of GHG emissions from
purchased goods and services and
up-stream transport and distribution are
from suppliers with science-based targets.
Reducing
waste
Reduce
environmental
impact from
packaging
andmaterials
By 2025: reduce waste material and
minimise own-brand plasticpackaging.
In 2024, we sent 14
*
tonnes (less than one
*
per cent) of waste to landfill compared to
400 tonnes (12 per cent) in 2020.
Protecting
natural
resources
Net zero
deforestation
By 2025: ensure forestry materials in
own-brand products and paper-based
non-trade goods come from recycled or
certified sources.
In 2024, 100
*
per cent of pulp, paper
and timber products purchased for sale
were from certified sources or recycled
materials. Further work is planned
to assess certification in relation to
non-tradegoods.
We engaged SLR Consulting to provide independent limited assurance of the data marked with an asterisk (*) in accordance with assurance standard ISAE 3000.
Fulldetails of the methodology and SLR Consulting’s assurance statement are available at whsmithplc.co.uk/sustainability
Climate action
WHSmith has a long history of reducing carbon
emissions through greater energy efficiency, investment
in technology and equipment, and switching to lower-
carbon sources of energy and fuel. We are committed to
continuing to play our part in helping to reduce emissions
to avoid the most severe consequences of climate change.
We have set a target to be net zero across our full value
chain by 2050, aligned to a 1.5˚C trajectory. Our carbon
transition plan includes a number of initiatives to
reduce energy and fuel use, switch more of our power
to renewable sources and take action to adapt to the
changing climate. We know that we will not be able to
reach net zero in isolation, and, therefore, are encouraging
customers, suppliers, business partners and policy makers
to join us on our journey.
More information on our climate strategy, including our
commitments, climate risks and opportunities, and action
plans for transitioning to net zero are included in our TCFD
disclosures on pages 44 to 52.
Reducing waste
Waste is not only damaging to the environment but
adds additional cost to our business. We are focused on
reducing excess materials and maximising recycling
wherever we can. Total waste volumes increased slightly
this year as a result of greater volumes of waste stock
being cleared for recycling.
We operate a recycling system which enables us to
recycle most forms of waste, including cardboard,
paper, plasticsand metals. Separate facilities for waste
segregation are available in our distribution centres and
support centres. Reusable skips transport goods between
our distribution centres and stores, rather than cardboard
boxes, whichneed recycling more frequently.
We work with our suppliers to minimise the quantities
of secondary packaging used to protect products being
transported to our stores, which helps to reduce the waste
being generated from our operational activity.
We regularly review the type and quantities of packaging
we use, including primary packaging for our own-brand
products and the secondary packaging used to protect
goods during transit and distribution. We seek to identify
opportunities to minimise packaging wherever possible
and use cardboard and forms of plastic that can be
recycled where these provide a better environmental
option than virgin and hard to recycle materials.
WH Smith PLC Annual Report and Accounts 2024
43
Strategic report Corporate governance Financial statements Additional information
Sustainability review continued
With the launch this year of Smith’s Family Kitchen, the
number of food lines that we sell continues to grow.
Our focus is on reducing food waste, which predominately
arises from chilled food that has reached its use-by date.
Our stock control systems use historical and predictive
data to order enough food to meet customer demand,
while ensuring that we only stock food that we expect
to sell. We also operate a discounting strategy in all of
our stores, with processes in place to reduce the price of
chilled food that is approaching, but has not yet exceeded,
its use-by date.
We partner with the food redistribution organisation Too
Good to Go, who provide an online application to connect
customers to any of our stores that have surplus unsold
food. This application allows customers to reserve a bag
of food, which is approaching its use-by date, to purchase
later in the day from a WHSmith store at a reduced price.
These actions all help to minimise the amount and
proportion of waste, which is sent for treatment and
disposal. This year more than 99
*
per cent (2023: 99
*
per
cent) of our waste was sent for recycling or to energy
fromwaste facilities rather than for disposal to landfill.
Operational waste (direct operations only)
2024 2023 2022
Total waste (tonnes) 3,253
*
3,105
*
3,247
*
Percentage diverted
fromlandfill (per cent)
99
*
99
*
99
*
We engaged SLR Consulting to provide independent limited assurance of the
data marked with an asterisk (*) in accordance with assurance standard ISAE
3000. Fulldetails of the methodology and SLR Consulting’s assurance statement
areavailable at whsmithplc.co.uk/sustainability
Protecting natural resources
Paper-based products are a core part of WHSmith’s
product offering and we are committed to minimising
theenvironmental impacts from the sourcing of any
paper, card or wood components for our products.
Our Sustainable Forests Policy sets out our standards and
requirements for our supply chain and includes a zero
deforestation policy for any WHSmith-branded products.
Our standards require that all paper, card and wood for
our own-brand products are sourced from legal and well
managed forests that have been certified to credible
certification standards such as FSC
®
or PEFC™ or from
verified recycled sources.
Suppliers must provide proof of Chain of Custody
certification and in line with the requirements of national
and international timber regulations, we carry out an
in-depth and rigorous assessment of supplier timber-
sourcing systems. We can demonstrate that 100
*
per
cent (2023: 100
*
per cent) of WHSmith-branded products
containing paper-based materials originate from certified
or recycled material.
We are currently updating our procedures and supplier
guidance to ensure we are ready for the introduction of
the EU Deforestation Regulation in 2024/25 when due
diligence processes will be extended to a wider range
ofproducts beyond our own brand.
Climate-related financial disclosures
Introduction
The Task Force on Climate-related Financial Disclosures
(“TCFD”) established a framework for understanding
and analysing climate-related risks and opportunities.
WHSmith recognises that climate change presents
a number of potential risks and opportunities for our
business. Our target is to be net zero across our value
chain by 2050.
We have considered our TCFD-related reporting
obligations under the UK’s Financial Conduct Authority
Listing Rules and in line with the requirements of
UK Listing Rule 6.6.6R(8), our disclosure of climate-
related financial information is consistent with the
Recommendations of the TCFD, recommended
disclosures and all-sector guidance. Our approach to
materiality for TCFD reporting is the same as for other
components of ESG and is set out on page 42.
Board oversight of climate risks
andopportunities
The Board has ultimate responsibility for ensuring
climate change is embedded into the Group’s strategy,
risk management, financial and business planning
processes. Climate considerations are taken into account
for performance monitoring and any decisions regarding
major financial approvals and acquisitions. The ESG,
Auditand Remuneration Committees of the Board
provide oversight of certain climate-related activities
andany issues of material significance are discussed as
they occur. The work of the Committees is detailed on
pages 82 to 84.
The Audit Committee has responsibility for ensuring
that the Group has identified climate risks and
opportunities, that those risks and opportunities have
been adequately assessed, and that appropriate risk
management, monitoring and mitigation plans are
in place. The Committee also oversees the Group’s
wider obligations in relation to non-financial reporting.
Climate-related matters are included in quarterly updates
from the Group Audit and Risk Director as part of the
Group’s wider risk management processes.
The ESG Committee has responsibility for ensuring the
Group has appropriate climate policies, action plans and
targets that are part of a wider sustainability strategy.
This includes the development of short, medium and
long-term goals and targets in relation to climate change,
development of a carbon transition plan and monitoring
progress. This year, the ESG Committee discussed climate
change in three meetings. The Committee received
dedicated briefings from the Sustainability Director
on current legislation and emerging developments in
relation to carbon and nature, and reviewed progress
against the Group’s carbon targets. Climate-related skills
and experience of individual Committee members are set
out on pages 82 to 84.
44
WH Smith PLC Annual Report and Accounts 2024
Strategic report
TCFD recommendations and
recommended disclosures
Disclosure
location
Governance
(a) Describe the Board’s oversight of climate-
related risks and opportunities
Page 44
(b) Describe management’s role in assessing
and managing climate-related risks
andopportunities
Page 45
Strategy
(a) Describe the climate-related risks
and opportunities the organisation
hasidentified over the short,
mediumand long term
Pages 46
to48
(b) Describe the impact of climate-
related risks and opportunities
on theorganisation’s businesses,
strategyand financial planning
Pages 47
to48
(c) Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-
related scenarios, including a 2°C
orlowerscenario
Pages 47
to48
Risk management
(a) Describe the organisation’s processes
for identifying and assessing climate-
relatedrisks
Page 45
(b) Describe the organisation’s processes
formanaging climate-related risks
Pages 46
to48
(c) Describe how processes for identifying,
assessing and managing climate-related
risks are integrated into the organisation’s
overall risk management
Pages 46
to47
Metrics and targets
(a) Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process
Page 49
(b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(“GHG”) emissions, and the related risks
Pages 51
to 52
(c) Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets
Page 52
The Remuneration Committee ensures that the Group’s
incentive plans are aligned with targets relating to climate
change. Climate-related performance indicators are
included in the Long-Term Incentive Plan awards as set
out on page 106.
Management’s role
The Group Chief Executive has the delegated authority
from the Board to manage WHSmith’s actions in relation
to the Group’s strategy and climate change. He is assisted
by a number of senior managers in the assessment and
management of climate-related matters.
• The Group Sustainability Director supports the Group
Chief Executive in progressing WHSmith’s net zero
transition strategy, including developing climate
scenarios, identifying climate risks and opportunities,
developing transition plans and embedding them into
business activities, and ensuring progress is appropriately
monitored. She is responsible for updating the Board
and the ESG Committee on climate-related matters,
including progress against the Group’s targets at least
three times a year.
• The Managing Directors of each division identify, monitor,
manage and mitigate climate risks and opportunities
associated with their activities. They are also responsible
for ensuring the delivery of plans to reduce emissions
and capitalise on carbon-related opportunities within
their businesses.
• The CFO/COO is responsible for monitoring the effective
application of the Group’s processes for managing
climate risks. He is also responsible for providing
assurance over financial information and climate-
related disclosures.
There are a number of governance bodies and reporting
processes to ensure management is informed about
climate-related issues. The ESG Steering Group, chairedby
the Group Chief Executive, has responsibility for leading
the delivery of sustainability commitments including
those relating to climate change. It meets once per month
to review progress against targets, and this provides the
basis for a report to the ESG Committee three times per
year. The Business Risk Committees are responsible for
identifying and assessing climate risks and opportunities
and ensuring appropriate due diligence and mitigation.
They meet once per quarter and provide input to the Group
risk report to the Audit Committee four times per year.
Identifying and assessing risks
andopportunities
Our framework for identifying and assessing climate-
related risks is integrated into Group-wide processes for
risk identification and prioritisation (see pages 59 to 65).
We use the following processes to identify and assess
transition and physical risks and opportunities:
• Monitoring of changes in the external policy
environment, including existing and emerging
legislation, and government announcements;
• Observing market developments, such as technological
advances that may reduce our operating costs,
orchanges in consumer behaviour that may impact
sales of particular products or customer footfall in
certain locations; and
• Evaluating changes in our cost base related to
properties, logistics or supply of goods that may
belinked to climate-related impacts.
WH Smith PLC Annual Report and Accounts 2024
45
Strategic report Corporate governance Financial statements Additional information
Sustainability review continued
We maintain a register of climate risks and opportunities,
across short, medium and long-term time horizons.
These time horizons are defined as follows:
• Short-term – up to three years: we develop financial
plans and use them to manage expectations and
performance on a three-year cycle. We assess the
Group’s viability under the requirements of the UK
Corporate Governance Code over a three-year period
and our financial plans incorporate decarbonisation
measures required to meet our near-term targets and
address short-term risks.
• Medium-term – three to ten years: many of our
financial commitments, such as some store leases,
contractualagreements with landlord partners, andthe
useful economic life of our assets often exceed three
years. Medium-term climate risks are considered
in all investment decisions involving longer-term
commitments and many of our climate-related
opportunities are often materialised within this time.
• Long-term – beyond ten years: it is expected that the
product mix in our stores could look very different to
the current offering, addressing the societal changes
that will come with transitioning to a net zero world.
This timescale is beyond our financial planning and
investment period horizons, but we recognise that
longer-term risks may need to be incorporated into
ourfuture business strategy and planning.
Risks are assessed in relation to the severity of potential
business impact (on a scale from one to six) and the
likelihood of the business being impacted (low, medium
or high). This scoring is in line with all other risks included
in the Company’s risk register. Determination of the
severity of impact includes both financial and reputational
components, and other factors such as our ability to
respond to a particular risk. In assessing the likelihood,
we consider factors such as whether similar risks have
materialised in the past and our ability to mitigate
the risk. This allows us to identify the more significant
potential risks for more detailed financial assessment and
incorporation into the risk registers and summary risk
maps prepared by all business functions.
We consider Environment and Social Sustainability, which
includes climate-related issues, to be a principal risk based
on stakeholder expectations that we will conduct our
business in a responsible and sustainable way. Failing to
deliver our sustainability agenda could damage our
reputation, introduce higher costs and impact our ability
to meet our strategic objectives.
Scenario analysis
In 2022, in order to further assess and evaluate climate risk
and opportunities, we commissioned external consultants
to help us understand how our business could be affected
under two climate scenarios over short, medium and
long-term horizons. The findings remain relevant for
theyear ended 31 August 2024.
Current policies scenario
This scenario assumes only currently implemented
government policies are preserved. There is no reduction
in emissions and climate change accelerates to 2.5°C of
warming by 2050 and >4°C by 2100 bringing irreversible
change. This scenario provides an indication of potential
outcomes under business as usual. It involves little to no
transition risks in the early stages (as no additional action
is being taken), but results in irreversible and disruptive
physical risks.
Net zero 2050 scenario
This is an ambitious scenario that limits global warming
to 1.5°C by 2100 through stringent policy intervention
and innovation, reaching net zero emissions around
2050. It offers an indication of potential outcomes where
global warming is limited to current internationally
agreed levels. It involves more transition risks in the early
stages and physical risks are less extreme than under the
current policies scenario. It is only relevant to medium
and long-term time horizons because of the timescales
needed to implement.
Climate risks and opportunities
andtheirimpact on our business
The analysis helped us to estimate indicative financial
impacts from different climate risks under the two
scenarios. The table on pages 47 to 48 sets out the most
significant climate risks and opportunities for WHSmith,
the potential impacts they may have on our business and
our resilience to respond. We have assessed transition
risks associated with societal changes in policies,
technologies, markets and stakeholder expectations and
physical risks arising from acute climate-related weather
events, or longer-term chronic changes to the climate.
Opportunities from mitigation and adaptation to climate
change are also included.
The impacts detailed in the table on pages 47 to 48 are
stated prior to mitigation or controls being in place and
are subject to uncertainties attributed to the underlying
scenario models, impact pathways and assumptions
made. They assume that our business activities remain
largely unchanged throughout and any increases in costs
are fully absorbed by WHSmith. The financial impacts
quoted are not forecasts but are based on the outputs
from the 2022 modelling derived from different data
inputs and plausible modelled scenarios, and are subject
to a wide range of uncertainties.
The financial implications of the risks and opportunities
identified are considered within the Group’s financial
planning processes. The modelling undertaken to
date has determined that the financial impacts are
not expected to be significant within our short-term
forecast period. Over the medium and longer term,
theresults of the scenario analysis have been considered
in the assessment of viability and goodwill impairment,
whereappropriate, but are not considered to be material.
We willcontinue to keep this assessment under review.
The results of our scenario analysis do not currently
identify any significant impact on our business model
over the time horizons assessed, and, therefore, no further
changes in strategy are required, beyond our current
activities to decarbonise our business in line with limiting
global temperature rises to 1.5°C.
Managing climate risks
andopportunities
Climate risks are managed in line with our overall risk
appetite to ensure appropriate responses are in place for
those risks. These responses may include accepting a risk
without any further action, mitigating or reducing the risk
46
WH Smith PLC Annual Report and Accounts 2024
Strategic report
with appropriate controls, transferring the risk, for example
to insurance providers, or stopping or modifying the
activity that gives rise to the risk. The decision as to which
response is appropriate depends on a number of factors,
including the size of the risk (in terms of impact and
likelihood), the level of resource that would be required
for different responses, the time frame over which a risk is
likely to materialise and the extent to which the risk level
could be reduced by a response. An integrated approach
ensures we manage climate risks within our overall risk
appetite over different time horizons.
Summary of climate-related risk and opportunities
Potential financial impact
1
Climate risk/opportunity and business impact
Short
term
Medium
term
Long
term Business resilience and strategic response
Increased energy and fuel prices from
changes in carbon taxes, geopolitical energy
policies and industry decarbonisation could
result in higher costs for operating buildings,
transportand purchase of goods. (Policy and
legal, andmarket risk.)
Geographies affected: global retail,
purchasingand distribution operations.
Current policies
We closely monitor any changes in legislation,
taxation policies and market dynamics.
Our procurement team seek to minimise the
price we pay for electricity and gas. We have
a balanced energy purchasing strategy to
mitigate price volatility. We continue to reduce
energy consumption and switch to low carbon
alternatives wherever feasible. Future cost
projections for energy and fuel are included in
ourfinancial plans.
Metrics used: Electricity, gas and fuel consumption
(page 49); and Energy and fuel pricing
(not disclosed).
Net zero 2050
N/A
Switching to lower carbon sources of power
and fuel could result in increased costs. Inthe
UK, our Swindon distribution centre and
some of our High Street stores are heated
by natural gas. To meet net zero targets and
new building standards, we will need to invest
in gas replacement systems and electric
vehicles, which could incur additional costs.
(Technologyand Reputation risk.)
Geographies affected: global operations,
butparticularly UK.
Current policies
Capital expenditure on gas control systems has
reduced our reliance on natural gas. We continue
to invest in lower-carbon alternatives for heating
and air conditioning during store refits and
building upgrades. Both capital and operating
expenditure projections for energy and fuel are
included in our financial plans.
Metrics used: Scope 1, 2 and 3 emissions (pages
51 to 52); Electricity, gas and fuel consumption
(page 49); Renewable electricity pricing (not
disclosed); and Landlord partner commercial
terms (not disclosed).
Net zero 2050
Climate change is likely to result in chronic
changes in precipitation patterns with some
regions experiencing droughts and others
greater rainfall. These changes could affect the
supply and availability of raw materials for some
product categories such as stationery and food
and drink, with a resulting increase in the cost
of supply. (Chronic physical risk.)
Geographies affected: global
purchasingoperations.
Current policies
We sell a broad range of products, which means
that even if certain categories are impacted
by supply chain challenges, revenues can be
maintained through sales of other product
categories. We will continue to evaluate our
product offering in the context of medium and
long-term climate change and the impacts that
this could have on different raw materials in our
supply chain, and if necessary, adapt our ranges
as appropriate.
Metrics used: Cost of sales (page 138); Scope 3
emissions (page 52).
Net zero 2050
Extreme weather events, including storms
and flooding are becoming more frequent
and could cause disruption to transport routes
affecting our distribution network and our
ability to transport stock to where it is needed.
More frequent periods of heavy rainfall could
lead to flooding at one or more of our stores
ordistribution centres. (Acute physical risk.)
Geographies affected: global retail and
distribution operations.
Current policies
Our stock is held across a number of WHSmith-
operated distribution centres, by suppliers
at their sites and in 1,791 stores in 32 different
countries. The impact of a flood event would
therefore be limited. We have a diverse product
range with a limited number of fast-moving
goods, andtherefore the majority of our logistics
operations are resilient to any short-term impacts
from major weather events.
Metrics used: Insurance costs (not disclosed).
Net zero 2050
1 Potential financial impact determined by impact on annual margin prior to any mitigation activity.
Rangeshave been chosen to align with our other accounting processes. There have been no identified
impacts on investment in research and development, acquisitions or divestments or access to capital
<£10m £10–30m >£30m
WH Smith PLC Annual Report and Accounts 2024
47
Strategic report Corporate governance Financial statements Additional information
Sustainability review continued
Potential financial impact
1
Climate risk/opportunity and business impact
Short
term
Medium
term
Long
term Business resilience and strategic response
There may be opportunities for increased
revenues as a result of changing consumer
trends relating to a switch to public transport
and increased revenue from new and existing
product categories. A switch to lower-carbon
intensity forms of transport could result in an
increase in revenues in some of our channels.
Asthe climate changes, there is also likely
to be an increase in customer demand for
some of our existing lines and new products.
These include those that have the potential
to mitigate the impacts of climate change,
because they have a lower environmental
footprint, or products that help customers to
adapt to a changing climate, particularly for
those who are travelling. (Physicalopportunity.)
Geographies affected: global retailoperations.
Current policies
WHSmith is collaborating with our landlord
partners on net zero strategies to play our part
in demonstrating industry’s intent for greener
forms of travel. We have a diverse portfolio
of stores across air, rail, hospitals, shopping
centres and high street locations which would
maximise the opportunities for growth in any
of these formats. Our commercial teams are
constantly assessing consumer trends and the
potential for new products and can quickly
adapt to any developments in the marketplace
to capitalise on new opportunities. For example,
inresponse to a warmer climate, weare ensuring
our ranges of travel products are meeting the
needsoftravellers.
Metrics used: Commercial sales from products
designed for a lower-carbon economy
(notdisclosed).
Net zero 2050
1 Potential financial impact determined by impact on annual margin prior to any mitigation activity.
Rangeshave been chosen to align with our other accounting processes. There have been no identified
impacts on investment in research and development, acquisitions or divestments or access to capital
<£10m £10–30m >£30m
In addition to the strategic responses in the table, other
processes for managing climate risks and opportunities
are undertaken at Group, business function and individual
property level, and include:
• A Group-wide policy framework, which includes our
Environment Policy, Code of Business Conduct and
Responsible Sourcing Requirements for Suppliers;
• Monitoring of key metrics including energy and fuel
consumption and pricing, cost of sales, consumer trend
data and sales information;
• Operational procedures covering, for example, processes
relating to energy and fuel management;
• Emergency response plans, for example, for flood
management or for disruption to supply networks;
• Internal audit and investigation; and
• Annual attestation processes by senior managers
of business functions, joint ventures and
franchise partners.
Senior management and the Board undertake regular
reviews of risk and opportunities relating to climate
change to ensure that any emerging issues that might
impact our strategy are appropriately identified and
evaluated. Significant climate-related issues form part of
risk reports to the Audit Committee. The ESG Committee
evaluates the annual update of the climate risk and
opportunity register and ensures appropriate responses
are in place. At an operational level, each business division
reviews its risk profile and risk responses throughout
the year to ensure climate risks and opportunities are
managed effectively.
Our internal audit team provides independent assurance
of the controls in place for significant risks across the
business, and this includes advice to senior management
and the Board on the adequacy and effectiveness of
climate risk management.
Our climate risk management processes follow the overall
approach for Group-wide risk management. Climate risks
and opportunities are considered from a strategic
and operational perspective to ensure we maintain a
comprehensive view of potential climate-related impacts
over different time horizons. Senior management and the
Board regularly review climate risks and opportunities
in line with other risks, to ensure a holistic view and
that risk mitigation responses are appropriate to risk
materiality, and are properly integrated into relevant
business activities.
Climate strategy
The Group’s strategy incorporates the delivery of our
sustainability plans as a key enabler, including minimising
our impact on the planet and decarbonising our activities
(pages 14 to 15). We recognise that transitioning to a net
zero business is the best way of mitigating climate risk
and capitalising on any climate-related opportunities.
Our target is to become a net zero emissions business by
2050. Our intention is to reduce Scope 1, 2 and 3 emissions
by at least 90 per cent by 2050 (from a 2020 baseline)
before neutralising any residual emissions.
As a first step to this long-term goal, we have set near-
term targets to help track our performance against our
overall climate target over time. The following targets
were developed using the Science Based Target initiative’s
(“SBTi’s”) Criteria and Recommendations for Near-Term
Targets, Version 5.0 and have been validated by SBTi.
• We will reduce absolute Scope 1 and 2 GHG emissions
by 80 per cent by 2030 from a 2020 base year; and
• 75 per cent of our suppliers (by emissions) covering
purchased goods and services and upstream transport
and distribution services will have science-based targets
in place by 2027.
48
WH Smith PLC Annual Report and Accounts 2024
Strategic report
Our carbon transition strategy focuses on a number
ofkey actions:
• Continuing to reduce our electricity and gas
consumption through increased energy efficiency
and investment in more efficient heating,
lightingand cooling.
• Continuing to invest in renewable electricity for direct
and indirect power purchases.
• Reducing our dependence on fossil fuels for transport
and logistics.
• Enhancing supplier engagement across all Business
Divisions to ensure our supply chain is adequately
disclosing carbon emissions and setting targets to
reduce them.
• Working with landlord and franchise partners to look at
opportunities to collaborate to reduce emissions.
• Reducing carbon emissions from packaging.
• Working with others in the retail sector to encourage
other stakeholders such as governments and
policy makers to make more rapid and larger scale
interventions towards net zero. We were a founding
member of the British Retail Consortium’s Climate
Action Roadmap, which was established to bring
together retailers, suppliers, policy makers and other
stakeholders, and to support customers to deliver the
UK retail industry’s ambition to be net zero by 2040.
Metrics and performance against targets
We use a number of different metrics to measure our
climate-related impacts, evaluate progress against our
targets and monitor risks and opportunities. They have
been developed with consideration of the cross-industry
metrics described in the TCFD implementation guidance
table A2.1, where we consider these to be material to
our business. Key metrics used to measure and manage
climate risk and opportunities are listed below and
included in the table on pages 47 and 48.
Metrics for managing climate risk
Metric Link to risk Units 2024 2023 2022
Electricity and gas
consumption
Increased costs for energy
andfuel
MWh 77,544
*
83,908
*
82,581
*
Fuel consumption Increased costs for energy
andfuel
millions of litres 1.72
*
1.73
*
1.54
*
Electricity from
renewablesources
Increased costs for energy
andfuel
MWh 66,498
*
52,101
*
53,231
*
Increased costs for meeting
netzero targets
Absolute Scope 1 emissions Increased costs for meeting
netzero targets
tonnes CO
2
e 1,370
*
1,765
*
1,609
*
Absolute Scope 2 emissions 1,809
*
9,337
*
8,758
*
Absolute Scope 3 emissions Increased costs of raw materials 513,030 468,420 291,730
Other climate-related metrics
Metric Link to risk Units 2024 2023 2022
Own-brand wood and
paper-based products from
sustainable sources
Linked to deforestation target Per cent 100
*
100
*
>99
*
Waste diverted from landfill Component of Scope 3 emissions Per cent >99
*
99
*
99
GHG Scope 1 and 2
emissions intensity
Industry benchmark tonnes CO
2
e/
£mrevenue
1.7
*
6.2
*
7.4
*
tonnes CO
2
e/
million
squarefeet
738
*
2,437
*
2,352
*
We engaged SLR Consulting to provide independent limited assurance of the data marked with an asterisk (*) in accordance with assurance standard ISAE 3000.
Fulldetails of the methodology and SLR Consulting’s assurance statement are available at whsmithplc.co.uk/sustainability
WH Smith PLC Annual Report and Accounts 2024
49
Strategic report Corporate governance Financial statements Additional information
Sustainability review continued
Other metrics used to monitor climate-related
impacts include:
Executive remuneration: Climate-related performance
indicators formed part of the Long-Term Incentive Plan
(see Directors’ remuneration report on pages 85 to 109).
Revolving credit facility: The Company’s revolving credit
facility includes specific annual targets aligned to the
Group’s Sustainability strategy, with lower interest rates on
any drawdown if we meet two or three of these targets,
nochange for one target and a higher rate if we do not
meet all three targets. These targets include ongoing
delivery of Scope 1 and 2 reductions and agreement with
suppliers to set science-based carbon reduction targets
tocover Scope 3.
Carbon pricing: The main carbon taxes affecting our
business are the UK Climate Change Levy, which is
included in the cost of gas and electricity used to power
our buildings and the UK Fuel Duty, which is included in
the cost of diesel and petrol used for the distribution of
our goods. These carbon taxes are part of energy and fuel
costs, which we monitor on an ongoing basis. We have
also included carbon pricing in our scenario analysis,
using projections from models by the International
Energy Authority and the Network for Greening the
Financial System.
External benchmarks: We monitor performance on
climate change in external benchmarks, including the
CDP Climate Change disclosure initiative and this year
wewere included in the leadership group of companies
with an “A” rating.
Energy and fuel consumption
We use energy to light and heat our stores, distribution
centres and support centres. We have been working
for many years to reduce the amount of energy we use,
recognising opportunities to reduce our overall GHG
emissions and operating costs for the business.
Our energy consumption in 2024 was 77,544
*
MWh
(2023: 83,908
*
) a decrease of eight per cent. The main
reason for this decreased consumption was a reduction
in energy consumption in UK stores. Total consumption
in non-UK stores increased because of an increase in the
number of stores in Europe and North America. We are
continuing with a range of energy reduction measures to
minimise the amount of electricity and gas that we use.
These include:
• Further development of our building management
system to monitor energy consumption across
stores and adjustment of energy settings for lighting,
heatingand air conditioning to minimise energy;
• Replacement of LED lights coming to the end of their
life, with new, more energy-efficient ones;
• Installation of boiler controls for gas heating systems
tofurther reduce consumption; and
• The use of fridges in our Travel stores with doors that
prevent cold air losses, increasing energy efficiency.
Our fuel consumption in 2024 was 1.72 million
*
litres
(2023: 1.73 million
*
).
Metrics for managing climate risk
Metric 2024 2023 2022
Energy use (buildings) MWh
UK 55,116
*
61,750
*
62,048
*
Non-UK 22,428
*
22,158
*
20,533
*
Total 77,544
*
83,908
*
82,581
*
Energy use (buildings) MWh
Gas 7,493
*
9,649
*
8,817
*
Grid electric (renewable) 66,498
*
52,101
*
53,231
*
Grid electric (non-renewable) 3,553
*
22,158
*
20,533
*
Total 77,544
*
83,908
*
82,581
*
Fuel use for transport (litres) 1.72 million
*
1.73 million
*
1.54 million
*
Energy use is calculated from metered billing data for electricity and gas supplied directly to WHSmith under half-hourly billing data. Non-half-hourly data is extrapolated
using floor areas
We engaged SLR Consulting to provide independent limited assurance of the data marked with an asterisk (*) in accordance with assurance standards ISAE 3000 and
3410. Further data and full details of the scope and methodology for reporting energy, fuel use and carbon emissions and SLR Consulting’s full assurance statement is
available at whsmithplc.co.uk/sustainability
50
WH Smith PLC Annual Report and Accounts 2024
Strategic report
Scope 1, Scope 2, and Scope 3 greenhouse gas (“GHG”) emissions, and the related risks
Global Scope 1 and 2 emissions (tonnes CO
2
e)
Metric 2024 2023 2022
Scope 1 emissions
From natural gas to heat stores, support centres and distribution centres 1,370
*
1,765
*
1,609
*
Percentage of emissions from UK-based operations 100%
*
100%
*
100%
*
Scope 2 emissions (market based)
From electricity purchased to power stores, support centres and distribution centres 1,809
*
9,337
*
8,758
*
Percentage of emissions from UK-based operations 0%
*
0%
*
0%
*
Total Scope 1 and 2 emissions (market based) 3,179
*
11,102
*
10,367
*
Percentage of emissions from UK-based operations 43%
*
16%
*
16%
*
Market based carbon intensity metric (revenue)
(tonnes CO
2
e per £m revenue) 1.7
*
6.2
*
7.4
*
Market based carbon intensity metric (floorspace)
(tonnes CO
2
e per square foot) 738
*
2,437
*
2,352
*
Scope 2 emissions (location based)
From electricity purchased to power stores, offices and distribution centres 17,949
*
19,361
*
18,625
*
Emissions have been calculated using the methodology defined in the GHG Protocol Corporate Standard. We use the market based method for Scope 2 for our total
emissions to account for purchasing of low-carbon electricity. Our reporting boundary includes our operations in the UK and our directly run international businesses
where we have operational control, consistent with those included in our consolidated financial statements. Our reported Scope 1 and 2 emissions include all UK and
international properties, both owned and leased, over which we have operational control
We engaged SLR Consulting to provide independent limited assurance of the data marked with an asterisk (*) in accordance with assurance standards ISAE 3000 and
3410. Further data and full details of the scope and methodology for reporting energy, fuel use and carbon emissions and SLR Consulting’s full assurance statement is
available at whsmithplc.co.uk/sustainability
Our total Scope 1 and 2 market based emissions
decreased this year to 3,179
*
tonnes CO
2
e (2023: 11,102
*
), as a
result of switching more of the electricity used to run our
stores to renewable sources in Europe and North America.
Emissions reductions were made through investments in
more efficient lighting, better gas and electricity control
systems and changes to refrigeration units, including the
deployment of new ranges of chillers with closing doors.
One hundred per cent of the electricity for buildings
in the UK, Europe and the United States of America is
renewably sourced, as a result of green tariffs where
we source directly, and the purchase of renewable
electricity certificates for electricity provided by landlord
partners. All certificates are retired on our behalf to avoid
double-counting.
Emissions from our UK operations were 1,370
*
tonnes
CO
2
e (2023: 1,765
*
). These residual emissions arise from
the combustion of natural gas and to date, we have
been unable to remove them completely as alternative
technologies appropriate for our buildings do not yet
exist. As the technology and nature of our operations
evolve, we expect to be able to reduce emissions from
these activities.
WH Smith PLC Annual Report and Accounts 2024
51
Strategic report Corporate governance Financial statements Additional information
Sustainability review continued
The majority of our Scope 3 emissions are from Category
1: Purchased Goods and Services, and emissions,
whichincreased this year as our revenue continued to
grow. As a first step towards our target for 75 per cent of
suppliers to have science-based targets in place, we have
started to engage with our largest suppliers. Those with
science-based targets in place now represent 32
*
per cent
of Category 1, 2 and 4 emissions.
We are working with our transport and logistics operators
to reduce Category 4 emissions, and have reduced
emissions per pallet moved by approximately 29
*
per
cent since 2007, by working with suppliers to reduce
fuel consumption through better route planning and
optimisation of delivery schedules, driver training and
vehicle telematics.
Global Scope 3 emissions (tonnes CO
2
e)
Scope 3 category 2024 2023 2022
1. Purchased goods and services and capital goods and services 403,000 374,000 210,000
2. Capital goods and services Emissions from capital goods and
services have been included in our
purchased goods and services category.
3. Fuel and energy-related activities 5,000* 6,400
*
3,700
*
4. Upstream transport and distribution 16,000 15,000 23,000
5. Waste generated in operations 30* 80
*
90
*
6. Business travel 2,300* 1,940
*
1,440
*
7. Employee commuting 17,300 17,600 16,900
8. Upstream leased assets Included in Scope 1 and 2 emissions.
9. Downstream transport and distribution Not relevant for our business.
10. Processing of sold products Not relevant for our business.
11. Use of sold products 50,000 37,000 1,700
12. End-of-life treatment of sold product 14,000 11,000 30,600
13. Downstream leased assets Not relevant for our business.
14. Franchises 5,400 5,400 4,300
15. Investments Not relevant for our business.
Total Scope 3 emissions 513,030 468,420 291,730
Scope 3 emissions have been calculated in accordance with the Corporate Value Chain (Scope 3) Accounting and Reporting Standard. Our reporting boundary
includes our operations in the UK and our directly run international businesses where we have operational control, consistent with those included in our consolidated
financialstatements. 2023 figures for category 1, 4, 11 and 12 emissions were restated to be on a comparable basis with 2024 as described in the Sustainability Addendum
We engaged SLR Consulting to provide independent limited assurance of the emissions data in the table above as marked with an asterisk (*) in accordance with
assurance standards ISAE 3000 and 3410. Further data and full details of the scope and methodology for reporting emissions and SLR Consulting’s full assurance
statement are available at whsmithplc.co.uk/sustainability
Progress against targets
Scope 3 category 2020 baseline 2024 Progress
Reduce Scope 1 and 2 GHG emissions
by80% by 2030
33,072
*
tonnes CO
2
e 3,179
*
tonnes CO
2
e
90%
*
reduction
75% of supply chain emissions to be
covered by science-based targets
by2027
Unknown 32%
*
of emissions are covered
by science-based targets
All forestry materials will be from
recycled or certified sources in
WHSmith-branded products
99%
*
100%
*
On track to meet target
52
WH Smith PLC Annual Report and Accounts 2024
Strategic report
Aim Target (baseline as stated) Progress
Health and
wellbeing
Create an
environment that
supports physical,
mental and
financialwellbeing
By 2025: improve our
employee engagement score
from a 2021 baseyear.
Our third global engagement survey took place
in October 2023, with a 22 per cent improvement
in engagement scores over the 2021 baseline.
Ongoing: ensure all
managers receive mental
wellbeingtraining.
We have increased the number of eligible
managers and have scheduled additional
training sessions to ensure everyone is covered.
Currently, 44 per cent of managers have been
trained and measures are in place to close this
gap by the end of the next financial year.
Diversity,
equity and
inclusion
Increase diversity of
senior management
By 2025: increase gender
and ethnic diversity of the
Board, Group Executive
Committee and Senior
Managerpopulations.
As at 31 August 2024, the proportion of women
at Board level had increased to 50
*
per cent.
Therewas an increase in the proportion of
women on the Group Executive Committee.
Theproportion of female Senior Managers
increased from 32
*
per cent in 2021 to 40
*
per
cent in 2024. Nine* per cent of Senior Managers
were from ethnicminorities.
Supply
chain
human
rights
Protect worker rights
in our supply chains
Ongoing: ensure we audit our
own-brand suppliers at least
every two years.
As at 31 August 2024, 89 per cent of supplier sites
had been audited through site visits and 11 per
cent had been assessed through desktop audit
within the previous two-year period.
By 2023: develop an audit and
engagement programme for
our tiertwo suppliers.
As at 31 August 2024, 47 tier two suppliers to our
direct tier one suppliers have been identified for
additional due diligence. To date, we have visited
49 per cent of these suppliers.
By 2025: 15 per cent of
own-brand suppliers will
have worker representation
committees in place.
As at 31 August 2024, 12
*
per cent of own-
brand suppliers have worker representation
committees in place.
We engaged SLR Consulting to provide independent limited assurance of the data marked with an asterisk (*) in accordance with assurance standard ISAE 3000. Full
details of the methodology and SLR Consulting’s assurance statement are available at whsmithplc.co.uk/sustainability
Employee engagement
Effective colleague engagement and an open, inclusive
culture are essential to creating an environment for our
teams to deliver for our customers. Our Group Chief
Executive, CFO/COO and the Managing Directors of each
division brief our support centre teams on a monthly
basis to provide updates on the Company’s strategy
and the latest operational developments, and answer
any questions.
We have a number of other communication channels
that are used for engaging colleagues across the business,
including feedback forums with senior management and
various network committees with executive sponsors.
To help us to understand more about how our colleagues
feel about working for WHSmith, we use a third-
party research organisation to carry out our annual
engagement survey.
The results of the survey are used each year to create
an action plan to improve the working environment
in support centres and stores; improve dialogue and
engagement; and build collaboration across our teams.
Continuing to improve the culture of the business is
important to the long-term success of the Company and
our target to improve employee engagement by 2025 is
one of the performance measures in senior management
incentive plans.
Learning and development
Our learning and development programmes are designed
to provide our employees with the knowledge and skills
they need to deliver their role and to support them as
they develop their careers. We provide a range of learning
opportunities and initiatives that are designed to help our
employees develop their aptitude and experience.
These include online courses, workshops, mentoring and
coaching and we continue to review and develop these
activities, to ensure that they meet the requirements of
our business and the learning and development needs
for our colleagues. Individuals also have regular career
conversations with their managers during the year,
with more formal performance reviews taking place
twice yearly.
Engaging our people
WH Smith PLC Annual Report and Accounts 2024
53
Strategic report Corporate governance Financial statements Additional information
Sustainability review continued
Reward and benefits
We believe in rewarding all employees with fair and
competitive reward packages. All employees are entitled
to a base salary and benefits, including pension and
staff discount. Participation in a pension plan is offered
to all employees in accordance with local legislation.
We support working from home through hybrid working
arrangements in roles where remote working is feasible.
In the UK, WHSmith operates an HMRC-approved Save-
As-You-Earn share option scheme (Sharesave Scheme),
which provides employees with the opportunity to acquire
shares in the Company on favourable terms. At the end
of the savings period, the participant has the opportunity
to buy the shares at a special option price that is fixed at
the start of the scheme at a discount to the share price at
that time. As at the 31 August 2024, 641 employees were
participating in our Sharesave Scheme.
Health, safety and wellbeing
We are committed to maintaining high standards of
health, safety and wellbeing and the Board monitors the
Company policies, processes and practices on an annual
basis. The Group has a number of health and safety
committees that comprise employee representatives
andprofessional health and safety advisers.
Colleagues receive health, safety and wellbeing training
appropriate to their role, including in relation to fire safety,
manual handling, how to prevent slips, trips and falls
and how to recognise and help colleagues who may be
affected by poor mental health. The Group Health and
Safety at Work Policy is the basis for our health and safety
management system, which sets out responsibilities,
processes and procedures.
This year, there were 33
*
reportable accidents across the
Company involving employees, contractors and members
of the public and no fatalities. We continue to look at the
root causes of safety incidents to try to eradicate them
at source.
Reportable accidents
2024 2023 2022
UK 25
*
33
*
27
*
North America 0
*
0
*
0
*
Australia 1
*
1
*
0
*
Rest of the World 7
*
14
*
7
*
Total 33
*
48
*
34
*
We engaged SLR Consulting to provide independent limited assurance of the
data marked with an asterisk (*) in accordance with assurance standard ISAE 3000.
Full details of the methodology and SLR Consulting’s assurance statement are
available at whsmithplc.co.uk/sustainability
We are committed to creating a workplace where
our colleagues feel valued, that they have a sense of
belonging and are supported at every stage of their
career with WHSmith. Our aim is to ensure that all line
managers are trained in mental health awareness and
that they have access to the right tools to be able to
support colleagues who may be experiencing stressful
life events. We continue to have at least as many trained
mental health first aiders as physical first aiders to ensure
colleagues can access support when they need it.
WHSmith has partnered with several organisations to
ensure our mental wellbeing provision is robust and
meaningful. In the UK, the Retail Trust provides our
Employee Assistance Programme (“EAP”), offering support
for employees and immediate family members, and in
store counselling when incidents occur, whichcould
impact the wellbeing of the whole team. Localised EAP
offerings are also available for employees inother countries.
Research shows that financial wellbeing can have a
strong impact on our mental health. Current and retired
employees and their families who are in financial difficulty
or hardship can apply to the WHSmith Benevolent Fund,
aregistered charity established in 1925.
This year, we worked with Salary Finance, enabling UK
employees to access free financial education and loans
at lower rates than those typically offered by traditional
lenders. To enhance this offer, financial support and many
useful budgeting and educational resources are also
available for our employees to access through our EAP.
Diversity, equity and inclusion
At WHSmith, our people are fundamental to the success
of our business whatever their age, race, religion, gender,
sexual orientation or disability. We continue to focus on
developing a culture of diversity, equity and inclusion
(“DEI”), backed up by a framework of policies, procedures
and ways of working.
We hope that our people genuinely feel that they can
bring their whole selves to work. We want to ensure that all
our employees receive equal and fair treatment, and this
applies to recruitment and selection, terms and conditions
of employment, promotion, training, development
opportunities and employment benefits. We believe
in creating a working environment that is free from
discrimination and harassment, and we will not permit
ortolerate this in any form.
Our DEI action plans set out how we are working towards
our goal of creating an environment where everybody
is welcome and feels they belong. Our DEI Committee
enables colleagues from across our business to engage
directly with leadership and work collaboratively
on improvements.
We have continued to improve the quality of data and
information that we hold in relation to our people, with
various campaigns throughout the year to encourage
employees to provide information to help shape our
policies and practices.
We recognise the value that employee networks can
bring. We currently have six employee networks in
operation across the business including those for Pride,
Gender Equity, Race and Culture, Disability, Parents and
Carers, and Wellbeing. These groups have provided a
channel for employee-led engagement and input to
ourDEI priorities.
54
WH Smith PLC Annual Report and Accounts 2024
Strategic report
The networks are each sponsored by a member of the
Group Executive, providing visible senior leadership and
a way for employee views to be relayed to the senior
management team.
We run regular internal engagement campaigns linked
with key events during the year, including International
Women’s Day, Pride, Black History Month, International
Day of Persons with Disabilities and a variety of religious
celebrations. These activities are always framed as part of
our wider DEI strategy.
Our external partnerships continue to evolve and allow
us to continue to build our external profile, while also
providing the opportunity to externally benchmark
our work. We have signed several industry charters,
committing to making progress on improving DEI in
our business. We are signatories to the British Retail
Consortium’s Diversity and Inclusion Charter, have joined
the industry organisation, Diversity in Retail and are
partnering with Black Young Professionals to help us to
attract, engage, recruit and retain black talent. This year
we also joined the Stonewall Diversity Champions
programme, developed to unlock the potential of our
LGBTQ+ workforce.
In terms of equal opportunities, the Company
gives full and fair consideration to applications for
employment when these are received from disabled
people. Training,career development and promotion
opportunities are equally applied for all our employees,
regardless of disability.
We remain committed to improving diversity at senior
levels and the proportion of women at Senior manager
level has increased this year. Our latest Gender Pay Report
can be found on our website. It shows a reduction in the
pay gap due to a greater proportion of females moving
into senior roles.
Male and female representation across the Group (as at 31 August 2024)
2024 2023 2022
Male Female Male Female Male Female
Number Per cent Number Per cent Number Per cent Number Per cent Number Per cent Number Per cent
Board
1
4
*
50
*
4
*
50
*
3
*
37
*
5
*
63
*
5
*
63
*
3
*
37
*
Group Executive
CommitteeMembers
2
10
*
77
*
3
*
23
*
9
*
82
*
2
*
18
*
7
*
70
*
3
*
30
*
Senior managers
3
57
*
60
*
38
*
40
*
49
*
60
*
32
*
40
*
49
*
65
*
26
*
35
*
Managers
4
293
*
46
*
338
*
54
*
349
*
49
*
369
*
51
*
349
*
48
*
371
*
52
*
All employees 5,458
*
38
*
8,993
*
62* 5,710
*
38
*
9,225
*
62
*
5,143
*
37
*
8,876
*
63
*
1 Board includes all statutory directors
2 Group Executive Committee Members are those who have responsibility for planning, directing or controlling the activities of the Company
3 Includes Group Executive Committee Members and colleagues graded at levels one and two below
4 Includes support centre colleagues graded at the level below 3 plus Store Managers, Cluster Managers and Post Office Managers
We engaged SLR Consulting to provide independent limited assurance of the data marked with an asterisk (*) in accordance with assurance standard ISAE 3000. Fulldetails of
the methodology and SLR Consulting’s assurance statement are available at whsmithplc.co.uk/sustainability
Ethnicity data for UK employees (as at 31 August 2024)
2024 2023 2022 2021 Census
1
Asian 17%
*
17%
*
15%
*
9%
Black 3%
*
3%
*
4%
*
4%
Mixed 2%
*
1%
*
1%
*
3%
Other 2%
*
2%
*
1%
*
2%
White 76%
*
77%
*
79%
*
82%
Percentage of employees included 88%
*
91%
*
89%
*
1 Census data covers England and Wales
We engaged SLR Consulting to provide independent limited assurance of the data marked with an asterisk (*) in accordance with assurance standard ISAE 3000. Fulldetails of
the methodology and SLR Consulting’s assurance statement are available at whsmithplc.co.uk/sustainability
WH Smith PLC Annual Report and Accounts 2024
55
Strategic report Corporate governance Financial statements Additional information
Sustainability review continued
Human rights and our supply chain
As a global retailer, we have a responsibility to respect
and support the dignity, wellbeing and human rights
of those in our own business, our supply chain and the
communities that we serve.
We must act in a way that avoids infringing the rights of
others and prevents adverse human rights impacts from
our activities. We manage human rights risks through our
due diligence processes in line with the United Nations
Guiding Principles for Business and Human Rights.
Our Human Rights Policy provides further details on our
approach and sets out the minimum requirements that
everyone working for, and with, WHSmith must meet.
We are committed to ensuring full respect for the human
rights of anyone working for us in any capacity and to fair
and safe work for all workers throughout our supply chain.
This year, we have updated our salient labour issues and
identified six priority areas for protecting human rights in
our supply chain: health and safety; freedom of association
and collective bargaining; working hours and overtime;
gender equality; social insurance and supply chain
transparency. We use a number of sources of information
and data including generic information published by
governments, international agencies, tradeunions,
non-governmental organisations (“NGOs”) and other
third-party experts; and information specific to our supply
chain gathered from workers during site visits, worker
surveys and worker representation committee meetings.
We prioritise those risks where the impact on workers is
likely to be greatest and where we are likely to be able to
have the greatest impact through our actions.
We work with suppliers and other third parties to develop
and progress targets and action plans for improvements
across these areas. We take a zero-tolerance approach to
modern slavery and our latest Modern Slavery Statement
sets out the steps we have taken to prevent modern
slavery in our own operations and supply chain.
WHSmith is a member of the Ethical Trading Initiative
(“ETI”), an alliance of companies, trade unions and non-
governmental organisations that promotes respect
for workers’ rights around the globe. Our Responsible
Sourcing Standards are based on the ETI Base Code
and underpin our strategy and sustainable sourcing
activities. We will only place orders with suppliers who are
committed to working towards compliance with these
standards, and we endeavour to bring about continual
improvement through a programme of factory audits
andongoing engagement.
To ensure we are identifying and assessing any risks from
workers’ rights or environmental issues through our
sourcing activities, we have developed a due diligence
process to provide appropriate risk control, mitigation
andremedy where needed.
Our in-house audit and engagement team conducts
audits of our own-brand suppliers at least every two
years, assessing compliance with our standards and
grading suppliers as gold, silver, bronze and unacceptable.
They also use a risk-based audit approach for key tier
two suppliers who manufacture major components that
are then used by our direct tier one suppliers of finished
products. These audits are identifying similar levels
of compliance and issues as for our tier one suppliers,
and continue to work with suppliers to build capacity
to improve standards for workers further down our
supply chains.
We use a mix of announced and unannounced audits
and a factory must be graded bronze or above if we are
to work with them. Our ESG Committee reviews progress
against our responsible sourcing strategy annually,
looking at our audit and engagement programmes,
emerging trends and risks, targets and performance.
The most frequent issues identified include health and
safety non-conformances, compliance with conditions
relating to working hours and missing documentation.
We also frequently identify non-conformance with social
insurance requirements, a common problem in China
where a large proportion of our suppliers are based.
In reviewing the supplier performance for this year, it is
notable that there were no suspended suppliers, a clear
improvement from last year when three suppliers faced
suspended orders. This positive shift suggests enhanced
compliance and stronger adherence to our Responsible
Sourcing Standards across the supply chain.
To supplement the information we gain from supplier
audits, our team also spends a significant part of its time
engaging with suppliers on an ongoing basis to build
stronger and more transparent relationships. The team’s
engagement focuses on resolving specific issues
identified during audits and on delivering wider projects
to help suppliers deliver on key areas such as worker
representation or health and safety.
We have an independent hotline for workers to report
issues they are concerned about, which we then
investigate and follow up with supplier management to
ensure any complaints or suggestions are dealt with in
the appropriate way. Calls to the hotline typically involve
queries about topics such as pay, accommodation and
relations with other workers.
This year, we have made good progress against our
target to increase the number of suppliers covered
by our worker representation initiative. The aim of
this programme is to help suppliers to develop fully
functioning worker committees to represent workers on
any matter affecting their rights, employment conditions
or working environment to resolve problems as they arise.
26
*
suppliers (2023: 11 suppliers) (12 per cent* (2023: 5per
cent) of the total supplier base) have now joined this
programme and have established committees that have
been operating for a year or more.
Our due diligence processes for products that do not carry
our brand have been extended this year to include an
assessment of compliance with our Responsible Sourcing
Standards. All trade products are now risk assessed prior
to purchase on the basis of country of origin and type
of product supplied. Any higher risk products are now
assessed through a review of third-party audit reports to
ensure compliance with our environmental and social
requirements. We have also introduced a process at
the supplier onboarding stage to ensure that suppliers
are aware of, and can operate in accordance with,
ourResponsible Sourcing Standards.
56
WH Smith PLC Annual Report and Accounts 2024
Strategic report
Aim Target (baseline as stated) Progress
Literacy Help children to
develop a love
of reading
By 2025: work with the
National Literacy Trust to
provide a book to every child
in the UK who does not own
one of their own.
Since 2021, we have donated over 525,000 books
(or cash equivalent).
Supporting
charities
and local
causes
Make a positive
impact through
fundraising,
donations and
volunteering
By 2025: increase the number
of employees involved in
supporting charities through
fundraising and volunteering.
Applications for support to the WHSmith Trust
from employees supporting charities through
fundraising and volunteering increased by
360per cent this year.
Literacy
Research in 2023 by our partner, the National Literacy
Trust, showed that approximately one in four young people
in the United Kingdom do not own a book of their own.
The pandemic and the cost-of-living crisis have widened
the gap in children’s literacy between affluent cities and
towns and areas of greater socio-economic deprivation.
We have a long-term partnership with the National
Literacy Trust, and this year we continued our support
for their Young Readers’ Programme, providing books
and other materials for schools in socio-economically
disadvantaged areas. This was augmented by the
WHSmith Group Charitable Trust (the “WHSmith Trust”)
which provided a financial contribution towards the
programme, supported by donations from WHSmith
customers and employees.
We are working with the National Literacy Trust to
ensure every child in the country can own a book of their
own. To date, we have donated the equivalent of over
525,000 books, through book donations and financial
contributions to provide the support that is needed.
This year, in its 25th anniversary year, we gifted 20,000
copies of The Gruffalo to the National Literacy Trust to
distribute to primary school children through a Gift-a-
Gruffalo fundraiser with our customers.
WHSmith continues to take a leading role in the delivery
of the World Book Day initiative, which is the biggest
annual celebration of books and reading in the UK.
Many of our High Street stores participated, redeeming
book vouchers enabling children to choose one of the
special World Book Day books or offset the cost against
any of our children’s ranges of books.
We also partnered with the WHSmith Trust to donate
WHSmith vouchers to schools across the UK for them to
choose books to increase their school library resources.
Almost 363,000 World Book Day vouchers were redeemed
and WHSmith vouchers totalling £20,000 were donated to
over 200 schools.
We engaged SLR Consulting to provide independent limited assurance of thedata
marked with * in accordance with assurance standard ISAE 3000. Fulldetails of
the methodology and SLR Consulting’s assurance statement areavailable at
whsmithplc.co.uk/sustainability
Supporting charities and local causes
To support and encourage employee involvement with
charities, the WHSmith Trust matches funds raised by
employees for charities of their choosing and recognises
employees who volunteer through a financial donation
tothe charity equivalent to the value of the time spent.
This year, through our charity partnerships, colleague and
customer fundraising and in-kind donations we have
donated £1,082,000* to charities and other good causes.
The full extent of our community investment activity is
outlined in our Sustainability Addendum 2024 and details
of how we engage with charities and other good causes
are set out in our Code of Business Conduct.
Our North American business has a longstanding
partnership with a charity called Miracle Flights, which is
a non-profit organisation providing commercial flights
for children in need of life-saving medical care, not found
in their local communities. WHSmith North America sells
their toy bear mascot in stores and this year raised almost
£105,000 for the work of the charity.
Our International team have also raised money and
provided product donations for local charities and causes
in the vicinity of our airport stores.
Contributing to communities
WH Smith PLC Annual Report and Accounts 2024
57
Strategic report Corporate governance Financial statements Additional information
Responsible business practices
We aim to always act with integrity, making the right
decisions and demonstrating the appropriate behaviours
to earn the respect of our customers and all those with
whom we do business. Everyone who works for, or on
behalf of, of WHSmith has a responsibility to report
anything that they are aware of that may be unlawful
or criminal, or could amount to an abuse of our policies,
systems or processes.
Our Code of Business Conduct sets out how our business
operates, and what is expected of every person who
works for, and on behalf of, WHSmith. It includes policies
relating to individual conduct, such as for anti-bribery
and anti-corruption measures, conflicts of interest,
anddata protection, as well as those relating to how we
work together, such as for diversity and inclusion, anti-
harassment and bullying, and health and safety. It also
sets out our business standards in relation to fair trading
practices, such as pricing and marketing, quality and
product safety, trade controls, competition and supply
chain practices.
All employees are required to confirm that they have read,
and are working in accordance with, our Code of Business
Conduct on an annual basis and are encouraged to report
any suspected breaches. Reports can be made internally
or using our independently operated and confidential
whistleblowing helpline at safecall.co.uk/report.
Safecall operates under a non-retaliation policy, so that
anyone who raises a concern in good faith is treated fairly,
with no negative consequences for their employment.
Each report is formally and robustly investigated and
monitored to ensure that any corrective action or
remediation has been undertaken.
Safecall is available to our suppliers and business partners
and is communicated through our Responsible Sourcing
Standards. These standards set out in more detail the
behaviours and conduct we expect from all suppliers.
We require all employees and anyone working for us in any
capacity to comply with the UK Bribery Act, inaddition to
any local anti-bribery and anti-corruption laws. Our Code of
Business Conduct states that employees or others working
on our behalf must never offer or accept any kind of bribe,
and that our subcontractors, consultants, agents and
others we work with must have similar anti-bribery and
anti-corruption measures in place.
Non-financial and sustainability
information statement
The sustainability section of the Annual Report on
pages 40 to 58, the Sustainability Addendum 2024 and
the Policies and Position Statements section of our
website contain a wide range of information about the
environment, employees and social matters. The table
below sets out where information on non-financial and
sustainability matters can be found within our Annual
Report and Accounts. The due diligence arrangements
for each topic are included in the respective policy
documentation on our website.
Disclosure
Policies and standards which
govern our approach Pages
Business model 6 and 7
Environmental
matters
Section 172(1) statement
Sustainability – planet
Principal risks and
uncertainties
33 to 39
43 to 52
59 to 65
Climate-related
financial disclosures
TCFD reporting 44 to 52
Colleagues Section 172(1) statement
Sustainability – people
Directors’ remuneration
report
33 to 39
53 to 56
85 to 109
Social matters Section 172(1) statement
Sustainability –
communities
Principal risks and
uncertainties
33 to 39
57
59 to 65
Respect for
human rights
Section 172(1) statement
Sustainability – people
Principal risks and
uncertainties
33 to 39
53 to 56
59 to 65
Anti-corruption and
anti-bribery matters
Sustainability –
Responsible business
Principal risks and
uncertainties
58
59 to 65
Non-financial KPIs Key Performance
Indicators – Non-financial
Sustainability
17
40 to 58
Principal risks and
uncertainties
TCFD reporting
Principal risks and
uncertainties
44 to 52
59 to 65
Sustainability review continued
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WH Smith PLC Annual Report and Accounts 2024
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Principal risks and uncertainties
Risk management framework
Our risk management framework is designed
sothat material business risks throughout the Group
canbe identified, assessed and effectively managed.
This framework incorporates the following core elements:
Risk monitoring responsibilities
Board and Audit Committee
Overall responsibility for risk management oversight
rests with the Board, exercised through the delegated
monitoring by the Audit Committee. Day-to-day
management of risk is embedded within the business
through a layered approach, as summarised below.
Business Risk Committees and
ExecutiveManagement
Formal Risk Committees are held on a quarterly basis
within each division, comprising members of each
Divisional Executive team and Senior Management,
the CFO/COO and Group Risk and Audit Director.
These Business Risk Committees act as a forum to review
the updated risk registers and reports on ongoing risk
monitoring activity undertaken by Internal Audit and
other corporate oversight functions. All principal business
functions compile risk registers to identify key risks,
assessthem in terms of their likelihood and potential
impact, and determine appropriate control strategies
to mitigate the impact of these risks, taking account of
risk appetite.
Operational Audit, Loss Prevention and
Second Line Oversight Functions
These functions help to monitor compliance with internal
control procedures across stores, distribution centres
and other areas of the business, encompassing our
ongoing programme of store audits and stocktaking
results, and help to identify and monitor further areas
ofemerging risks.
Internal Audit
The Audit function facilitates the ongoing update
of corporate and business function risk registers,
andconducts an independent programme of activity
in order to evaluate and test the working of internal
controls in relation to the Group’s systems and processes.
The results of this ongoing programme are shared
with the Business Risk Committees and the Group
Audit Committee.
Annual review of the effectiveness of
internal control
During the year, the Board reviewed the effectiveness
of the Group’s risk management and internal controls
systems. This review included the discussion and review
of the risk registers and the internal controls across all
business functions, as part of an annual exercise facilitated
by the Internal Audit team. During the year, the Board also
received presentations from management on specific
risk areas such as cyber risk, international expansion, and
the ongoing risk monitoring processes and appropriate
mitigating controls.
Identify
Risk registers
compiled by each
business function
Risk mapping
to identify
emerging issues
Assess
Determining
the likelihood of
risk occurrence
Evaluating the
potential impact
Mitigate
Agreeing actions
to manage the
identified risks
Ensuring control
measures are
in place
Monitor
Reviewing the
effectiveness
of controls
Maintaining
continued oversight
and tracking
WH Smith PLC Annual Report and Accounts 2024
59
Strategic report Corporate governance Financial statements Additional information
Principal risks and uncertainties continued
Board review of principal and emerging
risks and uncertainties
The Board has undertaken a robust assessment of
the principal risks and uncertainties facing the Group,
including those that would threaten its business model,
future performance, solvency or liquidity.
Those principal risks are described on the following pages,
along with explanations of how they are managed and
mitigated. The Group recognises that the profile of risks
constantly changes and additional risks not presently
known, or that may be currently deemed immaterial,
may also impact the Group’s business objectives and
performance. Our risk management framework is,
therefore, designed to manage rather than eliminate the
risk of failure to achieve business objectives, and, as such,
can only provide reasonable and not absolute assurance
against these principal uncertainties impacting on
business performance.
Changes in principal risks compared to
last year
The table on pages 60 to 63 summarises the principal
risks and uncertainties agreed by the Board. The table
incorporates further information relating to the change
in the level of these risk exposures during the year,
tohighlight whether, in our view, exposure to each of the
principal risks is increasing, decreasing or remains broadly
the same.
Ongoing global conflicts
WHSmith has no direct operations in countries impacted
by the current ongoing global conflicts. The business
could, however, be significantly impacted by any
further potential escalation of these conflicts or wider
geopolitical threats.
Emerging risks
Our risks will continue to evolve in response to future
events and new challenges, where further emerging
risks may develop that could materially impact the
business in the future. Our Risk Forums and Monitoring
Framework seek to identify such potential changes in
ourrisk landscape.
Change in risk level
Higher No change Lower
Risk/description Mitigation Change in risk level
Economic, political, competitive and market risks
The Group operates in highly competitive
markets and in the event of failing to compete
effectively with travel, convenience and
other similar product category retailers,
this may affect revenues obtained through
our stores. Failure to keep abreast of
market developments, including the use
of new technology, couldthreaten our
competitive position.
Factors such as the economic climate, levelsof
household disposable income, seasonality
of revenue, changing demographics and
customer shopping patterns, and raw material
costs could impact on profit performance.
The Group may also be impacted by
political developments both in the UK and
internationally, such as regulatory and tax
changes, increasing scrutiny by competition
authorities and other changes in the general
condition of retail and travel markets or impacts
from further geopolitical threats or escalation
inglobal conflict.
The Group’s performance is dependent on
the levels of consumer confidence and upon
effectively predicting and quickly responding
to changing consumer demands, both
in the UK and internationally. The Group
conducts customer research to understand
current demands and preferences in order
to help translate market trends into saleable
merchandise and store formats.
Uncertainties
relating to
geopolitical threats
or escalation of
global conflict.
Link to our
strategic priorities:
1
2
3
4
5
6
Key:
Link to our strategic priorities
1
Space growth
3
Category development
5
Maintain profitability and cash generation
ofourHigh Street and digital businesses
2
ATV growth
4
Cost and cash management
6
Disciplined capital allocation
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WH Smith PLC Annual Report and Accounts 2024
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Risk/description Mitigation Change in risk level
Brand and reputation
The WHSmith brand is an important asset and
failure to protect it from unfavourable publicity
could materially damage its standing and the
wider reputation of the business, adversely
affecting revenues.
As the Group continues to expand its
convenience offer in travel locations, introducing
a wider range of products, associated risks
include compliance with food hygiene and
health and safety procedures, product and
service quality, environmental or ethical
sourcing, and associated legislative and
regulatory requirements.
The Group monitors the Company’s reputation,
brand standards and key service and compliance
measures to ensure the maintenance of
operating standards and regulatory compliance
across all our operations. We undertake regular
customer engagement to understand and
adapt our product, offer and store environment.
We operate a framework for monitoring
compliance with all regulatory, hygiene and
safety standards, encompassing supplier
and store audits and clearly defined sourcing
policies and procedures. Our ESG-related
policies and processes encompass risk
identification and mitigation in respect of all
environmental, ethical sourcing and other
reputational risks.
Link to our
strategic priorities:
1
2
3
4
5
Key suppliers and supply chain management
The Group has agreements with key suppliers
in the UK, USA, Europe, Asia and other countries
in which it operates. The interruption or loss of
supply of core category products from these
suppliers to our stores may affect our ability
to trade.
Quality of supply issues may also impact the
Group’s reputation and impact our ability
to trade.
The Group conducts risk assessments of all
its key suppliers to identify alternatives and
develop contingency plans in the event that
anyof these keysuppliers fail.
Suppliers are required to comply with the
conditions laid out in our Supplier Code of
Conduct that covers areas such as production
methods, employee working conditions and
quality control.
The Group has contractual and other
arrangements with numerous third parties in
support of its business activities. None of these
arrangements alone are individually considered
to be essential to the business of the Group.
Link to our
strategic priorities:
1
2
3
4
5
Store portfolio
The quality and location of the Group’s store
portfolio are key contributors to the Group’s
strategy. Retailing from a portfolio of good
quality real estate in prime retail areas and
key travel hubs at commercially reasonable
rates remains critical to the performance of
the Group.
Most Travel stores are held under concession
agreements, on average for five to ten
years, although there is no guarantee that
concessions will be renewed or that Travel will
be able to bid successfully for new contracts.
All of High Street’s stores are held under leases,
and consequently, the Group is exposed, to the
extent that any store becomes unviable as a
result of rental costs.
The Group undertakes research of key markets
and demographics to ensure that we continue
to occupy prime sites and identify appropriate
locations to acquire new space.
We maintain regular dialogue and good
relationships with all our key landlords.
The Group also conducts customer research
and analysis to gather feedback on changing
consumer requirements, which is shared with
landlords as part of this ongoing relationship
management programme.
Link to our
strategic priorities:
1
3
4
5
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Strategic report Corporate governance Financial statements Additional information
Principal risks and uncertainties continued
Risk/description Mitigation Change in risk level
Business interruption
An act of terrorism or war, or an outbreak of
a pandemic, could reduce the number of
customers visiting WHSmith outlets, causing
a decline in revenue and profit. In the past,
our Travel business has been particularly
impacted by geopolitical events such as major
terrorist attacks, which have led to reductions
in customer traffic. Closure of travel routes both
planned and unplanned, such as the disruption
caused by natural disasters or weather-related
events, may also have a material effect on
business. The Group operates from a number of
distribution centres and the closure of any one
of them may cause disruption to the business.
In common with most retail businesses, the
Group also relies on a number of important
IT systems, where any system performance
problems, cyber risks or other breaches in data
security could affect our ability to trade.
The Group has a framework of operational
procedures and business continuity plans that
are regularly reviewed, updated and tested.
The Group also has a comprehensive insurance
programme covering our global assets,
providing cover ranging from property damage
and product and public liability, tobusiness
interruption and terrorism. Back up facilities
and contingency plans are in place and are
reviewed and tested regularly to ensure that
business interruptions are minimised.
The Group’s IT systems receive ongoing
investment to ensure that they are able to
respond to the needs of the business. Back-up
facilities and contingency plans are in place
and are tested regularly to ensure that data is
protected from corruption or unauthorised use.
Uncertainties
relating to
geopolitical threats
or escalation of
global conflict.
Link to our
strategic priorities:
4
5
Reliance on key personnel
The performance of the Group depends on
its ability to continue to attract, motivate
and retain key support centre and store staff.
The retail sector is very competitive, and the
Group’s personnel are frequently targeted by
other companies for recruitment.
The Group reviews key roles and succession
plans. The Remuneration Committee monitors
the levels and structure of remuneration for
directors and senior management and seeks to
ensure that they are designed to attract, retain
and motivate the key personnel to run the
Group successfully.
Link to our
strategic priorities:
1
2
3
4
5
International expansion
The Group continues to expand internationally.
In each country in which the Group operates,
the Group may be impacted by political or
regulatory developments, or changes in the
economic climate or the general conditionof
the travel market.
The Group utilises three business models to
manage risk in our overseas locations: directly
run, joint venture and franchise.
The Group uses external consultants to advise
on compliance with international legislative
and regulatory requirements, tomonitor
developments that may impact our operations
in overseas territories, and to conduct
reputational due diligence on potential new
business partners. Our geographical spread
of activity mitigates against the material
concentration of risk in any one area.
Uncertainties
relating to
geopolitical threats
or escalation of
conflict, as the
business continues
to expand globally.
Link to our
strategic priorities:
1
4
6
Cyber risk, data security and GDPR compliance
The Group is subject to the risk of systems
breach or data loss from various sources
including external hackers or the infiltration
of computer viruses. Theft or loss of Company
or customer data or potential damage to
any systems from viruses, ransomware or
other malware, or non-compliance with data
protection legislation, could result in fines and
reputational damage to the business that
couldnegatively impact our revenue.
The Group employs a framework of IT controls
to protect against unauthorised access to
our systems and data, including monitoring
developments in cyber security. This control
framework encompasses the maintenance of
firewalls and intruder detection, encryption of
data, regular penetration testing conducted
by our appointed external quality assurance
providers and engagement with third-party
specialists, where appropriate.
We have a Steering Group overseeing our
approach and response to cyber risk, and
monitoring our programme of ongoing
compliance with the Payment Card Industry
Data Security Standard and the UK and
EU GDPR.
Continuing increase
in number of
externally reported
cyber threats.
Link to our
strategic priorities:
4
5
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Risk/description Mitigation Change in risk level
Treasury, financial and credit risk management
The Group’s exposure to, and management of,
capital, liquidity, credit, interest rate and foreign
currency risk are analysed further in Note 21 on
page 154 of the financial statements.
The Group also has credit risk in relation to its
trade and other receivables, and sale or return
contracts with suppliers.
The Group’s Treasury function seeks to reduce
exposures to interest rates, foreign exchange,
and other financial risks, to ensure sufficient
liquidity is available to meet foreseeable needs
and to invest cash assets safely and profitably.
The Group does not engage in speculative
trading in financial instruments and transacts
only in relation to underlying business
requirements. The value of any deposit that
can be placed with any approved counterparty
is based on short-term and long-term credit
ratings and, in accordance with the Group’s
treasury policy, it is limited to a maximum of
£75m for each approved counterparty.
The Group’s Treasury policies and procedures
are periodically reviewed and approved by the
Audit Committee and are subject to Group
Internal Audit review.
The Group has a £400m revolving credit facility
with a maturity date of 13 June 2029. The facility
is provided by a syndicate of banks and is
sustainability linked. The facility has a further
uncommitted extension option of one year,
subject to lender approval.
The Group also has a £327m Convertible
Bond at a fixed coupon rate of 1.625 per cent,
whichexpires in May 2026.
Link to our
strategic priorities:
4
5
6
Environment and social sustainability
Our investors, customers and colleagues expect
us to conduct our business in a responsible
and sustainable way. Climate change is now
recognised as a global emergency. Failure to
effectively respond and influence our value
chain and wider stakeholders to de-carbonise
could damage our reputation and introduce
higher costs. Delivery against our sustainability
targets and meeting regulatory obligations
is vital.
We have identified several climate-related
risks,including;
• Increases in the cost of energy and fuel
from carbon pricing and changing
market dynamics.
• Disruption to supply of goods caused
by acute and chronic changes in
weather patterns.
Although the impact is limited over our outlook
period, these risks are potentially significant
over the longer term.
Our sustainability strategy, Our Journey to a
Better Business, sets out policies, objectives,
and action plans to address our key issues.
It is overseen by Board and Executive level
committees. We have set a target to be net
zero by 2050 and are taking action across the
business to increase our climate resilience.
We continue to focus on more environmentally
responsible sourcing practices, reducing and
redesigning packaging where possible and
ensuring traceability for forestry products.
Link to our
strategic priorities:
1
2
3
4
5
WH Smith PLC Annual Report and Accounts 2024
63
Strategic report Corporate governance Financial statements Additional information
Principal risks and uncertainties continued
Viability statement
In accordance with the UK Corporate Governance
Code 2018, the directors are required to issue a “viability
statement” declaring whether the directors believe the
Group will be able to continue to operate and meet its
liabilities over a period greater than 12 months.
In assessing the Group’s viability, the Board has considered
current and historical performance, the Group’s current
financial position, the business model and strategy, our
approach to risk management and our principal risks and
uncertainties and mitigating factors (see pages 59 to 65).
The Group’s business model and strategy is presented
on pages 3 to 31. The Strategic report describes the
Group’s plans at both Group and operating division level.
These plans consider the Group’s cash flows, committed
funding liquidity positions, forecast future funding and key
financial metrics.
Current financing
The Group’s financing arrangements comprise a £400m
multi-currency revolving credit facility (“RCF”) maturing
in June 2029. As at 31 August 2024, the Group had drawn
down £117m on the RCF, and had £30m cash on deposit.
The Group also has £327m convertible bonds in issue with
a maturity of May 2026.
The covenants on the above facilities are tested half-yearly
and are based on fixed charges cover and net borrowings.
Assessment period
In determining the appropriate timeframe for assessing
the Group’s viability, the Board has considered the
ongoing challenges in the macroeconomic environment
including the cost-of-living impact and historically high
inflation rates.
A three year period is considered the most appropriate
timeframe for the Group’s viability assessment for
several reasons:
• It is consistent with the Group’s financial planning cycle,
management incentive schemes and medium-term
financing considerations.
• The Group updates its three-year plan annually,
taking into consideration the identified principal and
emerging risks over this timeframe. The three-year plan
was approved by the Board in July 2024 and the 2025
Budget was approved by the Board in September 2024.
Assessment of viability
In making the viability assessment, the directors have
modelled a number of scenarios for the three-year
period to 31 August 2027. As disclosed in the Strategic
report on pages 59 to 65, the Board has undertaken a
robust assessment of the emerging and principal risks
facing the Group, including those that would threaten its
business model, future performance, solvency or liquidity.
The process of mitigating and managing these risks is
described on pages 59 to 65 of the Strategic report.
Within the viability scenario modelling we have applied
an assumption that we will be able to refinance existing
lending facilities as they become due.
The base case scenario is consistent with the Board
approved 2025 Budget and the three-year plan,
whichtakes into consideration uncertainties regarding
the ongoing challenges in the macroeconomic
environment. Under this scenario, the Group has
significant liquidity and comfortably complies with all
covenant tests during the three-year assessment period.
The base case forecasts have been subject to stress-
testing, which models the impact of several “severe
but plausible” downside scenarios, based on the
identified principal risks covering a range of operational
and financial impacts. The aim of this modelling is to
understand the circumstances that could lead to the
viability of the Group being threatened, with particular
focus given to those risks that would have the most
material and pervasive impacts.
• Economic downturn
Representing a fall in demand and substantial cost
inflation, in the context of ongoing challenges in the
macroeconomic environment.
We have applied the same assumptions modelled as
part of the going concern assessment (refer to page
126) extrapolated across the remainder of the three-
year viability assessment period. This scenario assumes
reductions to revenue assumptions of between five and
ten per cent versus base case as appropriate by division;
additional inflation in labour costs beyond that included
in the base case; and margin pressures. Apart from an
equal reduction in turnover rents in our Travel businesses,
wehave not assumed any decrease in other variable costs.
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Further scenarios have been modelled taking
into consideration other key principal risks to the
Group,including:
• Loss of a key contract in Travel
• Supply chain disruption
• Impact of a data breach and potential fines
• Impact of increased carbon pricing
We consider the likelihood of these scenarios occurring
concurrently to be improbable and are confident in
the Group’s ability to apply mitigating actions in such
a scenario.
Reverse stress-testing has also been applied to the
economic downturn scenario to determine the level of
Travel revenue reduction the Group could absorb before
breaching its financial covenants. The required reduction
was considered to be remote.
Mitigating actions that would be available to the Group
in the above scenarios include reduction or deferral
of non-committed capital expenditure, reductions in
discretionary operating spend, reduction or suspension of
dividends, restructuring of operations and renegotiation
of facilities. The scenario analysis has not taken such
mitigating actions into account.
The anticipated costs of our net zero climate change
commitments have been incorporated within the
base case model within the next three years. As set out
in our climate-related disclosures on pages 44 to 52,
the impact on the Group’s financial performance and
position is not expected to be material in the short term,
however, wehave modelled a scenario related to the
potential impact of increased carbon pricing within the
assessment period.
Conclusion
Taking account of all the above matters, the Group’s
current financial performance and position, and the
principal risks, the directors have a reasonable expectation
that the Group will be able to continue in operation
and meet its liabilities as they fall due over the viability
assessment period.
This Strategic report was approved by the Board on
14 November 2024.
On behalf of the Board
Carl Cowling
Group Chief Executive
14 November 2024
WH Smith PLC Annual Report and Accounts 2024
65
Strategic report Corporate governance Financial statements Additional information
Directors’ biographies
Annette Court
Chair
Carl Cowling
Group Chief Executive
Robert Moorhead
Chief Financial
Officer and Chief
Operating Officer
Colette Burke
Non-Executive Director
Date of appointment: 26 February 2019. Carl was
appointed as Group Chief Executive on 1 November 2019.
Committee membership: Member of the
ESG Committee.
Skills and experience: Carl has considerable retail
experience and has been instrumental in the development
and execution of the Company’s strategy. His strong
leadership and strategic expertise enable him to lead the
Group and create shareholder value. He joined WHSmith
as Managing Director, Travel in November 2014. In 2017,
he was appointed Managing Director, High Street. Prior to
joining WHSmith, Carl was Managing Director of Global
partnerships at Carphone Warehouse and previously
spent over a decade at Dixons where he held the roles of
Ecommerce Director, Commercial Director and Managing
Director of the airport retailing business, Dixons Travel.
Date of appointment: 1 December 2008. Robert will step
down from the Board on 30 November 2024.
Skills and experience: Robert has over 25 years of retail
and financial management experience, which has proved
invaluable in his role as Chief Financial Officer and Chief
Operating Officer. He has a deep understanding of the
Group’s businesses and strategy and has a strong track
record of creating shareholder value. He is a Chartered
Accountant and joined WHSmith in 2004 as Retail
Finance Director. He is a non-executive director and Chair
of the Audit Committee of The Watches of Switzerland
Group PLC. Previously, he was Group Finance Director at
Specsavers Optical Group and Finance and IT Director of
World Duty Free Europe. He also held a number of roles
at B&Q and Kingfisher Group. He started his career at
Price Waterhouse.
Date of appointment: 1 July 2023.
Committee membership: Member of the Audit, ESG,
Nominations and Remuneration Committees.
Skills and experience: Colette has significant US and
retail experience. She is the Executive Vice President
and Chief Commercial Officer of the LEGO Group,
responsiblefor the Group’s global commercial strategy.
Prior to joining the LEGO Group, she had a 25-year career
at consumer electronics company, Bose Corporation
as Global Head of Sales and Marketing and across a
wide range of commercial, general management and
marketing leadership roles at a global, regionaland
national level, including 19 years working in the
United States.
Date of appointment: 1 September 2022. Annette was
appointed as Chair on 1 December 2022.
Committee membership: Chair of the
Nominations Committee.
Skills and experience: Annette has a proven track record
as a Chair of a publicly quoted company and brings a
wealth of experience from her Board appointments,
and has a strong background in financial services and
technology. She is a non-executive director of Sage Group
plc. She was previously the chair of Admiral Group plc,
CEO of Europe General Insurance for Zurich Financial
Services and the CEO of Direct Line Group (formerly RBS
Insurance). She has also been a member of the Board of
the Association of British Insurers (“ABI”).
66
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
Nicky Dulieu
Non-Executive Director
Simon Emeny
Non-Executive Director
Situl Jobanputra
Non-Executive Director
Helen Rose
Non-Executive Director
Date of appointment: 26 February 2019.
Committee membership: Senior Independent Director
and a member of the Audit, ESG, Nominations and
Remuneration Committees.
Skills and experience: Simon has a wealth of
consumer-facing experience, including transport hub
sites, andbrings this broad range of skills and commercial
expertise to the Board and its Committees. He is group
chief executive of Fuller, Smith & Turner PLC, a role he has
held since 2013. Simon is also a non-executive director of
National Gallery Global Limited. He was previously the
Senior Independent Director of Dunelm Group PLC.
Date of appointment: 9 September 2020.
Committee membership: Chair of the Audit and
Remuneration Committees, and a member of the ESG
and Nominations Committees. Nicky will step down as
Chair of the Audit Committee on30 November 2024.
Skills and experience: Nicky has substantial financial and
retail expertise. She trained as an accountant and held
various strategic and financial roles within Marks & Spencer
Group plc over a 23-year period. In 2006, Nickyjoined the
board of Hobbs Limited as Chief Operating Officer and
Finance Director and was Chief Executive from 2008 until
2014. With her finance and retail expertise, she is a valuable
member of the Board and Chair of the Audit Committee
and Remuneration Committee. She is a non-executive
director of Barratt Redrow plc and The Unite Group PLC.
Previous directors who served during the financial year
ended 31 August 2024:
Kal Atwal stepped down as a director of the Company on
12 September 2023.
Marion Sears stepped down as a director of the Company
on 7 February 2024.
Ian Houghton
Company Secretary and Legal Director, and was
appointed in September 1998.
Date of appointment: 1 March 2024.
Committee membership: Chair of the ESG Committee
and a member of the Audit, Nominations and
Remuneration Committees.
Skills and experience: Situl has significant financial
and property experience and brings this broad range
of skills and commercial expertise to the Board and its
Committees. He is an experienced corporate financier,
having previously worked in mergers and acquisitions,
equity capital markets, corporate broking and real estate
investment banking, latterly at Deutsche Bank. He is
the Chief Financial Officer of Shaftesbury Capital PLC,
havingjoined in 2014 and served on itsboard since 2017.
Date of appointment: 1 July 2024.
Committee membership: Member of the Audit,
ESG, Nominations and Remuneration Committees.
Helen will be appointed Chair of the Audit Committee
on1 December 2024.
Skills and experience: Helen is a chartered accountant
and former senior finance and operations leader with
considerable experience in multi-site retail and financial
services sectors. She is a non-executive director of
Greencore plc.
WH Smith PLC Annual Report and Accounts 2024
67
Strategic report Corporate governance Financial statements Additional information
Corporate governance report
Board role and effectiveness
The Board of the Company is committed to achieving the
highest standards of corporate governance.
As Chair, my role is to run the Board to ensure that the
Company operates effectively and ensure that the Board
works collaboratively and has the right balance of skills,
knowledge, independence and experience to assess,
manage and mitigate risks.
This report, which forms part of the Directors’ report,
provides details of how the Company has applied the
principles of, and complied with the provisions of, the UK
Corporate Governance Code 2018 (the “Code”). A copy of
the Code is available publicly from frc.org.uk.
Purpose, values and culture
Our purpose is to make every one of life’s journeys better.
We have been serving customers through our presence
in town centres, travel hubs and hospitals for over 230
years, providing a retail destination of choice and a sense
of community for thousands of customers every day.
We have a presence in 32 countries, employ approximately
14,000 employees, source products from thousands of
suppliers and play an important part in creating vibrant
and sustainable local economies.
We recognise we have an obligation to grow our
business sustainably, providing financial returns for
our shareholders, while maintaining high standards of
environmental stewardship and social equity. In delivering
these obligations, it is important that our colleagues,
business partners and suppliers are able to make the right
decisions. We support them with a strong values-based
culture, ongoing training and development, and a solid
foundation of responsible business governance, policies
and programmes. You can read more about our purpose,
values and culture on pages 33 to 58.
Stakeholder engagement
As a Group, we have a long-standing commitment to
high standards of corporate responsibility, which includes
considering the interests of a broad stakeholder group in
making business decisions. The Board remains focused on
all our stakeholders, including our colleagues, customers,
shareholders and the communities we are part of. You can
read about our engagement with investors on page
36, with our customers on page 35, with our employees
on page 34 and community involvement on page 38,
and our approach to rewarding our workforce in the
Remuneration report on page 93.
There are a number of effective employee engagement
processes in place across the Group, including the
employee engagement survey and employee forums.
Simon Emeny is the designated non-executive
director with responsibility for workforce engagement.
Board members attended employee forums and
engaged with employees throughout the year on a wide
range of subjects, including the Company’s approach to
executive pay.
Section 172 of the Companies Act 2006 (the “Act”) requires
a director to have regard to stakeholder interests when
discharging their duty to promote the success of the
Company for the benefit of the shareholders as a whole.
You can read how the Board has had regard to the
interests of the Company’s stakeholders in accordance
with Section 172 of the Act on pages 33 to 39.
“The Board of the
Company is committed
to achieving the
highest standards of
corporate governance.”
Annette Court
Chair
68
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
Board changes
In March 2024 we announced that, after more than 20
years with the business, Robert Moorhead would be
retiring as CFO/COO with effect from 30 November 2024.
Robert Moorhead is succeeded by Max Izzard who joined
WH Smith on 1 September 2024 as CFO Designate and
will be appointed to the Board on 1 December 2024.
Max Izzard is a highly experienced finance director,
withdeep expertise in multi-site international consumer
businesses. He was previously SVP of Group and Corporate
Finance at Burberry PLC. Robert Moorhead will remain
as an employee of the Company until 28 February 2025
in order to assist with the transition to Max Izzard as CFO.
In February 2024, we announced that Marion Sears would
be stepping down from the Board on 7 February 2024,
and Situl Jobanputra’s appointment as a non-executive
director with effect from 1 March 2024. In June 2024,
weannounced the appointment of Helen Rose as a
non-executive director with effect from 1 July 2024.
Thanks
I want to pay tribute to Robert Moorhead’s achievements
during his 20 years with the business. He has played an
integral role in the transformation of the Group to a highly
successful global travel retailer. He leaves the Group in a
strong financial and strategic position and we wish him
well for the future. I would like to thank Marion Sears for
her contribution to the Board, in particular through her
leadership of the Remuneration Committee and for also
chairing the ESG Committee. I would also like to thank
Nicky Dulieu for her valuable contribution as Chair of the
Audit Committee and her ongoing support as Chair of
theRemuneration Committee.
I would like to offer my sincere thanks to all my colleagues
across the Group for their tremendous efforts and
ongoing commitment to its continued success.
Annette Court
Chair
14 November 2024
Corporate governance statement
This report, which forms part of the Directors’ report,
together with the Strategic report and Directors’
remuneration report provides details of how the
Companyhas applied the principles of the Code.
Throughout the financial year ended 31 August 2024,
and up to the date of this report, the Board considers
that it has complied with the provisions of the Code.
Following the publication of the UK Corporate Governance
Code 2024, we will review our governance framework in
order to align with the 2024 Code.
The Company’s disclosures on its application of the
principles of the Code can be found on the following pages:
Board leadership and
Companypurpose
Chair’s letter See pages 68 and 69
ESG Committee report See pages 82 to 84
Purpose, values and culture See page 68
Strategy See pages 1 to 65
Shareholder and
stakeholderengagement
See pages 33 to 39
Division of responsibilities
Leadership, commitment and
Board support
See pages 69 and 70
Composition, succession
andevaluation
Board and Committee evaluation See pages 72 and 73
Nominations Committee report See pages 80 and 81
Audit, risk and internal control
Risks, viability and going concern See pages 77 to 79
Audit Committee report See pages 76 to 79
Remuneration
Directors’ remuneration report See pages 85 to 109
The information that is required by Disclosure Guidance
and Transparency Rule 7.2 to be contained in the
Company’s Corporate governance statement is included
in this Corporate governance report, in the Directors’
remuneration report on pages 85 to 109 and in the
Directors’ report on pages 110 to 112.
Composition and operation of the Board
As at the date of this report, the Board comprised the
Chair, two executive directors and five independent
non-executive directors. Short biographies of each of
these directors, which illustrate their range of experience,
areset out on pages 66 and 67. There is a clear division
of responsibility at the head of the Company: Annette
Court (Chair) being responsible for running the Board and
Carl Cowling (Group Chief Executive) being responsible
for implementing strategy, leadership of the Company
and managing it within the authorities delegated by the
Board. Simon Emeny is the Senior Independent Director.
The Board structure ensures that no individual or group
dominates the decision-making process.
All the directors, whose biographies are on pages 66 and
67, served throughout the financial year ended 31 August
2024 and up to the date of this report with the exception
of Situl Jobanputra and Helen Rose who were appointed
as non-executive directors on 1 March 2024 and 1 July
2024 respectively.
WH Smith PLC Annual Report and Accounts 2024
69
Strategic report Corporate governance Financial statements Additional information
Corporate governance report continued
All of the non-executive directors who served during the
year and up to the date of this report are considered by
the Board to be independent.
All directors have access to the advice and services of
the Company Secretary and may take independent
professional advice at the Company’s expense in the
furtherance of their duties. The Board receives appropriate
and timely information, with Board and Committee
papers normally being sent out a week before meetings
take place. The need for director training is regularly
assessed by the Board.
The interests of the directors and their immediate families
in the share capital of the Company, along with details
of directors’ share awards, are contained in the Directors’
remuneration report on pages 85 to 109.
At no time during the year did any of the directors have
a material interest in any significant contract with the
Company or any of its subsidiaries.
Attendance at Board meetings
The Board met ten times during the year. It is expected
that all directors attend Board meetings and Committee
meetings unless they are prevented from doing so by
prior commitments. The minimum time commitment
expected from the non-executive directors is one day per
month attendance at meetings, together with attendance
at the AGM, Board away-days and site visits, plus adequate
preparation time. Where directors are unable to attend
meetings, they receive the papers for that meeting
giving them the opportunity to raise any issues and give
any comments to the Chair in advance of the meeting.
Following the meeting, the Chair briefs any director not
present on the discussions and any decisions taken at
the meeting.
The following table shows the number of Board and
Committee meetings held during the financial year
ended 31 August 2024 and the attendance record of
individual directors:
Number of meetings attended
Directors and role Board skills and competencies
Board
Tenure
– Years
Board
10
Audit
4
ESG
3
Nominations
5
Remuneration
6
Annette Court
(a)
Chair
Finance and retail expertise, strong
board leadership and considerable
governanceexperience.
2 9 of 10
(b)
– – 5 of 5 –
Colette Burke
Non-executive director
US and retail expertise, strong
commercial and marketing experience
on a global level.
1 10 of 10 4 of 4 3 of 3 5 of 5 6 of 6
Carl Cowling
(c)
GroupChief Executive
Strategic and retail expertise, strong
leadership of the Group and creation
ofshareholder value.
5 10 of 10 – 3 of 3 – –
Nicky Dulieu
Non-executive director
Finance and retail expertise,
extensive knowledge of retail
andcustomerservice.
4 9 of 10
(d)
4 of 4 3 of 3 4 of 5
(d)
6 of 6
Simon Emeny
Non-executive director
Commercial expertise and a wealth
ofconsumer facing experience.
5 10 of 10 4 of 4 3 of 3 5 of 5 6 of 6
Situl Jobanputra
(e)
Non-executive director
Financial and property expertise and
an experienced corporate financier.
– 6 of 6 2 of 2 1 of 1 3 of 3 3 of 3
Robert Moorhead
(f)
Chief Financial Officer/
Chief Operating Officer
(“CFO/COO”)
Retail and financial expertise,
deep understanding of the Group
and strategy, and creation of
shareholdervalue.
16 10 of 10 – – – –
Helen Rose
(g)
Non-executive director
Finance and operational expertise with
considerable experience in multi-site
retail and financial services sectors.
– 2 of 2 1 of 1 1 of 1 1 of 1 1 of 1
a) Annette Court was invited to and attended 4 meetings of the Audit Committee, 3 meetings of the ESG Committee and 6 meetings of the Remuneration Committee
b) Annette Court was unable to attend the 25 July 2024 Board meeting due to a prior commitment, which had been arranged before the meeting was convened.
Shereceived the papers in advance of the meeting and gave her comments to the Senior Independent Director, Simon Emeny, who chaired the meeting in
herabsence
c) Carl Cowling was invited to and attended 4 meetings of the Audit Committee, 5 meetings of the Nominations Committee and 6 meetings of the
RemunerationCommittee
d) Nicky Dulieu was unable to attend the November 2023 Board and Nominations Committee meetings for personal reasons. She received the papers in advance of the
meetings and gave her comments to the Chair
e) Situl Jobanputra was appointed as a director of the Company on 1 March 2024
f) Robert Moorhead was invited to and attended 4 meetings of the Audit Committee, 3 meetings of the ESG Committee, 4 meetings of the Nominations Committee and
3 meetings of the Remuneration Committee
g) Helen Rose was appointed as a director of the Company on 1 July 2024
h) Kal Atwal stepped down from the Board on 12 September 2023. Prior to leaving the Company she attended 1 meeting of the Board
i) Marion Sears stepped down from the Board on 7 February 2024. Prior to leaving the Company she attended 4 meetings of the Board
j) The Board and the Remuneration Committee have met three times since 31 August 2024. The Audit Committee has met twice since 31 August 2024
TheESGCommittee has met once since 31August2024
70
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
Board and executive management diversity
The table below shows a breakdown of the composition of the Board and executive management as at 31 August 2024
in accordance with the UK Listing Rules disclosure requirements. As at 31 August 2024, one of the four senior positions
on the Board was held by a woman and the representation of women on the Board was 50 per cent, and the Board
composition included one director from an ethnic minority background. At the year end, the Board and members of
executive management were asked to complete a diversity disclosure questionnaire to confirm which of the categories
set out in the table below they identify with:
Gender identity
Number of
Board members % of the Board
Number of senior positions
on the Board (CEO, CFO,
Chairand SID)
Number in executive
management
% of executive
management
1
Women 4 50 1 3 23
Men 4 50 3 10 77
Non-binary – – – – –
Not specified/prefer not to say – – – – –
Ethnic background
Number of
Board members % of the Board
Number of senior positions
on the Board (CEO, CFO,
Chairand SID)
Number in executive
management
% of executive
management
1
White British or other White
(including minority-White Groups)
7 88 4 12 92
Mixed/Multiple Ethnic Groups – – – – –
Asian/Asian British 1 12 – 1 8
Black/African/Caribbean/
Black British
– – – – –
Other ethnic group – – – – –
Not specified/prefer not to say – – – – –
1 Executive management includes the Group Executive Committee (most senior executive body below the Board) and the Company Secretary, excluding administrative
and support staff, as defined by the UK Listing Rules
2 As announced on 15 March 2024, Robert Moorhead will step down from the Board on 30 November 2024 and Max Izzard will be appointed to the Board on
1 December 2024. This change is not expected to impact the Company’s ability to meet any of the gender and ethnic diversity targets set out in the UK Listing Rules
Matters reserved for the Board
The Board manages the Company through a formal
schedule of matters reserved for its decision, with its
key focus being on creating long-term sustainable
shareholder value. The significant matters reserved for
its decision include: the overall management of the
Company; approval of the business model and strategic
plans including acquisitions and disposals; approval of
the Company’s commercial strategy and operating and
capital expenditure budgets; approval of the Annual
Report and Accounts statements, material agreements
and non-recurring projects; treasury and dividend
policy; control, audit and risk management; executive
remuneration; and environmental, social and corporate
governance matters.
The Board has a forward timetable to ensure
that it allocates sufficient time to key areas of the
business. The timetable is flexible enough for items
to be added toany agenda as necessary. The Board’s
annual business includes Chief Executive’s reports,
includingbusiness reports; financial results; strategy
and strategy updates, including in-depth sessions on
specific areas of the business and strategic initiatives;
consideration of potential acquisitions; risk management;
dividend policy; investorrelations; health and safety;
whistleblowing; sustainability strategy; Board evaluation;
governanceandcompliance; communications; and the
Annual Reportand Accounts.
The Board set itself a number of objectives at the
beginning of the year to help it manage the Company
and support its strategy, including in relation to People
and future talent planning, Culture, Group operations,
growingthe Group’s North American businesses,
cybersecurity and sustainability. The Board reviewed
how it had met its objectives at each meeting during
the year and as part of the Board evaluation. The Board
has set new objectives forthe financial year ending
31 August 2025.
During the year, the Board assessed the basis on which
the Company generates and preserves value over
the long-term and considered the opportunities and
risks to the ongoing future success of the business,
thesustainability of the Company’s business model
and how its governance contributes to the delivery
of its strategy. Further information on the risks and
opportunities to the future success of the Company
canbe found in the Strategic report on pages 3 to 65.
WH Smith PLC Annual Report and Accounts 2024
71
Strategic report Corporate governance Financial statements Additional information
Corporate governance report continued
Board activities in the financial year ended 31 August 2024
Strategy
• Approval of Company purpose and values
• Approval of the Group’s long-term objectives and
commercial strategy ofthe Group
• Oversight of Group performance against strategy
and budget
• Approval of the sustainability strategy and report
• Reviewing the strategic plans for each of
the businesses
• Approval of the Three-Year Plan
• Project and tender approvals
• Corporate strategy updates
• Approval of internal Group legal entity restructure
Financial and operational performance
• The Company’s preliminary and interim results,
trading statements and the Annual Report
and Accounts
• Going concern and viability statements
• Fair, balanced and understandable assessment
• Climate-related disclosures
• Dividend, treasury and tax strategies
• Approval of the budget
• Approval of capital expenditure
• Approval of Share buyback programme
• Consideration of the buy-out of the WH Smith
Pension Trust
Other stakeholder engagement
Customers • Customer initiatives and experience updates
• Extending our categories and ranges,
includingagreater focus on food, health and
beauty, andtechnology products
• Global sourcing strategy
• Reviewing customer feedback and approving
customer-facing strategies
• Investing in existing and new stores
• Continuing to reduce environmental footprints
where possible and improving product
environmental labelling
Shareholders • Annual General Meeting
• Investor relations updates
• Consultation on Board composition and executive
remuneration including the new directors’
remuneration policy
• Chair met significant shareholders
Employees • Annual health, safety and wellbeing reviews to
ensure employee safety
• Company culture
• Focus on Diversity, Equity and Inclusion
• People strategy
• Consideration of workforce pay, including the
annual pay review
• Modern slavery update and statement
• Talent, succession planning and leadership
• Employee engagement insights
• Gender pay gap reporting
• Colleague leadership and development
• Approving the transfer of distribution centre
colleagues to GXO
Governance and risk
• Risk framework and internal control review
• Regulatory compliance updates
• Group delegation of authority review
• Succession planning including the appointment
ofMax Izzard as CFO
• Principal risks and uncertainties review
• Cyber security
• Conflicts of Interest and new appointments
• Committee Terms of Reference review
• Board evaluation process
Climate-related financial disclosures
The Board received presentations and updates on
the progress of the Company to comply with the UK
Listing Rules requirement to make disclosures which
are consistent with the Task Force on Climate-related
Financial Disclosures (“TCFD”) recommendations and
recommended disclosures, and the Companies Act 2006
requirements in relation to climate-related financial
disclosures. You can read more on our climate-related
financial disclosures on pages 44 to 52.
Board and Committee evaluation
The performance of the Board, its Committees and its
individual directors is a fundamental component of the
Company’s success. The Board regularly reviews its own
performance and carried out a formal evaluation in June
and July 2024. The Board, in accordance with the Code,
appointed an external evaluator, Ian White, to carry out
the Board evaluation this year. Ian White provides board
evaluation services and has no other connection with
the Company or any individual directors. Ian White has
reviewed and agreed with this disclosure on the Board
evaluation undertaken by him.
72
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
The scope of the Board evaluation process was discussed
and agreed with the Chair and Company Secretary and
included the following components:
• Questionnaire: Board members and certain executives
completed an anonymous questionnaire designed to
focus on a number of key areas and to provide context
to the evaluation.
• Individual interviews: One-to-one interviews were
conducted with Board and executives.
• Board and Committee observations: The evaluator
observed Board and Committee meetings to assess
how directors interacted with each other and the
dynamics of the meetings.
• Documentation review: Board and Committee papers
along with previous reviews and other governance
material was reviewed by the evaluator.
• Draft report: A draft report was provided to the Chair
and Company Secretary for discussion.
• Report: The final report was shared with Board
members in September 2024 and reviewed at the
Board meeting in November 2024, with the evaluator
facilitating the discussion. The Board will oversee the
action plan to address recommendations and monitor
progress in 2025.
The main areas considered during the evaluation were
Board composition, expertise and role; strategy and
operations; Board objectives; Board dynamics and culture;
management of Board and Committee meetings;
Boardand Committee papers, presentations and support;
risk management; and leadership, succession planning
and priorities.
The results of the assessment confirmed that the Board
has a clear sense of its purpose and that it is functioning
well, with some identified opportunities for improvement.
Everyone interviewed felt that the Board was an open,
inclusive and participative Board committed to the success
of the Company and its stakeholders. There were key areas
where Ian White made recommendations to the Board
in order to continuously and progressively improve how
it works. The recommendations, including those set out
below, were discussed and agreed by the Board.
Outcomes and areas of focus for 2025
Enhanced
visibility of
new Board
members
New members of the Board should
enhance their visibility and strengthen their
relationship with colleagues. As such, they
should consider a range of options including
making informal visits to colleagues by
walking the floor, visiting stores more often
and holding and attending meetings within
Group offices.
Effective
meetings
Agendas should be kept under review to
ensure effective prioritisation.
Board
papers
The Company Secretarial team should take
steps to remind those presenting papers
to the Board or a Committee that they
follow properly the guidelines as to form
andcontent.
Succession
planning
While the Board is relatively new in its
composition it should keep succession
planning high on the agenda, particularly
given the relatively small size of the Board.
The Board also reviewed the actions agreed following the
internally facilitated evaluation carried out in 2023 and
agreed that good progress had been made in respect
of these actions, including in respect of the Company’s
Board succession plan (most notably, the appointment
of Max Izzard as CFO Designate) and a greater focus
on talent management and succession plans at Senior
Leadership level to strengthen the diversity of the senior
management pipeline. In addition to the Board and
Committee evaluation process, the Group Chief Executive
reviews the performance of the CFO/COO and other
senior executives.
The Chair reviews the performance of the Group
Chief Executive.
The Chair also undertook a review with each of the
non-executive directors to assess their effectiveness
and commitment to the role. During the year, the Chair
had regular meetings with the non-executive directors,
without the executive directors present, to discuss Board
issues and how to maintain the best possible team.
The Board is satisfied that each of the non-executive
directors dedicates sufficient time to the business of
the Company and contributes to its governance and
operations. The Senior Independent Director met the
other non-executive directors to undertake an assessment
of Annette Court’s performance. The non-executive
directors confirmed that there are no relationships
or circumstances which are likely to affect, or could
appear to affect, her judgement or independence.
The non-executive directors, taking into account the
views of the executive directors, concluded that Annette
Court is an effective Chair and clearly demonstrates her
commitment to the role.
Succession planning
Under the Company’s amended Articles of Association,
which were approved and adopted on 26 January 2024,
directors are required to retire and submit themselves
annually for re-election and new directors appointed by
the Board offer themselves for election at the next AGM
following their appointment. The Company’s Articles of
Association give a power to the Board to appoint directors
and, where notice is given and signed by all the other
directors, to remove a director from office.
During the year ahead, the Board will continue to focus
on executive succession planning to ensure the readiness
of internal candidates for all key roles across the business.
The Board is committed to good governance, culture and
leadership, recognising that these are key considerations
for a strong, sustainable business and that the tone comes
from the top. The Company’s purpose, values and culture
will continue to form an important part of the Board’s
discussions. The Nominations Committee will continue
to support the Board by ensuring that culture is built into
recruitment and succession considerations.
WH Smith PLC Annual Report and Accounts 2024
73
Strategic report Corporate governance Financial statements Additional information
Corporate governance report continued
Culture
The Board assesses and monitors the culture of the
business in a number of ways, including through:
interaction with executives, members of the senior
management team, and other employees in Board
meetings and on visits to stores, offices and other
Company locations; regular Board agenda items
and supporting papers, covering risk management,
internal audit reports and follow-up actions, customer
engagement, health and safety, accident reports,
employee engagement and retention, whistleblowing
and regulatory breaches; assessing the results of
colleague surveys, reviewing a range of employee
indicators, including engagement, retention, absence,
learning and development, gender pay, DEI, workforce
composition and demographics; and engaging with other
stakeholders, as described in the Section 172 Statement
on pages 33 to 39 and the Corporate governance report.
During the year, the Board was satisfied that the practices
and behaviour of the Board and employees were aligned
with the Company’s purpose, values and strategy.
The Board recognises the importance of being visible
and accessible to customers and employees. During the
year, the non-executive directors attended business
risk committee meetings, employee forums and
accompanied management on site visits to the High
Street and Travel stores. The Board also visited its stores
in Newark and LaGuardia Airports, Moynihan and Penn
Station in New York and Dublin Airport to gain a better
understanding of the operation and culture of the
North American and International Travel businesses.
The Board believes that site visits provide directors with
valuable insights into the business, helping to deepen
their knowledge and understanding of the Company.
When joining the Board, a new non-executive director
typically meets individually with each Board member
and with senior management to give them insight into
all aspects of the business, including our strategy, culture,
values, sustainability, governance, and the opportunities
and challenges facing the business. The Company
Secretary briefs them on policies, Board and Committee
procedures, and core governance practice. They visit a
number of business locations and meet key advisers.
They also receive induction materials including recent
Board and Committee papers and minutes, strategy
papers, investor presentations, Matters Reserved for the
Board and the Board Committees’ Terms of Reference.
During the year, Colette Burke, Situl Jobanputra and
Helen Rose participated in an induction programme,
which included:
• a review of previous Board papers and minutes, a
briefing paper on the duties of directors, Terms of
Reference for the Board and Committees, and Group
policies and procedures including the Code of Dealing;
• meetings with senior management, including the
Managing Directors of the Group’s businesses,
ChiefPeople Officer, Group Risk Director,
Investor Relations Director and Legal Director/
Company Secretary;
• attended trading and risk committees;
• meetings with advisers; and
• store visits.
A similar induction programme has been designed for
Max Izzard who joined the Company as CFO Designate
on 1 September 2024 and who will join the Board as an
executive director on 1 December 2024.
Diversity policy
The Board values diversity in all its forms, both within its
own membership and at all levels of the Group. The Board
is highly supportive of the initiatives the Company has
in place to promote diversity throughout the business.
The Board believes that diversity in its widest sense is a key
component to the success of the Company and receives
reports on the Company’s diversity profile to ensure
that the workforce reflects our commitment to diversity.
The Board aims to ensure its membership, and that of the
wider Group, reflects diversity in its broadest sense so that
it has a combination of demographics, skills, experience,
race, age, gender, sexual orientation, education and
professional background, thereby providing a wide range
of perspectives, insights and challenge needed to support
good decision making. The Board’s diversity policy sets
out the Company’s approach to diversity applicable to the
Board, its Committees and senior management and aims
to ensure that the Board nominations and appointments
process, and the hiring and promotions process for senior
management, is based on fairness, respect and inclusion,
and that the search for candidates will be conducted with
due regard to the benefits of diversity.
Further information on the Company’s commitment to
diversity can be found in the Nominations Committee
report on pages 80 and 81 and in the Employees section
ofthe Strategic report on pages 53 to 55.
Risk management
The Board has overall responsibility for the Group’s
system of risk management and internal control
(including financial controls, controls in respect of
the financial reporting process and operational and
compliance controls) and has conducted a detailed
review of its effectiveness during the year to ensure that
management has implemented its policies on risk and
control. This review included receiving reports from
management, discussion, challenge, and assessment
ofthe principal risks.
No significant failings or weaknesses were identified from
this review. In addition, the Board received presentations
from management on higher risk areas, for example,
cyber security, UK supply chain/IT transformation and
international expansion. The Board has established an
organisational structure with clearly defined lines of
responsibility, which identify matters requiring approval
by the Board. Steps continue to be taken to embed
internal control and risk management further into the
operations of the business and to deal with areas that
require improvement, which come to the attention of
management and the Board. Such a system is, however,
designed to manage rather than eliminate the risk of
failure to achieve business objectives, and can only provide
reasonable and not absolute assurance against material
misstatement or loss.
74
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
The Board confirms that there is an ongoing process for
identifying, evaluating and managing emerging and
principal risks faced by the Group, including those risks
relating to social, environmental and ethical matters.
The Board undertakes a robust assessment of the Group’s
emerging and principal risks. The Board confirms that the
processes have been in place for the year under review
and up to the date of this report and that they accord with
the Financial Reporting Council (“FRC”) Guidance on Risk
Management, Internal Control and Related Financial and
Business Reporting (the “Risk Management and Internal
Control Guidance”). The processes are regularly reviewed
by the Board. The principal risks and uncertainties facing
the Group, together with the procedures and processes
for identifying, managing and the steps taken to mitigate
principal and emerging risks, can be found in the Strategic
report on pages 59 to 65.
Further information on internal controls and risk
management can be found in the Audit Committee
report on pages 78 and 79.
Engagement with shareholders
The Board’s primary role is to promote the success of the
Company and the interests of shareholders. The Board
is accountable to shareholders for the performance and
activities of the Group. The Company recognises the
importance of communicating with its shareholders to
ensure that its strategy and performance are understood.
This is achieved principally through the Annual Report and
Accounts and the AGM. In addition, a range of corporate
information, including all Company announcements and
presentations, is available to investors on the Company’s
website whsmithplc.co.uk. For more information on
shareholder engagement see page 36.
Formal presentations are made to institutional
shareholders following the announcement of the
Company’s full year and interim results. The Board
recognises that the AGM is normally the principal forum
for dialogue with private shareholders. All directors
normally attend the AGM and are available to answer
questions that shareholders may wish to raise.
The Board as a whole is kept fully informed of the views and
concerns of major shareholders. The Group Chief Executive
and CFO/COO update the Board following meetings with
major shareholders and analysts’ briefings are circulated
to the Board. The Head of Investor Relations also carries
out a regular programme of work and reports to the
Board the views and information needs of institutional
and major investors. This is part of the regular contact that
the Group maintains with its institutional shareholders.
When requested to do so, the Chair and non-executive
directors attend meetings with major shareholders.
During the year, the Chair engaged with the Company’s
largest shareholders to understand their views on the
Company. The Chair of the Remuneration Committee also
engaged with the Company’s largest shareholders and
representatives in respect of the renewal of the Company’s
directors’ remuneration policy.
Anti-corruption
The Company has continued to enhance its policies and
procedures in order to meet the requirements of the
Bribery Act 2010. These policies and procedures include
training for individuals to ensure awareness of acts that
might be construed as contravening the Bribery Act.
The Group’s policy on anti-bribery and corruption is
included in the Company’s Code of Business Conduct
atwhsmithplc.co.uk/sustainability.
Fair, balanced and understandable
The Board confirms that it considers the 2024 Annual
Report and Accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Company’s position and
performance, business model and strategy.
Discussion of the Board’s assessment of the Annual report
and accounts is described in the Audit Committee report
on page 78.
Board Committees
The Board delegates specific responsibilities to the
Board Committees, being the Audit, ESG, Nominations
and Remuneration Committees. Details of the role,
composition, responsibilities and activities of the Audit
Committee can be found on pages 76 to 79, the ESG
Committee on pages 82 to 84, the Nominations Committee
on pages 80 and 81 and the Remuneration Committee
in the Directors’ remuneration report on pages 85 to 109.
The role and responsibilities of each Committee are set out
in formal Terms of Reference, which are available on the
Company’s website whsmithplc.co.uk.
Approvals Committee
The Approvals Committee facilitates the internal approvals
process by approving matters as delegated by the Board.
The Approvals Committee comprises the Group Chief
Executive and the CFO/COO.
Disclosure Committee
The Disclosure Committee is responsible for ensuring
compliance with the Company’s obligations under the
UK Market Abuse Regulation and the maintenance
of disclosure controls and procedures. The Disclosure
Committee comprises all of the directors of the Company
and the Company Secretary.
WH Smith PLC Annual Report and Accounts 2024
75
Strategic report Corporate governance Financial statements Additional information
Corporate governance report continued
Audit Committee report
Audit Committee report
Dear Shareholder
As Chair of the Audit Committee, I am pleased to present
my report on the activities of the Audit Committee for
the financial year ended 31 August 2024. Our principal
objectives are to oversee and assist the Board in its
responsibility to produce an Annual Report and Accounts
which is fair, balanced and understandable and to
provide effective financial governance in respect of the
Group’s financial results, the performance of both the
internal audit function and the external auditor, and the
management of the Group’s systems of internal control,
business risks and related compliance activities.
The other members of the Committee are Colette
Burke, Simon Emeny, Situl Jobanputra and Helen
Rose, whoare all independent non-executive directors.
The Board considers that I have recent and relevant
financial experience, as required by the Code, and that the
Committee, as a whole, has competence relevant to the
sector in which the Company operates. The Committee
met four times during the year. At the invitation of the
Committee, the Chair of the Board, the Group Chief
Executive, the CFO/COO, the Director of Audit and Risk,
representatives of the Group’s senior management
team and of the external auditor attend meetings.
The Committee has regular private meetings with
theexternal and internal auditors during the year.
A summary of other activities undertaken by the
Committee during the year is as follows:
• reviewing the Company’s approach to cyber security;
• considering papers from management on the
significant financial reporting judgements made in the
preparation of the Interim results announcement and
the Annual Report and Accounts;
• considering the Company’s going concern statement
and papers from management, which consider the
liquidity and covenant compliance of the Group;
• considering the Company’s viability statement and
papers from management, which consider the
long-term viability of the Group;
• considering presentations and updates on the
Company’s climate-related financial disclosures;
• considering the accounting implications of the buyout
of the WH Smith Pension Trust;
• reviewing the effectiveness of the Group’s financial
reporting, internal control policies and procedures for
the identification, assessment and reporting of risk,
including cyber security and tax;
• monitoring the integrity of the Group’s financial
statements and trading statements;
• assessing and recommending to the Board that
the Annual Report and Accounts is fair, balanced
and understandable;
• reviewing the Interim results announcement and the
Annual Report and Accounts, including, where relevant,
compliance with the UK Listing Rules, Disclosure
Guidance and Transparency Rules, the Code and
statutory reporting requirements and recommending
those documents for Board approval;
• receiving updates and recommendations on the
reforms to the Code and internal controls proposed
bythe UK Government;
• considering the Company’s emerging and principal
risks and uncertainties and reviewing the mitigating
actions that management has taken to ensure that
these risks are appropriately monitored and controlled;
• considering the Company’s systems and framework
of controls designed to detect and report fraud and
money laundering;
• receiving reports from Internal Audit in respect of
calls to the Company’s confidential Speak Up helpline
(whichis operated by an external company, Safecall);
• receiving reports and presentations from members of
the Company’s senior management and its business
risk committees on areas of the Company’s control and
risk management processes;
“I am pleased to present
my report on the
activities of the Audit
Committee for the
financial year ended
31August2024.”
Nicky Dulieu
Chair of the Audit Committee
76
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
• receiving and reviewing reports from the Internal
Audit and Risk teams and reviewing and agreeing their
annual plans;
• holding private meetings with the external and
internal auditors;
• agreeing the scope of PwC’s annual audit plans,
assessing the effectiveness of the external audit process
and considering the accounting, financial control
and audit issues reported by PwC that flowed from
their work;
• approval of plan for audit partner rotation;
• reviewing external auditor’s independence and
approving the policy on the engagement of PwC to
supply non-audit services;
• negotiating and agreeing the audit fee;
• undertaking a performance review of Internal Audit
andthe external auditor;
• reviewing the Company’s treasury policy;
• approval of the Group Tax Strategy;
• receiving updates on the policies and procedures
forthe UK and EU General Data Protection
Regulations(“GDPR”);
• considering and approving the report on the Company’s
payment practices;
• assessing the impact of new accounting standards
andguidance; and
• reviewing the Committee’s Terms of Reference.
There were no shareholder requests for certain matters
to be covered in the audit during the year and there
were no regulatory inspections of the quality of the
Company’s audit.
An explanation of the application of the Group’s
accounting policies is provided on pages 126 to 136.
Audit Committees and the External Audit:
Minimum Standard
The Financial Reporting Council’s Audit Committees and
the External Audit: Minimum Standard (the “Standard”)
applies to the Company on a comply or explain basis by
virtue of the Company’s status as a FTSE 350 constituent.
This Audit Committee report describes how, and the
extent to which, the Company has complied with the
provisions of the Standard (in particular the External
auditor, External auditor effectiveness and External
auditor independence sections of this report). There were
no shareholder requests for certain matters to be
covered in the audit during the year and there were no
regulatory inspections of the quality of the Company’s
audit. An explanation of the application of the Group’s
accounting policies is provided on pages 126 to 136.
Significant financial reporting issues
andareas of judgement
In preparing the financial statements, there are a number
of areas requiring the exercise by management of
judgement. The Committee’s role is to assess whether the
judgements made by management are reasonable and
appropriate. In order to assist in this evaluation, the CFO/
COO presents an accounting paper to the Committee
twice a year, setting out the key financial reporting
judgements, and other papers as required.
The main areas of judgement that have been considered
by the Committee in the preparation of the financial
statements are as follows:
Going concern and viability statement
The Committee reviewed management’s assessment of
viability and going concern.
The Committee considered the Group’s performance and
financial position and the forecast assumptions applied in
the approved budget and three-year plan. The Committee
also considered the Group’s financing facilities and future
funding plans. In making the going concern and viability
assessments, the Committee gave consideration to the
downside scenarios modelled given the uncertainties
surrounding the current challenging macroeconomic
environment. Based on this, the Committee concluded
that the assumptions applied are appropriate in both the
viability and going concern assessments, and confirmed
that the application of the going concern basis for the
preparation of the financial statements continued to be
appropriate, with no material uncertainties.
The Committee reviewed the process and assessment
of the Company’s prospects made by management in
support of its longer-term viability statement, including:
• the review period and alignment with the Company’s
internal plans and forecasts and with its work to
support the going concern basis of presentation for
thefinancial statements;
• the assessment of the capacity of the Company to
remain viable after consideration of future cash flows,
borrowings and mitigating factors; and
• the modelling of the potential financial impact of
certain of the Company’s principal risks materialising
using severe but plausible scenarios on the Company’s
financial performance.
The Committee received reporting from PwC on the work
undertaken to assess going concern and viability and
specifically discussed the content of the disclosures made
in the Strategic report on pages 64 and 65 and the basis
of preparation within Note 1 of the financial statements on
page 126.
The viability statement is set out in the Strategic report on
pages 64 to 65.
Inventory valuation
The Committee received a paper from management on
accounting for, and valuation of, inventory. It discussed
the judgements made by management, with specific
consideration given to inventory provisioning, including
provision for out-of-date, slow moving or obsolete
stock. The Committee also received reporting from
PwC regarding the audit work they performed over the
valuation of inventory. The Committee is satisfied that the
process and judgement adopted by management for the
valuation of inventory is sufficiently robust to establish
the value of inventory held and is satisfied as to the
appropriateness of the Company’s provisioning policy.
WH Smith PLC Annual Report and Accounts 2024
77
Strategic report Corporate governance Financial statements Additional information
Corporate governance report continued
Non-underlying items
The Committee considered the presentation of the
financial statements and, in particular, the presentation
of non-underlying items in accordance with the Group
accounting policy. This policy states that adjustments are
only made to reported profit before tax in determining
an alternative performance measure where items are
not considered part of the normal operations of the
business, are considered exceptional because of their size,
nature or cause of occurrence, as well as consistency with
prior periods. The Committee received detailed reports
from management outlining the judgements applied
in relation to the non-underlying costs incurred during
the year.
These costs were attributable to the impairment
charges and provisions for onerous contracts recognised
where carrying value of assets is not expected to be
recovered by the value-in-use; costs associated with
Board-approved programmes relating to supply chain
and IT transformation; costs associated with pensions;
costsrelating to M&A activity and Group legal entity
structure; and amortisation of acquired intangible assets.
This was a key area of focus for the Committee,
whichwas cognisant of the need to ensure that items
were appropriately classified and that the disclosure of
the non-underlying items was sufficient for users of the
financial statements to understand the nature and reason
for the items. The Committee challenged management on
the nature of items classified as non-underlying to ensure
that there was consistency of treatment compared to the
prior year. The Committee received reporting from PwC
on the work undertaken in respect of the classification of
non-underlying items.
Fair, balanced and
understandableassessment
At the request of the Board, the Committee has
considered whether, in its opinion, the 2024 Annual
Report and Accounts, taken as a whole, is fair, balanced
and understandable, and provides the information
necessary for shareholders to assess the Company’s
position and performance, business model and strategy.
The Committee was assisted in its review by a number
ofprocesses, including the following:
• the Annual report and accounts is drafted by senior
management with overall co-ordination by a member
of the Group Finance team to ensure consistency
acrossthe relevant sections;
• an internal verification process is undertaken to ensure
factual accuracy;
• an independent review is undertaken by the Director
of Audit and Risk to assess whether the Annual report
and accounts is fair, balanced and understandable
using a set of pre-defined indicators (such as
consistency with internally reported information and
investor communications);
• comprehensive reviews of drafts of the Annual report
and accounts are undertaken by the executive directors
and other senior management;
• an advanced draft is reviewed by the Board and the
Company’s Legal Director and, in relation to certain
sections, by external legal advisers; and
• the final draft of the Annual Report and Accounts is
reviewed by the Committee prior to consideration by
the Board.
Following its review, the Committee advised the Board
that the Annual Report and Accounts, taken as a whole,
was considered to be fair, balanced and understandable
and that it provided the information necessary for
shareholders to assess the Company’s position and
performance, business model and strategy.
Risk management and internal controls
The Committee monitors and regularly reviews the
effectiveness of the Group’s risk management processes
and internal financial and non-financial controls. The key
features of the risk management process that were in
place during the year are as follows:
• each business conducts risk assessments based on
identified business objectives, which are reviewed and
agreed annually by the management of each business.
Risks are considered in respect of strategy, reputation,
operations, financial and compliance and are evaluated
in respect of their potential impact and likelihood.
These risk assessments are updated and reviewed
quarterly and are reported to the Committee;
• a Group risk assessment is also undertaken by the Internal
Audit team, which considers all areas of potential risk
across all systems, functions and key business processes.
This risk assessment, together with the business risk
assessments, forms the basis for determining the Internal
Audit Plan. Audit reports in relation to areas reviewed are
discussed and agreed with the Committee;
• the Internal Audit team meets annually with all
senior executives, to undertake a formal review and
certification process in assessing the effectiveness of
the internal controls across the Group. The results of
thisreview are reported to the Committee;
• the Committee confirms to the Board that it has
reviewed the effectiveness of the systems of internal
control, including financial, operational, and compliance
controls and risk management for the period of this
report, in accordance with the Code and the Risk
Management and Internal Control Guidance;
• the Board is responsible for approving the annual budget
and the three-year plan, for approving major acquisitions
and disposals and for determining the financial structure
of the Company, including treasury and dividend policy;
• the Committee assists the Board in the discharge of
its duties regarding the Group’s financial statements,
accounting policies and the maintenance of
internal business, operational and financial controls.
The Committee invites input and attendance from
members of the senior management team of the Group
at its meetings to discuss the design and operation of
key business and internal controls and the assessment of
risks that affect the Group. The Committee provides a link
between the Board and PwC through regular meetings;
• the Company has in place internal control and risk
management systems in relation to the process for
preparing consolidated financial statements. The key
features of these systems are that management regularly
monitors and considers developments in accounting
regulations and best practice in financial reporting
and, where appropriate, reflects developments in the
consolidated financial statements. PwC also keeps
78
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
the Committee appraised of these developments; the
Committee and the Board review the draft consolidated
financial statements. The Committee receives reports
from management and PwC on significant judgements,
changes in accounting policies, changes in accounting
estimates and other pertinent matters relating to the
consolidated financial statements, and provides robust
and independent challenge to management where
appropriate; and the full year financial statements are
subject to external audit and the half-year financial
statements are reviewed by PwC;
• the Internal Audit team advises and assists
management in the establishment and maintenance
of adequate internal controls and reports to the
Committee on the effectiveness of those controls;
• there is a comprehensive system for budgeting and
planning, and for monitoring and reporting the
performance of the Company’s business to the Board.
Monthly results are reported against budget and
prior year, and forecasts for the current financial year
are regularly revised in light of actual performance.
These results and forecasts cover profit, cash flows,
capital expenditure and balance sheets; and
• routine reports are prepared to cover treasury activities
and risks, for review by senior executives, and annual
reports are prepared for the Board and Committee
covering tax, treasury policies, insurance and pensions.
The Director of Audit and Risk attends the meetings of
theCommittee to discuss the above matters.
External auditor
During the year, PwC reported to the Committee on
their independence from the Company. The Committee
and the Board are satisfied that PwC has adequate
policies and safeguards in place to ensure that auditor
objectivity and independence are maintained. PwC were
re-appointed as external auditor at the 2024 AGM,
followingacompetitive tender process.
Partner rotation
Jonathan Lambert has been the lead audit partner
since the start of 2019. At the end of the audit of the
financial year ended 31 August 2024, Jonathan Lambert
will have been in post for five years, meeting the term
limit according to the Auditing Practices Board’s Ethical
Standards. Following the completion of this year’s audit,
Jonathan Lambert will be replaced by Jon Sturges.
Jon Sturges shadowed the audit for the financial year
ended 31 August 2024.
The directors will be proposing the re-appointment
of PwC at the forthcoming AGM. The Committee will
continue to monitor the objectivity, effectiveness and
independence of PwC as external auditor.
External auditor effectiveness
In line with the Committee’s Terms of Reference, the
Committee undertook a thorough assessment of the
quality, effectiveness, value and independence of the
2023 financial year audit provided by PwC. The Director
of Audit and Risk prepared a questionnaire seeking
the views and feedback of the Board, together with
those of Group and divisional management, and it
formed the basis of further discussion with respondents.
Input was sought from Committee members and from
members of the management team on areas including
the auditor’s expertise, professionalism, independence
and challenge; their planning and audit approach and
whether the agreed audit plan had been met; the quality
and content of reporting and the outputs from the
audit; and governance of the audit including assessment
of team members’ performance and independence.
The findings of the survey were considered by the
Committee and concluded that PwC continued to
perform effectively and remains independent, andthat
the audit was of a sufficiently high standard. As a
result, PwC’sre-appointment as external auditor at the
forthcoming AGM is recommended to shareholders.
External auditor independence
The Committee has a formal policy on the Company’s
relationship with its external auditor in respect of
non-audit work to ensure that auditor objectivity and
independence are maintained. The policy is reviewed
annually by the Committee. The only significant non-audit
work undertaken by PwC in the financial year ended
31 August 2024 related to the interim review. The auditor
may only provide such services if such advice does not
conflict with their statutory responsibilities and ethical
guidance. The Committee made enquiries of PwC
and management and were satisfied that no such
conflict existed.
On behalf of the Committee, my approval is required
before the Company uses PwC for non-audit services
as specifically set out in the policy, or if the fees exceed
£25,000 per matter. The Committee is satisfied that it was
compliant during the year with its policy in respect of the
scope and maximum level of permitted fees incurred for
non-audit services provided by PwC. For the financial year
ended 31 August 2024 the non-audit fees paid to PwC
were £131,000, of which £130,000 related to the interim
review, and the audit fees payable to PwC were £1,640,000.
The Company has complied during the financial year
under review, and up to the date of this report, with the
provisions of the CMA Statutory Audit Services Order 2014.
Finally, this is my last letter to you as Chair of the
Committee. Having been appointed as Chair of the
Remuneration Committee on 7 February 2024, I will
be stepping down as Chair of the Committee on
30 November 2024 and handing over to Helen Rose,
whowill take up the position on 1 December 2024.
Helen Rose is a chartered accountant and former
senior finance and operations leader with considerable
experience in financial services. I will be available at the
Annual General Meeting to answer any questions about
the work of the Committee.
Nicky Dulieu
Chair of the Audit Committee
14 November 2024
WH Smith PLC Annual Report and Accounts 2024
79
Strategic report Corporate governance Financial statements Additional information
Corporate governance report continued
Nominations Committee report
Dear Shareholder
As Chair of the Nominations Committee, I am pleased to
present my report on the activities of the Nominations
Committee for the financial year ended 31 August 2024.
The Committee’s principal responsibility is to ensure that
the Board comprises individuals with the requisite skills,
knowledge, independence and experience to ensure
that it is effective in discharging its responsibilities and
ensure that appropriate procedures are in place for the
nomination, selection and succession of directors and
senior executives.
The other Committee members are Colette Burke,
NickyDulieu, Simon Emeny, Situl Jobanputra and Helen
Rose, who are all independent non-executive directors.
In the event of any matters arising concerning my
membership of the Board, I would absent myself from
the meeting as required by the Code and the Senior
Independent Director would take the Chair.
The Committee met five times during the year.
The principal matters discussed at the meetings were
succession planning for Board and senior executives,
career planning, identifying talent across the businesses
and reviewing the work that has been undertaken in
respect of improving diversity in the Company’s senior
leadership group. The Committee, as part of the Board’s
succession plan, appointed Russell Reynolds Associates
to assist in the identification of potential candidates to
replace Robert Moorhead as CFO and in the appointments
of Situl Jobanputra and Helen Rose as non-executive
directors. Russell Reynolds Associates have signed up to the
voluntary code of conduct for executive search firms and
had no other connection to the Company or its directors.
In March 2024, the Company announced that Robert
Moorhead would be stepping down from the Board on
30 November 2024. He will remain as an employee of the
Company until 28 February 2025 in order to assist with
the transition to Max Izzard as CFO. Max Izzard joined
the Company on 1 September 2024 as CFO Designate
and will be appointed to the Board with effect from
1 December 2024.
The Committee keeps itself updated on key developments
relevant to the Company, including on the subject of
diversity and inclusion. Further information on diversity
and inclusion can be found on pages 54 and 55.
The Board believes in creating, throughout the Company,
a culture free from discrimination in any form and is
proud of its long history of being regarded as a responsible
and respected employer. The Board believes that the
benefits of a diverse workforce will help the Company
achieve its strategic objectives.
The Committee is fully committed to supporting
diversity and inclusion at Board and senior executive
level in compliance with the Code and recognises the
importance of diversity in effective decision making.
The long-term aim is to increase the diversity of our Board.
The importance of diversity extends beyond the Board
to senior management and throughout the Company.
The Committee monitors the progress made to increase
diversity at Board and senior management levels and
compliance with the three UK Listing Rules targets for
gender and ethnic diversity.
During the year under review, the Company had 50
per cent women on the Board and 23 per cent in the
senior leadership team. The Board is committed to
strengthening the pipeline of women in senior roles
across the business and an action plan has been agreed
totake further steps to improve workplace diversity.
“The Committee
will continue to
focus on succession
planning and talent
management
for key roles in
thebusiness.”
Annette Court
Chair of the Nominations Committee
80
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
The Company requires gender balanced shortlists for all
internal and external recruitment at a senior executive
level to ensure that we attract more women at a senior
level. Further information on the gender balance of those
in senior management and their direct reports is set out in
the Strategic report on page 55.
The Board recognises that diversity is not limited
to gender, but includes skills, experience, ethnicity,
disability and sexual orientation. The Board is committed
to having a diverse and inclusive leadership team
and will monitor ethnic diversity across the Group.
During the year, theCompany complied with the
recommendations of theParker Review. Actions include
the provision of mentoring, as well as focused initiatives
to better understand the challenges faced by under-
represented groups employed within the Company.
The Company’s recruitment policy requires that for all
senior management roles there must be a shortlist,
which includes at least one candidate from an ethnic
minority background. We will continue to appoint on
merit, whileaiming to broaden the diversity ofthe
talent pipeline.
The Company has a Diversity and Inclusion Committee
consisting of employees from across the Group
together with the Group Chief Executive and the Chief
People Officer. The committee met seven times during
the financial year ended 31 August 2024 and made
recommendations on recruitment and engaged with
our customers and employees to mark cultural and
diversity-related events during the year. The work of the
Diversity and Inclusion Committee is reported to the
ESG Committee.
Further information on diversity is set out in the
Employees section of the Strategic report on
pages54to55.
The Committee will continue to focus on succession
planning and talent management for key roles across
the Group, to ensure the Company develops a pipeline of
high-quality internal candidates for senior management
roles. Work is being undertaken to ensure succession
arrangements are in place for Board members and
key management.
The latest Board evaluation report confirmed that the
culture of the Board is excellent, being very open and
collaborative with the appropriate level of challenge,
discussion and debate. The Board continues to have
a broad mix of skills, diversity, experience and talent,
whichenables the Board and the Committees to work
effectively. Details of the Board evaluation, which took
place in June and July 2024, are set out on pages 72
and 73.
Annette Court
Chair of the Nominations Committee
14 November 2024
WH Smith PLC Annual Report and Accounts 2024
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Corporate governance report continued
ESG Committee report
Dear Shareholder
As previously announced, I was appointed as Chair of the
ESG Committee on 1 March 2024 following Marion Sears
stepping down from the Board. I am pleased to present
the report on the activities of the ESG Committee for the
financial year ended 31 August 2024.
Environmental and social sustainability is an integral
part of the way in which the Group operates and is
an important component of its longer-term success.
The Committee oversees the governance of sustainability
activities, reviewing and approving the Company’s ESG
strategy, policies and performance.
Committee’s responsibilities
The Committee’s responsibilities include:
• Ensuring the Company has an appropriate and effective
ESG Strategy that is integrated with the core business
strategy, and is aligned with the purpose, culture and
values of the Company.
• Ensuring that appropriate governance is in place for
successful execution across the three pillars of the
sustainability strategy (planet, people and community).
• Ensuring the sustainability strategy is embedded across
all parts of the WH Smith Group.
• Setting short, medium and long-term ESG targets
and key performance indicators and monitoring
performance and progress towards delivery of those
targets on a regular basis.
• Providing support and guidance to management on
sustainability matters, as appropriate.
• Monitoring the Company’s engagement with
stakeholders including customers, colleagues,
suppliers, communities, investors and government
onsustainability and corporate responsibility matters.
• Monitoring external developments on sustainability.
• Approving the Company’s sustainability disclosures
in the Annual Report and overseeing any other
information for third parties including investors,
proxyagencies and advisory bodies.
• Reviewing coverage in relation to external standards
and ongoing compliance of the Company’s policies,
principles and standards in so far as they relate to
ESG matters.
Membership and attendance
The Committee comprises a majority of independent
non-executive directors. The members of the Committee
are Colette Burke, Carl Cowling, Nicky Dulieu, Simon
Emeny and Helen Rose. The Chair, Group Sustainability
Director and Chief People Officer also attend, alongside
others from across the Company when needed.
The Committee met three times during the year, receiving
inputs from senior managers across the business and
regular updates from the ESG Steering Committee, which
is chaired by the Group Chief Executive. It works closely
with the Audit and Remuneration Committees onrelevant
ESG matters.
“Our commitment to
sustainability is a key
part of our purpose and
how we deliver for our
shareholders, customers,
landlordpartners
andemployees.”
Situl Jobanputra
Chair of the ESG Committee
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Corporate governance
Work of the Committee during 2024
The Committee discharged its responsibilities to ensure
WHSmith has an appropriate and effective ESG strategy
by assessing the priorities, risks, actions and measures
in place to enable appropriate management and
reporting. This work takes place annually and informs
the Committee’s review of the Company’s sustainability
strategy, including whether it addresses the most material
issues and whether targets are appropriate for achieving
the necessary outcomes. The Committee reviewed
objectives and action plans against the three ESG pillars of
Planet, People and Community and assessed progress for
the financial year.
A standing item on the Committee agenda is a review
and discussion of any stakeholder engagement in
relation to ESG matters. This includes any meetings or
correspondence that has taken place with investors,
proxyagencies and rating schemes and key business
partners such as landlord partners, franchisees and major
suppliers. This year, the key topics raised were in relation
to the Company’s response to, and progress against,
its targets in relation to net zero, workforce policies and
programmes and management of labour rights in the
supply chain.
The Committee received a presentation from the
global sustainability head of one of its financial advisors
on investor attitudes and perspectives towards ESG,
thesustainable investment market and opportunities
forWHSmith with ESG-focused funds.
The Company has a target to be net zero by 2050, reduce
Scope 1 and 2 emissions by 80 per cent by 2030 from a
2020 baseline and ensure that 75 per cent of supplier
emissions are covered by science-based targets by 2027.
The Committee received an update on the Company’s
progress towards these targets and its plans for
transitioning to a low-carbon economy. The Sustainability
Director provided an update on carbon-related legislation
and standards, including the International Sustainability
Standards Board standards and their adoption by the UK’s
Financial Conduct Authority and the recommendations
of the Carbon Transition Taskforce. The Committee
reviewed the Company’s risks and opportunities related
to climate change, short-term and longer-term net zero
targets and the associated action plans to reduce Scope 1,
2 and 3 emissions. The Committee were also updated and
provided feedback on the Company’s plans and progress
in engaging with suppliers to encourage them to adopt
science-based targets and develop carbon reduction
plans. More details are provided on pages 43, 48 and 52.
The Committee continued to monitor the Company’s
progress on complying with the Listing Rules requirement
to make disclosures consistent with the Task Force
on Climate-related Financial Disclosures (“TCFD”)
recommendations and recommended disclosures,
andthe Companies Act 2006 requirements in relation
toclimate-related financial disclosures.
The Company has made good progress this year on
strengthening its due diligence processes in relation
to human rights and labour conditions in the supply
chain. The Committee reviewed the work undertaken
in collaboration with the UN Global Compact and the
not-for-profit advisory organisation Shift to reassess and
update WHSmith’s salient human rights risks. WHSmith’s
Responsible Sourcing Requirements for its suppliers
and business partners were updated and approved by
the Committee and an update was provided of the work
undertaken to introduce a more robust due diligence
process at the supplier onboarding stage and for products
which do not carry a Group brand name (see page 56).
The Committee received updates on the Group’s
Diversity, Equity and Inclusion programme, including
the work of the DEI networks, executive sponsorship
and work with external organisations such as Diversity
in Retail and Stonewall. The Committee reviewed the
Company’s submission to the Parker Review request
for information on the ethnic diversity of boards and
senior management. An update on the Company’s
wellbeing and mental health programme was included
as part of the same paper. The Committee reviewed the
Company’s approach to Modern Slavery due diligence
and recommended to the Board approval of the Group
Modern Slavery statement.
In January, the Committee reviewed and discussed
the Company’s approach to community engagement,
bothin the UK and internationally. It was updated on the
work that is being undertaken in partnership with the
National Literacy Trust in respect of the Young Readers
Programme, and the financial support for proactive work
on improving early years communication in communities
close to our head office in Swindon. Committee members
heard of the work of the Trust to empower children and
young people to develop the literacy skills they need to
succeed in life, and how WHSmith is supporting the work
of the Trust with early years and primary school children.
The Committee were also updated on our charity work in
North America where the US business has a longstanding
partnership with Miracle Flights, a non-profit organisation
providing commercial flights for children in need of
life-saving medical care; and in Australia where a new
charity committee has been established and a new charity
partnership established with Beyond Blue, a mental
health charity.
As in 2024, ESG performance metrics will form part
of the Long-term Incentive Plan for awards in 2025.
In reviewing the ESG strategy and ensuring that
objectives and targets are appropriate for driving
improvement, theESGCommittee provided support to
the Remuneration Committee in choosing appropriate
measures, which are set out on page 106.
WH Smith PLC Annual Report and Accounts 2024
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Strategic report Corporate governance Financial statements Additional information
All ESG-related policies, covering Company activity in
relation to issues such as the environment, healthand
safety, human rights, anti-bribery and corruption,
andemployee and supplier codes of conduct are reviewed
and updated annually. The ESG Committee reviewed all
policies and approved changes to the Sustainable Forestry
Policy to include wider issues in relation to Biodiversity;
and changes to the Responsible Sourcing Standards to
make our expectations clearer for suppliers of third-party
products. A new Company policy on Diversity, Equity and
Inclusion was also approved.
Priorities for 2025
Over the next year, I look forward to the Committee’s
continued oversight of, support for, and scrutiny of the
Group’s ESG agenda, including further presentations
fromsenior executives and experts from across the Group.
During 2025, in addition to regular reviews covering
emerging issues and materiality, and sustainability
strategy, action plans and targets, the Committee will
receive updates and review the following:
• Progress on net zero, carbon transition plans and targets
for Scope 1 and 2 emission reductions and supplier
targets for Scope 3 emissions;
• A review of waste management and the Group’s
approach to single-use plastic;
• Further evolution of due diligence for worker rights
inWHSmith’s supply chain;
• The Group’s strategy for community engagement
andcharitable support;
• Nature-related risk management and any
developments in required disclosures; and
• Emerging requirements for ESG reporting particularly
in relation to the UK, EU and North America, including
implications of the EU’s Corporate Sustainability
Reporting Directive.
Situl Jobanputra
Chair of the ESG Committee
14 November 2024
Corporate governance report continued
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Corporate governance
Directors’ remuneration report
Annual statement from the
Remuneration Committee Chair
Dear Shareholder
On behalf of the Remuneration Committee (the
“Committee”), I am pleased to present the Directors’
remuneration report for the financial year ended
31 August 2024, which is in line with the Company’s
approved Directors’ remuneration policy. This report
covers three areas:
• the forward-looking Directors’ remuneration policy
(“Policy”), which is subject to a binding shareholder
voteat our 2025 AGM as set out on pages 90 to 98;
• the annual Directors’ remuneration report (“Report”)
setting out details of the implementation of our current
Policy in the financial year ended 31 August 2024 as
set out on pages 85 to 109. This report (excluding the
Directors’ remuneration policy) is subject to an advisory
vote at our 2025 AGM; and
• an explanation of how the proposed Policy will be
implemented in the financial year ending 31 August
2025 as set out on pages 100 and 101.
Directors’ remuneration policy review
Our current Policy, which was supported by 88 per cent of
our shareholders at the 2022 AGM, is approaching the end
of its three-year term. During 2024, the Committee has
reviewed the current Policy in the context of shareholder
feedback in recent years, as well as broader governance
and market developments in executive remuneration,
including the ongoing debate as to how UK companies
can successfully compete for leading global talent.
The Committee also considered during its review
whether the current Policy was aligned to the
Company’s remuneration philosophy, which is to
provide at, or below, median market levels of fixed pay,
but with the opportunity to earn upper quartile levels
of total remuneration if the executive directors deliver
superior performance.
The comprehensive review of the current Policy included
consultation with major shareholders representing
c.65 per cent of our issued share capital and three
proxy agencies.
The Committee’s conclusion was that, overall, the Policy,
which has served the Company well for many years
continues to do so and continues to support our key
strategic goals. Consequently, no significant changes are
proposed to the Policy although the Committee will keep
the appropriateness of our remuneration arrangements
under close review as our strategy of global expansion
continues to develop.
For the purposes of the new Policy, the proposed changes
aim to provide greater flexibility over the life of the Policy
and bring specific elements of the Policy more in line with
standard market practice. Details of those changes are
outlined on pages 88 and 89.
2024 salary review
Following the annual salary review in March 2024,
themajority of the Group’s employees (who are based
instores) received an 8 per cent pay increase, head office
employees received either a 3 or 4 per cent pay increase
and senior executives, including Robert Moorhead,
received a 2.5 per cent pay increase with effect from
1 April 2024.
“The Company believes
that its approach to
remuneration has served
the Company well and is in
keeping with the Company’s
culture that promotes value
creation in a responsible
and sustainableway.”
Nicky Dulieu
Chair of the Remuneration Committee
WH Smith PLC Annual Report and Accounts 2024
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Strategic report Corporate governance Financial statements Additional information
Review of CEO’s remuneration
As part of the Policy review, the Committee reviewed
the executive remuneration arrangements of the CEO,
CarlCowling, against a range of factors. A key factor for
the Committee was the continuing strong performance
of the Company as demonstrated by the consistent
year-on-year growth in Headline Group profit before
tax
1
and dividends. Further information regarding the
Company’s performance can be found in the Strategic
report on pages 3 to65.
Another key factor was relevant data comparators.
While the Committee uses benchmarking with caution,
an up-to-date benchmarking exercise was performed
to check on the pay positioning of the CEO against
two relevant peer groups; a group of FTSE companies
within the retail and/or travel industries; and companies
in the top half of the FTSE 250. This exercise indicated
that the CEO’s salary was positioned towards the lower
quartile of the peer groups and total compensation
for superior performance was positioned around
median. This is inconsistent with our pay philosophy of
providing an opportunity to earn upper quartile levels
of total remuneration if the executive directors deliver
superior performance.
Having considered these various factors and also the fact
that Carl Cowling’s performance continues to be excellent,
the Committee agreed to increase Carl Cowling’s base
salary by 7.5 per cent to £670,800 with effect from 1 April
2024. Following the increase, Carl Cowling’s revised salary
is still well below the market median. The Committee also
agreed to increase Carl Cowling’s Long-term Incentive
Plan (“LTIP”) grant from 335 per cent to 350 per cent of
salary (within the existing limit in the Policy) for the grant
of awards in November 2024. This will mean that his total
potential remuneration for superior performance sits
between the median and upper quartile external data
comparators, which brings his remuneration closer to,
albeit still not fully in line with, our pay philosophy.
While we understand the sensitivity about making
executive salary increases, we are mindful that Carl
Cowling has one of the lowest salaries in the Retail
sector and we feel it is important to ensure that our
remuneration arrangements continue to support
the long-term strategy to create shareholder value,
enableus to recruit and retain high calibre executives
andappropriately reward Carl Cowling for his experience
and performance since his appointment.
Annual bonus for the financial year
ended 31 August 2024
For the financial year ended 31 August 2024, the financial
bonus target was Headline profit before tax and
non-underlying items
1
. The Group’s Headline profit before
tax and non-underlying items
1
for the financial year ended
31 August 2024 was £166m compared to £143m for the
financial year ended 31 August 2023.
This good performance resulted in approximately 2,393
employees across the Group receiving a bonus under
the annual bonus plan for the financial year ended
31 August 2024.
The Company’s long-standing approach to determining
executive bonus out-turns is to consider the Headline
profit before tax
1
against a pre-set range. No adjustments
were made to the targets originally set. Once the
financial element has been assessed, this essentially
becomes the maximum bonus that may be awarded in
normal circumstances with each executive’s personal
performance then considered using the standard grading
system applied on a Company-wide basis.
The Group’s Headline profit before tax and non-underlying
items
1
of £166m represented strong year-on-year growth
and delivered a bonus between target and maximum
in the pre-set range. Each of the two executive directors
were assessed as “Role Models”, which led to the formulaic
financial out-turn being applied without any reduction
on the basis of their personal performance. As a result of
this performance, each of the executive directors were
awarded 82.5 per cent of their maximum bonus potential.
This resulted in Carl Cowling receiving a bonus payment
of £884,383 of which £367,867 will be deferred into shares
and Robert Moorhead receiving a bonus payment of
£636,934 of which £264,938 will be deferred into shares.
The deferred shares are released over three years and then
retained if the director has not met the Company’s share
ownership guidelines. Having considered overall Company
performance and stakeholder alignment (discussed
below), the Committee determined that the formulaic
out-turn under the annual bonus plan was appropriate
and should be applied without discretionary adjustment.
More details on the financial targets and assessment of
the executive directors’ performance against personal
objectives are set out on pages 103 and104.
2021–2024 LTIP vesting outturn
The 2021 LTIP vesting percentage is determined by the
growth in the Company’s Headline earnings per share
1
(“EPS”) and relative Total Shareholder Return (“TSR”)
over the three-year performance period, which ended
on 31 August 2024. The Company substantially met the
performance targets for the 2021 LTIP as the Company’s
Headline earnings per share
1
(before tax) was 112p and
the Company’s TSR ranked between median and upper
quartile in the comparator group. Consequently, 71 per
cent of the award will vest in November 2024. More details
are set out on page 106.
The Committee determined that the formulaic out-turn
under the LTIP was appropriate in the context of the
Company’s and executive directors’ performance over
the performance period and stakeholder alignment
(discussed overleaf) and should be applied without
discretionary adjustment. The Committee also considered
whether the award should be adjusted for windfall gains
and concluded that no adjustment was required.
Directors’ remuneration report continued
1 Alternative performance measure defined and explained in the Glossary on page 173
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WH Smith PLC Annual Report and Accounts 2024
Corporate governance
Stakeholder alignment
After considering the experience of each of our stakeholder
groups during the financial year ended 31 August 2024,
the Committee believes that the remuneration of the
executive directors is proportionate and appropriate.
In making this determination, the Committee considered
the following factors:
• The financial performance of the Group has been
strong. The Group made a Headline profit before tax
and non-underlying items
1
of £166m (2023: £143m).
• We have continued to make significant progress on
the Group’s strategic objectives and are well placed to
generate growth in the global travel market.
• We supported our workforce. The majority of the
Group’s employees (who are based in stores) received an
8 per cent pay increase, head office employees received
a 3 or 4 per cent pay increase and senior executives
(other than the CEO as set out previously) received a 2.5
per cent pay increase with effect from 1 April 2024.
• Positive feedback was received following employee
engagement on remuneration.
• Continued support was given to local communities
and charitable activity. You can read more about the
Company’s work on page 38.
• The directors have proposed a final dividend of 22.6p per
share, which together with the interim dividend of 11.0p
per share paid in August 2024 makes a total dividend of
33.6p per share for the financial year ended 31 August
2024 (2023: 28.9p).
Shareholder engagement
We were delighted that the Company received 97 per
cent support from shareholders for the Remuneration
Report at the AGM in January 2024.
During the year, the Committee consulted with our
largest shareholders and their representative bodies on
the Company’s approach to remuneration, includingthe
proposed changes to the CEO’s remuneration and changes
to the new Policy. I am grateful to all those who took
the time to provide feedback, which was, in most part,
supportive of the approach adopted by the Committee.
The feedback was informative for the Committee when
finalising the Company’s remuneration policy, which will
be considered by shareholders at the forthcoming AGM.
As a result, the Committee made changes to the proposal
in respect of bonus deferral requirements where an
executive has met their shareholding requirement as set
out in the Policy.
Chief Financial Officer (“CFO”) transition
As announced on 15 March 2024, Robert Moorhead will
retire as CFO/COO on 30 November 2024 and will be
replaced as CFO by Max Izzard. Robert Moorhead will
remain as a WHSmith employee until 28 February 2025
inorder to assist with the transition to Max Izzard as CFO.
Robert Moorhead will continue to receive his salary and
contractual benefits up to 28 February 2025. There will
be no payment in lieu of notice. Having considered
Robert Moorhead’s outstanding contribution to the
Company and the retirement nature of his departure,
the Committee determined that he should be treated
asa good leaver, inline with the Policy, for the purpose
ofincentive awards as follows:
• Future incentives – As he will remain an important
contributor to Company performance in the coming
year, Robert Moorhead will be eligible for a time
pro-rated bonus up to the end of his employment for
the financial year ending 31 August 2025, which will be
assessed and paid at the normal dates. He will not be
eligible to receive an LTIP award in November 2024.
• Deferred Bonus Plans – Robert Moorhead will receive
his outstanding awards under the DBP on the original
vesting dates in accordance with the plan rules.
• LTIP shares – Robert Moorhead’s outstanding awards
will be time pro-rated up to the end of his employment
and remain subject to performance testing on the
original dates. Any vested shares will remain subject
toatwo-year holding period.
In line with the Policy, Robert Moorhead will be required
to maintain a minimum shareholding requirement of 250
per cent of base salary for a period of two years after he
leaves the Company.
Upon joining the Company on 1 September 2024,
MaxIzzard’s base salary was £450,000 and his pension
allowance was 3 per cent of base salary (aligned to the
wider workforce rate). He also became eligible to receive
a maximum annual bonus of up to 150 per cent of salary
and an annual LTIP award of 300 per cent of salary in the
financial year ending 31 August 2025.
Max Izzard has also been granted certain cash and
share awards to compensate him for incentives from his
previous employer, which were forfeited on joining the
Company. These buy-out awards take into account all
relevant factors, including the form, value and vesting
time frame of the forfeited awards. Details of the buy-out
awards are on page 100.
Other remuneration details for the
financial year ending 31 August 2025
Salaries for the executive directors are, as with the rest
of the UK workforce, reviewed with effect from April
each year and no decision has been taken regarding
anypotential increase from April 2025.
Over the last few years, the performance measures for the
LTIP have been 40 per cent linked to EPS, 40 per cent to
relative TSR and 20 per cent to ESG. Given the importance
of this forthcoming period to the Company’s strategic
development, the Committee has determined that LTIP
metrics for the next award cycle should be more strongly
linked to our longer-term financial targets and returns to
shareholders. Accordingly, for the LTIP grant in November
2024, the performance measures will be:
• 45 per cent pre-tax EPS;
• 45 per cent relative TSR; and
• 10 per cent ESG – the ESG performance measures will
bebased on a reduction in the Company’s Scope 1, 2
and 3 emissions.
1 Alternative performance measure defined and explained in the Glossary on page 173
WH Smith PLC Annual Report and Accounts 2024
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Strategic report Corporate governance Financial statements Additional information
Details on the targets for these measures are on page 106.
Management remain incentivised to deliver the Group’s
ambitious ESG strategy through a combination of the ESG
element of both the 2024 and previously granted in-flight
LTIP awards.
Conclusion
The Group’s strong financial performance has allowed us
to continue to support our colleagues, local communities
and charitable activities, and recommend the payment of
a final dividend of 22.6p per share. Accordingly, and taking
into account stakeholder experience, we consider the total
remuneration earned by the CEO and CFO/COO to be
appropriate and well deserved.
In the current year we will continue to support colleagues
with competitive pay and listen carefully to feedback
through continued engagement. We will work hard to
ensure that we deliver continued business growth for the
benefit of all stakeholders.
I look forward to receiving your support at our 2025 AGM
for our remuneration resolutions where I will be available
to respond to any questions that shareholders may have
on this report.
Nicky Dulieu
Chair of the Remuneration Committee
14 November 2024
This Directors’ remuneration report has been prepared in
accordance with the Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations 2008,
as amended in 2013, 2018 and 2019 (the “Regulations”),
LR 6.6 of the UKLA Listing Rules and the UK Corporate
Governance Code 2018 (the “Code”).
1. Information subject to audit
The following information has been audited by PwC:
• Section 4.5 – Summary of non-executive directors’
remuneration 2024;
• Section 4.6 – Summary of executive directors’
remuneration 2024;
• Section 4.7 – Payments made to former directors;
• Section 4.8 – Payments for loss of office;
• Section 4.10 – Annual bonus targets;
• Section 4.14 – Share plans; and
• Section 4.17 – Directors’ interests in shares.
2. Background to Directors’
remuneration policy
The Company’s Directors’ remuneration policy
(the“Policy”) can be summarised as typically providing
at, or below, the median of market levels of fixed pay
butwith the opportunity to earn upper quartile levels of
remuneration if the executive directors deliver superior
returns for shareholders.
Executive remuneration packages are structured so
that they:
• are aligned to the Company’s strategy to deliver
shareholder returns and promote its long-term success;
• are competitive and provide a very clear bias to variable
pay with stretching and rigorous performance measures
and conditions;
• do not promote unacceptable behaviours or encourage
unacceptable risk taking;
• include robust malus/clawback provisions; and
• take into account Company-wide pay and
employment conditions.
During 2024, the Committee undertook a thorough
review of the current Policy to ensure that it continued to
support delivery of the business strategy and remained
compliant with all key remuneration requirements of the
UK Corporate Governance Code and emerging practice.
Following that review, we propose to only make relatively
minor changes which will provide greater flexibility over
the life of the proposed Policy and bring specific elements
of the Policy more in line with standard market practice.
The most notable of these changes are as follows:
• Annual bonus deferral – Our key means for ensuring
alignment of executive directors’ interests with
shareholder interests is the above market shareholding
guideline requirement of 300 per cent of salary
(CEO)/250 per cent of salary (other executive directors)
that applies both in-employment and for two years
post-employment. Accordingly, the Committee has
concluded that, if a director is already compliant with
these guidelines, the requirement to defer bonus
into shares can be reduced to 25 per cent of bonus
earned above target. Minimum deferral into shares will
remain at 100 per cent of bonus earned above target
if an individual is not compliant with their guideline.
The Committee is satisfied that this arrangement
aligns with corporate governance principles for UK plc
companies around shareholder alignment in a manner
that is appropriate for WHSmith. The Committee also
considered the operation of malus and clawback
following this change and noted that it would be able
to cancel any in-flight LTIP awards and also prevent
the exercise of awards that have vested but are subject
to the two-year holding period. The new Policy will
also include flexibility to defer bonus in cash rather
than shares in exceptional circumstances – this might
be applied, for example, where there are dealing
restrictions, which prohibit the award of shares.
• Salary cap – The current Policy contains a monetary
(£) cap for executive director base salaries, which
automatically increases in line with RPI. The review
noted that only a very small minority of FTSE companies
have a salary cap of this nature in their Policy. In order
to bring the Policy in line with standard market practice
and to avoid building expectations of inflationary
increases into future salary discussions, we propose to
remove this cap in the new Policy. The Committee’s
general approach will remain to keep salaries at,
orbelow, median.
Directors’ remuneration report continued
88
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
• Benefits cap – The current Policy also contains a
monetary (£) cap for executive director benefits which,
similar to the previous points, is highly unusual and
(at £80,000) is well above the actual level of benefits
awarded. To bring the Policy in line with market
norms, we therefore propose to remove this cap in
thenew Policy.
• Recruitment Policy – The new Policy will clarify that
the Committee has flexibility to buy-out any element of
compensation in relation to appointment (for example,
where benefits are provided in a country that cannot
be easily replicated in the UK). Also flexibility will be
included to allow non-executive directors (“NEDs”) to
bepaid as an executive director should they be required
to temporarily take on an executive position.
• Loss of office policy – Minor amendments in the new
Policy will permit the Committee flexibility to determine
the form (cash/shares) and basis of calculation
(inrelation to the performance period and measures)
of a departing executive director’s annual bonus in a
manner appropriate to the particular circumstances
(albeit any such bonus will continue to be time
pro-rated and subject to performance measures).
• NED fees – The new Policy will include flexibility to
pay additional non-executive director fees if their role
should require significant additional time commitment
and flexibility for the provision of additional travel
allowance payments to them for time spent travelling
on Company business. There will also be additional
flexibility to meet the costs of providing any tax advice
and tax return assistance for international NEDs and
provide any other appropriate benefits.
As part of its review of the Policy, the Committee has
considered the factors set out in Provision 40 of the
Code. The Committee believes that the proposed Policy
addresses those factors as set out below:
Simplicity The Policy and our approach to its implementation are simple, appropriately designed and well
understood, reinforcing the Group’s culture as well as strategy.
The Committee reviews performance metrics and targets each year to ensure that they
continue to be clear and aligned to delivery of the strategy.
Predictability The Policy and remuneration structure have been broadly consistent over many years and the
performance measures used in the incentive plans are well aligned to the Group’s strategy and
goals, with stretching targets, the maximum outcomes under any award are clearly stated and,
therefore, predictable.
Proportionality The balanced approach is proportionate and drives behaviours that promote high performance
and sustainable growth to deliver the long-term success of the Company for the benefit of all
stakeholders, without encouraging or rewarding excessive risk-taking.
The Committee retains sufficient discretion to adjust formulaic incentive outcomes or require
the repayment of previous awards to ensure that poor performance is not rewarded.
Risk The Committee reviews and sets performance targets each year to ensure that they drive the
right behaviours and are appropriately stretching without encouraging unnecessary risks.
Risk management is operated through annual bonus deferral, LTIP holding periods and
required shareholding and post-employment shareholding.
Malus and clawback provisions apply to the annual bonus, DBP and LTIP.
Clarity The Committee maintains a continual dialogue with shareholders and proxy agencies to
understand their views. We consulted with shareholders on remuneration arrangements,
listening to, and taking into account, the feedback we received when developing the Policy.
Our approach to disclosure is transparent with clear rationale provided on its maintenance
andany changes to policy.
When considering remuneration for executive directors and senior management,
theCommittee takes into account the pay and conditions of employees across the Group
and,where appropriate, exercises oversight of remuneration throughout the Company.
Alignment to culture The Committee assesses performance under the annual bonus plan against a range of
objectives, including those related to our values and strategy.
The inclusion of ESG targets in the LTIP further helps to ensure incentive schemes drive
behaviours consistent with Company purpose, values and strategy.
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3. The Directors’ remuneration policy
The Committee presents the Policy, which will be put to a binding vote at the forthcoming Annual General Meeting
and,subject to shareholder approval, will take immediate effect.
3.1 Executive directors Policy table
The following table explains the different elements of remuneration we pay to our executive directors:
Element and purpose Operation and opportunity Performance measures
Base salary
This is the basic
element of pay and
reflects the individual’s
role and position
within the Group, with
some adjustment to
reflect their capability
and contribution. Base
salary is used to attract
and retain executive
directors who can
deliver our strategic
objectives and create
shareholder value.
Base salaries, paid monthly in cash, are typically
reviewed annually with any changes normally taking
effect from 1 April.
The Company’s policy is not to automatically award
an inflationary increase. When reviewing salaries,
the Committee takes into account a range of factors
including the Group’s performance, market conditions,
the prevailing market rates for similar positions in
comparable companies, the responsibilities, individual
performance and experience of each executive director
and the level of salary increases awarded to employees
throughout the Group.
Base salaries are benchmarked against relevant
comparators, which may include FTSE 250 companies
and other leading retailers. While the Committee applies
judgement rather than setting salaries by reference to
a fixed percentile position, its general approach is to
constrain base salaries to a median or lower level.
No absolute maximum has been set for executive
director base salaries. While in the normal course,
their salaries would not be expected to increase at a
rate greater than the average salary increase for other
head office staff, larger increases may be considered
appropriate in certain circumstances (including, but not
limited to, a change in an individual’s responsibilities or
in the scale of their role, or in the size and complexity
of the Group). Larger increases may also be considered
appropriate if an executive director has been initially
appointed to the Board at a lower than typicalsalary.
Any salary review will take into
account Group performance and
individual performance, contribution
and increasing experience.
Benefits
To provide other
benefits valued by the
recipient which assist
them in carrying out
their duties effectively.
Competitive benefits
assist in attracting
and retaining
executivedirectors.
Benefits received by executive directors currently
comprise a car allowance, staff discount, private medical
insurance and life assurance. The Committee may agree
to provide other benefits as it considers appropriate.
There is no formal maximum as benefit costs can
fluctuate depending on changes in provider, cost and
individual circumstances.
The Company may periodically amend the benefits
available to staff. The executive directors would normally
be eligible to receive such amended benefits on similar
terms to all senior staff.
The Committee reserves the right to pay relocation costs
in any year or any ongoing costs incurred as a result of
such relocation to an executive director if considered
appropriate to secure the better performance by an
executive director of their duties. In the normal course,
such benefits would be limited to two years following
a relocation.
The Committee has the ability to reimburse reasonable
business-related expenses (including corporate
hospitality) and any tax thereon.
None.
Directors’ remuneration report continued
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Element and purpose Operation and opportunity Performance measures
Pension
To aid retention
and remain
competitive within
the marketplace
by providing an
appropriate level of
retirement benefit.
All executive directors are eligible to participate in the
Company’s defined contribution pension plan and/or
receive a salary supplement in lieu (which is not taken
into account as salary for calculation of bonus, LTIP or
other benefits).
Pension contributions (or cash in lieu) for executive
directors are aligned with the average rate available to
UK-based colleagues more generally – currently 3 per
cent of salary but subject to periodic review.
None.
Annual bonus
To motivate
employees
and incentivise
delivery of annual
performancetargets.
During the Policy period, the maximum bonus potential
is 160 per cent of base salary with target levels at 48 per
cent of maximum and threshold bonus levels at 16 per
cent of maximum. The 2025 maximum bonus potential
is 160 per cent for the CEO and the outgoing CFO/COO
(time pro-rated for his period of employment) and 150
per cent for the new CFO.
Malus and clawback provisions apply to the annual
bonus plan (Section 3.3).
Bonuses are paid in cash and/or shares. The default
approach is that any bonus payable over target is
deferred into shares for a period of up to three years
under the Company’s Deferred Bonus Plan (“DBP”) with
shares being released one-third on each anniversary of
grant. The Committee has the discretion to amend the
required level of deferral, as appropriate. This level of
deferral can be reduced to 25 per cent of bonus earned
above target in the event that an executive director is
already compliant with their in and post-employment
shareholding guidelines. The Committee also has
discretion to defer the bonus in cash where dealing
restrictions prevent share awards being granted.
The DBP will credit participants with the benefit of
accrual for dividends paid over the deferral period.
The performance measures applied
may be financial or non-financial and
corporate, divisional or individual and
in such proportions as the Committee
considers appropriate. As set out on
page 103, currently, under the annual
bonus plan, participants can earn a
bonus based on the achievement
of a financial target and a personal
rating measured against one or
more specific (financial and/or
non-financial)objectives.
The maximum level of bonus
paid to a participant in the plan is
dependent on the achievement of
both the maximum for the financial
target and the highest personal
performance rating.
In exceptional circumstances, up
to 20 per cent of the maximum
bonus opportunity may be payable
independent of the financial out-turn.
The appropriateness of performance
measures is reviewed annually to
ensure they continue to support the
Company’s strategy.
Once set, performance measures
and targets will generally remain
unaltered unless events occur which,
in the Committee’s opinion, make
it appropriate to make adjustments
to ensure they operate as originally
intended and to take account of
events which were not foreseen
when the performance targets
wereoriginally set.
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Element and purpose Operation and opportunity Performance measures
Long-term incentives
To motivate and
incentivise delivery
of sustained
performance over
the long-term, the
Group will operate
the Long-Term
Incentive Plan (“LTIP”).
Awardsdelivered
in shares to provide
further alignment
with shareholders.
Executive directors may be granted shares with an initial
face value of up to 350 per cent of base salary in respect
of a financial year under the LTIP. 2025 award levels will
be 350 per cent for the CEO and 300 per cent for the
new CFO. The outgoing CFO/COO will not receive an
LTIP award in November 2024.
The LTIP will credit participants with the benefit of
accrual for dividends paid over the performance and
anyholding period.
Malus and clawback provisions (in respect of both
unvested and vested paid awards) apply to the LTIP
(Section 3.3).
Awards are usually subject to a combined vesting
and holding period of at least five years preventing
the delivery and sale of shares until the end of the
holdingperiod.
Vesting of LTIP awards granted
to executive directors will be
subject to satisfaction of one or
more performance measures.
The Committee may set such
performance measures, currently
EPS (45%), TSR (45%) and ESG
(10%), as it considers appropriate
(whether financial or non-financial
and whether corporate, divisional or
individual) usually assessed over a
period of at least three financial years.
Once set, performance measures
and targets will generally remain
unaltered unless events occur which,
in the Committee’s opinion, make
it appropriate to make adjustments
to the performance measures and
targets, provided that any adjusted
performance measure or target is,
inits opinion, neither materially more
nor less difficult to satisfy than the
original measure or target.
Executive directors can earn up
to 25 per cent of the award for
threshold performance.
All-employee share plans
To encourage
share ownership by
employees, thereby
allowing them to
share in the long-term
success of the Group
and align their
interests with those
ofthe shareholders.
Executive directors are able to participate in all-employee
share plans on the same terms as other Group employees.
In respect of the Sharesave plan, individuals may save
up to such limit as permitted by the relevant legislation
(currently £500 each month) for a fixed period of three
years. At the end of the savings period, individuals may
use their savings to buy ordinary shares in the Company
at a discount (currently of up to 20 per cent of the
market price set at the launch of each scheme).
In line with the governing
legislation, no performance
conditions are attached to
options granted under the
Sharesave Scheme.
Notes to the Policy table
1 The Committee retains discretion to make adjustments resulting from the application of the performance measures if it considers that an adjustment is appropriate
(for example, if the outcomes are not deemed by the Committee to be a fair and accurate reflection of business performance). In the event that the Committee were to
make an adjustment of this sort, a full explanation would be provided in the next Remuneration Report
2 The Committee may amend the terms of awards granted under the share plans referred to above in accordance with the rules of the relevant plans
3 The Committee reserves the right to make any remuneration payments and/or payments for loss of office (including exercising any discretions available to it in
connection with such payments) notwithstanding that they are not in line with the Policy set out above where the terms of the payment were agreed (i) before the
Policy set out above came into effect, provided that the terms of the payment were consistent with the shareholder-approved Policy in force at the time they were
agreed; or (ii) at a time when the relevant individual was not a Director of the Company and, in the opinion of the Committee, the payment was not in consideration
forthe individual becoming a Director of the Company. For these purposes “payments” includes the Committee satisfying awards of variable remuneration and,
inrelation to an award over shares, theterms of the payment are “agreed” at the time the award is granted
4 The Committee may make minor amendments to the Policy for regulatory, exchange control, tax or administrative purposes or to take account of a change in
legislation, where it would, in the opinion of the Committee, be inappropriate to seek or await shareholder approval
5 A summary of the key changes to this Policy compared to the previous policy are set out in Section 2 (Background to Directors’ remuneration policy) on pages 88
and89
Directors’ remuneration report continued
3.2 Performance measure selection and
approach to target setting
Annual bonus plan
The performance measures used under the annual
bonus plan are set annually to support the Company’s
strategic priorities and reinforce financial performance.
The performance targets are typically set by the
Committee based on a range of factors, principally the
Company’s budget as approved by the Board.
Long-term incentives
The Committee regularly reviews the performance
measures applicable to the LTIP to ensure that they align
with the Company’s strategy and reinforce financial
performance. The performance targets are typically set by
the Committee based on a range of factors, includingthe
Company’s three-year plan, sustainability strategy and
the market sectors in which it operates. The Committee
may change the measures and/or targets in respect of
subsequent awards. The Committee currently believes
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Corporate governance
that a combination of financial, market-based conditions
and corporate responsibility goals as the basis for the
performance measures for the LTIP is best suited to the
needs of the Company and its shareholders in order
to reward sustained long-term performance and the
creation of shareholder value.
3.3 Malus and clawback
The annual bonus plan, DBP and LTIP rules include a
provision for malus/clawback (before or within a period
of three years) following the payment/determination
of a bonus and/or the end of the performance period
under the LTIP if (a) the Company materially misstated its
financial results and as a result the bonus or award was
made, paid or vested to a greater extent than it should
have been; (b) the extent to which any performance
target or other condition was met was based on an error
or inaccurate or misleading information or assumptions
and as a result the bonus or award was made, paid or
vested to a greater extent than it should have been; (c)
the Committee concludes that circumstances arose
during the bonus year, the vesting period for DBP awards
or the performance and/or holding periods for LTIP
awards, which would have warranted summary dismissal
of the individual concerned; or (d) there is an event of
insolvency having regard to the involvement of the
individual executive in any events which occurred during
such bonus year, vesting period or performance period,
whichled to such insolvency.
3.4 Shareholding guidelines
While employed, the CEO is expected to build up a
shareholding valued at 300 per cent of salary and
other executive directors are expected to build up
a shareholding valued at 250 per cent of salary.
The Committee will review progress towards the
guidelines on an annual basis and has the discretion
to adjust the guidelines in what it feels are appropriate
circumstances. Executive directors are expected to
achieve compliance with the applicable shareholding
requirement within six years of joining the Board.
Executive directors will also be expected to retain shares
in compliance with the above guideline (or their actual
holding if lower) for a period of two years post-employment.
This post-employment guideline applies to shares from
incentive awards vested subsequent to the 2022 AGM.
The Committee retains discretion to amend or waive this
guideline if it is not considered appropriate in the specific
circumstances of an executive’s departure.
3.5 Engaging with our employees on pay
Employee engagement is supported through clear
communication of the Group’s performance and
objectives. This information is cascaded via team briefings,
employee events, intranet sites and e-newsletters
and there is always provision for questions, and to
hear feedback.
The Committee receives regular reports from the
Chief People Officer and senior managers on Group
remuneration. The reports cover changes to pay, benefits,
pensions and share schemes. Additionally, Simon Emeny,
non-executive director with responsibility for workforce
engagement, Nicky Dulieu, Chair of the Committee,
and Marion Sears, previous Chair of the Committee,
attended employee forums to discuss, amongst other
topics, the Company’s approach to remuneration and,
more specifically, executive remuneration and how this
aligns to the wider Company pay policy. The Committee
considers the feedback from these sessions when making
decisions on executive remuneration and any questions
about pay and working environment are discussed by
the Committee and the Board. The Committee did not
consult with employees when drafting the new Directors’
Remuneration policy.
The Company is proud of its long history of being regarded
as a responsible and respected employer and regularly
reviews the overall structure of pay practices across the
Group and the wider retail sector to ensure it remains
competitive and is able to retain and attract employees.
3.6 Statement of consideration of
employment conditions elsewhere in the
Company and differences to executive
director policy
Our employees are a key component of the Company’s
performance and our overall reward strategy aims
to support this. When considering remuneration
arrangements for executive directors and senior
management, the Committee takes into account the
pay and conditions of employees across the Group.
The Committee receives in-depth data from the Chief
People Officer on wider workforce pay and conditions and,
where appropriate, exercises oversight of remuneration
throughout the Group.
Our approach to reward for our employees is based on the
following principles:
• competitive: setting pay with reference to internal
relativity and external market practices;
• simple: helping all employees to understand how they
are rewarded;
• fair: achieving consistent outcomes through flexible
andtransparent policies; and
• sustainable: aligning reward to business strategy
and performance.
All employees are entitled to base salary and benefits,
including pension and staff discount. The Company
operates an HMRC Save-As-You-Earn share option
scheme (“Sharesave Scheme”), which provides employees
with the opportunity to acquire shares in the Company.
Approximately 640 employees participate in the Sharesave
Scheme. Our Employee Assistance Programme offers all
employees access to free, 24/7 confidential telephone,
online and face-to-face advice for problems they may
be experiencing at home or work. Employees also have
access to the Company’s Benevolent Fund charity, which
can provide financial assistance in cases of significant
hardship and provide recuperative holidays and care
breaks. The Company’s senior executives also participate
in the Company’s long term incentive plan designed
to support the Company’s long-term strategy to create
shareholder value.
Participation in a pension plan is offered to all employees
on a contributory basis and we have approximately 6,557
employees in our pension plans.
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3.7 Managing conflicts of interest
In order to avoid any conflict of interest, remuneration
is managed through well-defined processes ensuring
no individual is involved in the decision-making process
related to their own remuneration. In particular, the
remuneration of all executive directors is set and approved
by the Committee; none of the executive directors are
involved in the determination of their own remuneration
arrangements. The Committee also receives support from
external advisors and evaluates the support provided
by those advisors annually to ensure that advice is
independent, appropriate and cost-effective.
3.8 Statement of consideration of
shareholder views
The Committee maintains a continual dialogue with our
major shareholders and proxy agencies to understand their
views. Any major changes to the policy or its operation
would be subject to prior consultation as necessary.
As part of the current policy review process, the Committee
consulted with approximately 65 per cent of the
shareholder register. The Chair of the Remuneration
Committee wrote to the Company’s largest investors and
shareholder representatives setting out the proposed
changes to the existing remuneration policy and made
herself available for meetings as requested by investors.
The views expressed by investors were supportive of the
proposed changes to the policy. The views of shareholders
were considered by the Committee and formed part of
the final policy as set out in this section on page 87.
Directors’ remuneration report continued
Robert Moorhead’s remuneration has been pro-rated to 30 November 2024
The minimum scenario reflects base salary, pension and benefits, being the only elements of the remuneration package not linked to performance. No salary increase has
been assumed in respect of the April 2025 salary review
The on-target scenario reflects fixed remuneration as above, plus the target level of performance for the annual bonus plan, which is 48 per cent of maximum annual
bonus (based on a maximum of 160 per cent of base salary for the CEO and outgoing CFO/COO and 150 per cent of base salary for the new CFO); and for the LTIP awards,
threshold vesting levels have been assumed, based on awards of 350 per cent of base salary for the CEO and 300 per cent of base salary for the new CFO
The maximum scenario reflects fixed remuneration as above, plus the maximum level of performance for the annual bonus plan of 160 per cent of base salary for the CEO
and outgoing CFO /COO and 150 per cent of base salary for the new CFO; and for the LTIP awards, maximum vesting levels have been assumed, based on awards of 350
per cent of base salary for the CEO and 300 per cent of base salary for the new CFO
Additional LTIP 50 per cent increase in share price – as for the maximum scenario above, plus an increase in the value of the LTIP of 50 per cent across the relevant
performance period to reflect possible share price appreciation. Consistent with the reporting regulations, this does not separately include the impact of dividend accrual
Minimum
performance
Performance
in line with
expectations
Performance
in line with
expectations
Performance
in line with
expectations
Maximum
performance
Maximum
performance
(with 50% share
price increase)
Carl Cowling
£1,000,000
£2,000,000
£3,000,000
£4,000,000
£5,000,000
£6,000,000
0
£705,419
£1,807,543
£4,126,499
£5,300,399
100%
32%
29%
39%
20%
13%
44%
23%
26%
17%
57%
Minimum
performance
Maximum
performance
Maximum
performance
(with 50% share
price increase)
Robert Moorhead
£127,581
£220,085
£320,296 £320,296
100%
42%
58%
60%
40%
60%
40%
Minimum
performance
Maximum
performance
Maximum
performance
(with 50% share
price increase)
Max Izzard
£477,995
£1,139,496
£2,502,995
£3,177,995
100%
30%
28%
42%
21%
15%
42%
22%
27%
19%
54%
Total Fixed Remuneration Annual Bonus LTIP Share Price Growth
Total remuneration opportunity – valuation assumptions
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3.9 Total Remuneration opportunity
The graphs on the previous page indicate the level of
remuneration that could be received by each executive
director in accordance with the Policy in the first financial
year to which the new Policy applies (i.e. financial year
ending 31 August 2025) at different levels of performance.
Robert Moorhead’s remuneration in this analysis is
pro-rated for his tenure as an executive director, whichends
on 30 November 2024. Robert Moorhead will not receive an
LTIP award in November 2024. Max Izzard’s remuneration in
this analysis is in respect of a full financial year and excludes
buy-out awards relating to his recruitment.
3.10 Recruitment remuneration policy
The Company’s recruitment remuneration policy aims
to give the Committee sufficient flexibility to secure
the appointment and promotion of high-calibre
executive directors to strengthen the management
team and secure the skill sets to deliver the Company’s
strategic objectives.
The starting point for the Committee will be to look at
the general policy for executive directors as set out above,
and structure a package in accordance with that policy.
In addition, ignoring any special buy-out arrangements
that may prove to be necessary, the annual bonus and
long-term incentive compensation arrangements will
operate (including the maximum award levels) within the
limits as set out in the Future Policy table in Section 3.1 for
executive directors on pages 90 to 92.
When an internal appointment is made, any pre-existing
obligations will be honoured and payment will be
permitted under the policy. However, the Committee
may adjust any pre-existing obligations to reflect the
new appointment where it is considered appropriate
to do so. Where a candidate is a non-executive director,
therecruitment remuneration policy allows a non-
executive director to be paid as an executive director
should they be required to temporarily take on an
executive position.
For external and internal appointments, the Committee
may agree that the Company will meet such relocation
expenses and legal fees as it considers to be appropriate.
Where it is necessary to make a recruitment-related pay
award to an external candidate to buy out any element of
compensation that an external candidate received from
a previous employer, the Company will not pay more
than the Committee considers necessary and will in all
cases seek, in the first instance, to deliver any such awards
under the terms of the existing incentive pay structure.
It may, however, be necessary in some cases to pay such
compensation on terms that are more bespoke than the
existing pay structures at the Company in order to secure
a candidate. This may include the granting of awards
under the Listing Rules exemption LR 9.3.2R.
Any compensation of this nature paid to external
appointments, whether under the bonus plan, LTIP or
otherwise, will be capped at the commercial value of the
amount forfeited and will take account of the nature,
time-horizons and any performance requirements of
forfeited awards. In particular, the Committee will seek
to ensure that any awards being forfeited, which were
subject to outstanding performance requirements
(otherthan where substantially complete) are bought out
with replacement performance requirements and any
awards with service requirements are, again, bought out
with similar terms. However, exceptionally the Committee
may relax those obligations where it considers it to be in
the interests of shareholders and those factors are, in the
view of the Committee, equally reflected in some other
way, for example, through a significant discount to the
face value of the awards forfeited.
3.11 Contracts of service and policy on
payment for loss of office
Executive directors are on rolling service contracts with no
fixed expiry date. The contract dates and notice periods for
each executive director in post as at the date of this Report
are as follows:
Date of contract
Notice period
by Company
Notice period
bydirector
Carl Cowling 26 February 2019 12 months 12 months
Robert
Moorhead
8 October 2008 12 months 9 months
Carl Cowling’s service contract provides for notice of
12 months from either party, permits summary dismissal
with no compensation in specified cases, has no special
provisions in the event of a change of control and limits
the maximum sum due on termination to base salary only
for the notice period. Robert Moorhead’s service contract
provides for notice of 12 months from the Company and
nine months from Robert Moorhead, and has no special
provisions in the event of a change of control and limits
the maximum sum due on termination to base salary only
for the notice period. Max Izzard’s service contract is dated
14 March 2024 and provides for notice of 12 months from
either party.
Copies of the service contracts may be inspected at the
registered office of the Company.
It is envisaged that any new executive director would
join with a contract, which is no more favourable than
that summarised in respect of Carl Cowling. In practice,
the facts surrounding a termination may be complex
and do not always fit neatly into defined categories for
“good” or “bad” leavers. Therefore, it is appropriate for
the Committee to consider the suitable treatment on a
termination having regard to all of the relevant facts and
circumstances available at that time. This Policy applies
both to any negotiations linked to notice periods on a
termination and any treatment that the Committee
may choose to apply under the discretions available to it
under the terms of the annual bonus plan, DBP and LTIP.
The potential treatments on termination under these
plans (which are governed by the relevant plan rules) are
summarised in the table overleaf.
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Directors’ remuneration report continued
Reason for leaving Timing of vesting/payment Calculation of vesting/payment
Annual bonus
“Bad leaver” (all cases other
than those specified below)
Not applicable No bonus to be paid for the financial year.
Redundancy, retirement
or otherwise at the
Committee’sdiscretion
Following the end of the
financial year
Bonuses will only be paid to the extent that the
performance measures have been met. In determining
the level of bonus to be paid, the Committee may, at its
discretion, take into account performance up to the date
of cessation or over the financial year as a whole based on
appropriate performance measures as determined by the
Remuneration Committee. Any bonus will usually be paid
on a time pro-rata basis and may be paid entirely in cash
with no deferral.
Change of control Continuation of plan or
acceleration due to change
of control
The Committee may decide that the end of any bonus
year should be accelerated to the date of the event
with appropriate pro-rating of any payment unless the
Committee decides otherwise. Any bonus may be paid
entirely in cash with no deferral.
Deferred Bonus Plan
Dismissal for misconduct Not applicable Vested and unvested awards lapse.
All other cases Vesting: at the end of the
relevant vesting period (save
in the case of death where
vesting occurs immediately)
unless the Committee
decides otherwise in
exceptional circumstances
Awards vest over the original number of shares.
Change of control On change of control Awards will vest over the original number of
shares. Awards may be exchanged for awards over
shares in the acquiring company in the event of an
internal reorganisation.
LTIP
“Bad leaver” (all cases other
than those specified below)
Not applicable Vested and unvested awards lapse.
Ill health, injury, permanent
disability, retirement with the
agreement of the Company,
redundancy, saleof a
division or subsidiary, orif
the circumstances, in the
opinion of the Committee,
are exceptional
Vesting: at the end of the
relevant performance period
Exercise: at the end of any
relevant holding period
For prescribed “good leavers” awards vest over the
original timescales, subject to the original performance
conditions. Awards are pro-rated for time unless the
circumstances, in the opinion of the Committee,
are exceptional.
Where the Committee determines that the
circumstances are exceptional such that a participant
is not a “bad leaver”, awards vest over the original
timescales, subject to performance measurement
andtimepro-rating.
Death Vesting: at the discretion of
the Committee
The Committee has discretion to disapply performance
conditions and may allow immediate vesting.
Awards may be pro-rated for time (as noted above).
Change of control On change of control Awards will vest to the extent that any performance
conditions have been satisfied and will be reduced
pro-rata to take account of the performance period not
completed (as noted above), unless the Committee
decides otherwise. Awards may be exchanged for awards
over shares in the acquiring company in the event of an
internal reorganisation.
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In respect of all-employee plans, including Sharesave,
the executive directors are subject to the same leaver
provisions as all other participants.
If additional compensation is required to be considered,
such as on a settlement agreement, the Committee will
consider all relevant commercial factors affecting the
specific case. If the Committee deems it necessary, the
Company may enter into agreements with an executive
director, which may include the settlement of liabilities
in return for payment(s), including reimbursement of
legal fees and outplacement services. In some cases, a
departing director may receive a modest leaving gift.
3.12 Chair and non-executive director fees
All payments made to the Chair are determined by the
Committee. The Chair does not participate in any bonus
or share plans. The fees paid to non-executive directors
are determined by the Chair and the executive directors
(being the Board excluding the non-executive directors
themselves) and are paid in cash. The levels are set to
take into account the required time commitment and
the fee payments for non-executive directors of similar
organisations. Non-executive directors do not participate
in any bonus or share plans. The current fees payable to
the Chair and the non-executive directors are set out on
page 101.
Non-executive directors’ letters of appointment
The Chair, who has a letter of appointment, is appointed
for an initial term of three years. The appointment may
be terminated at any time by either the Company or
the Chair on three months’ notice. The non-executive
directors, who have letters of appointment, are also
appointed for an initial term of three years. The Chair
and non-executive directors may be invited to serve for
up to a further two terms (nine years in total). Any term
renewal is subject to Board review and re-election at the
Company’s AGM. There is no right to re-nomination by
the Board, either annually or after any three-year period.
These appointments can be terminated at any time by
either the Company or the non-executive director without
notice. Copies of the letters of appointment may be
inspected at the registered office of the Company.
Chair and non-executive
directors Original appointment date Term end date
Annette Court 1 September 2022 31 August 2025
Colette Burke 1 July 2023 30 June 2026
Nicky Dulieu 9 September 2020 8 September 2026
Simon Emeny 26 February 2019 25 February 2025
Situl Jobanputra 1 March 2024 28 February 2027
Helen Rose 1 July 2024 30 June 2027
Under the Company’s Articles of Association, all directors
are required to annually retire and submit themselves for
re-election.
The following table explains the different elements
of the remuneration that is paid to the Chair and
non-executive directors.
Element and purpose Operation and opportunity Performance measures
Annual fees
Paid to attract high
calibre individuals to be
Board members.
Fee levels for the Chair and the non-executive directors are
usually reviewed annually with any changes normally taking
effect from 1 April.
The fees paid to the Chair and the fees of the other non-executive
directors aim to be competitive with other fully listed companies
of equivalent size and complexity. The Company does not
adopt a quantitative approach to pay positioning and exercises
judgement as to what it considers to be reasonable in all the
circumstances as regards quantum.
In addition to a basic fee, additional fees are paid to non-executive
directors who chair a Board Committee (excluding the
Nominations Committee) and to the Senior Independent
Director (“SID”) and additional fees may be introduced from
time to time for other responsibilities or for a significantly
increased time commitment. Additional payments may be
made for time spent travelling on Company business.
Fees are paid monthly in cash although the Company reserves
the right to pay a proportion of the fees in shares within this
limit if it is considered appropriate to do so.
All fees are subject to the aggregate fee cap for directors in
the Articles of Association as amended from time to time
(currently£900,000 per annum).
Neither the Chair nor any
non-executive directors
participate in any variable
pay arrangements.
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Element and purpose Operation and opportunity Performance measures
Benefits
Paid to attract high
calibre individuals to be
Board members.
In line with other employees, the Chair and the non-executive
directors receive an employee staff discount.
The Company may meet the costs (including tax thereon) of
providing tax advice and tax return assistance for international
Chair or NEDs.
The Chair and NEDs may be reimbursed for reasonable
business-related expenses (including corporate hospitality)
andany tax thereon.
Other benefits relevant to the role, such as private medical
insurance, may be provided at the discretion of the Committee
or Board as appropriate.
Benefits would count towards the overall fee cap.
None.
Directors’ remuneration report continued
4. Annual Directors’ remuneration report
The Committee presents the annual report on
remuneration which, together with the introductory letter
by the Chair of the Committee on pages 85 to 88, will be
put to shareholders as an advisory vote at the forthcoming
Annual General Meeting.
4.1 Remuneration Committee
Nicky Dulieu is Chair of the Committee. The other
members of the Committee are Colette Burke, Simon
Emeny, Situl Jobanputra and Helen Rose. Kal Atwal
stepped down as a non-executive director and member
of the Committee on 12 September 2023 and Marion Sears
stepped down as a non-executive director and Chair of
the Committee on 7 February 2024. At the invitation of the
Committee, the Chair, Group Chief Executive, Chief People
Officer and the Company Secretary may attend but
exclude themselves in relation to discussions in respect of
their own remuneration.
The Committee met six times during the year.
All Committee members are expected to attend meetings.
The table on page 70 in the Corporate governance report
shows the number of meetings held during the year ended
31 August 2024 and the attendance record of individual
directors. In order to avoid any conflict of interest,
remuneration is managed through well-defined processes
ensuring no individual is involved in the decision-making
process related to their own remuneration. In particular,
the remuneration of all executive directors is set and
approved by the Committee; none of the executive
directors are involved in the determination of their own
remuneration arrangements. The Committee also receives
support from external advisers and evaluates the support
provided by those advisers annually to ensure that advice
is independent, appropriate and cost-effective.
This year the Remuneration Committee undertook a
review of its advisors and, after considering proposals
from a number of relevant firms, agreed to appoint
Deloitte LLP, an independent firm of remuneration
consultants. Deloitte is a founding member of the
Remuneration Consultants Group and adheres to its
code in relation to executive remuneration consulting in
the UK. Other parts of Deloitte have provided tax advice,
specific corporate finance support in the context of
merger and acquisition activity and unrelated corporate
advisory services. During the year, Deloitte’s executive
compensation advisory practice advised the Committee
on developments in market practice, corporate
governance, institutional investor views, the development
of the Company’s incentive arrangements and the review
of the Policy. Deloitte representatives also regularly
attend Committee meetings. Deloitte’s fees for advice
provided to the Committee during the year were £44,450
(excluding VAT), charged on a time and materials basis.
The Remuneration Committee is satisfied that the advice
it has received has been both objective and independent.
Prior to Deloitte’s appointment, the Committee received
advice from FIT Remuneration Consultants LLP (“FIT”),
which is also a member of the Remuneration Consultants
Group and adheres to its code of conduct. FIT has no other
relationship with the Company or any individual director.
The Committee was satisfied that FIT provided objective
and independent advice. FIT’s fees in respect of the year
under review were £38,095 (excluding VAT), charged on
atime and materials basis.
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Key Committee activities during the year
Alignment
to strategy
andwider
workforce
Assessed the ongoing alignment of remuneration structures, measures and targets to strategy in the
context of the review of the Policy.
Reviewed wider workforce remuneration.
Reviewed the gender pay gap report and recommended to the Board that the gender pay gap report
be published.
Engaged with the workforce about executive remuneration. The Committee Chair attended employee
forums to discuss, amongst other topics, the Company’s approach to remuneration and, more
specifically, executive remuneration and how this aligns to the wider Company pay policy.
Shareholder
engagement
The Committee Chair and Company Secretary met with major shareholders and discussed the proposed
new Directors’ remuneration Policy.
Considered investor feedback on remuneration.
Pay for
performance
Assessed performance against bonus targets set for the financial year ended 31 August 2023 and LTIP
awards granted in the financial year ended 31 August 2021 and considered whether any discretion
should be used to adjust formulaic outcomes.
Reviewed the performance of the executive directors and senior leadership team against
personal objectives.
Reviewed and approved targets for annual bonus and LTIP awards made in November 2023.
Management
changes
Reviewed and approved Max Izzard’s remuneration as the new CFO of the Company, including
compensation for the loss of incentives from his previous employer. Agreed that Robert Moorhead
would be treated as a good leaver under the Company’s LTIP.
Governance Reviewed progress of the executive directors against shareholding requirements.
Approved the 2023 Directors’ remuneration report.
Reviewed proxy agent commentary.
Pay/fees Approved pay rises for the Chair, Carl Cowling, Robert Moorhead and the senior leadership team.
Remuneration
consultants
Appointed new Remuneration Committee advisor, Deloitte LLP.
4.2 How our Policy is linked to our strategy
Our Policy focuses on an approach to pay, which we believe is in our shareholders’ best interests and promotes the
long-term success of the Company. While it provides executive remuneration packages, which are competitive, thereis a
very clear bias to variable pay with stretching and rigorous performance measures and targets designed to deliver superior
returns for shareholders. Our Policy has worked well supporting the Company’s long-term strategy to create shareholder
value and recruit high calibre executives. The table below shows how the performance measures that we use in our
variable pay align to our strategy.
Alignment to strategy Alignment to our stakeholders’ interests
Annual bonus
Headline
PBTand non-
underlying
items
1
Headline PBT and non-underlying items
1
is one of our main KPIs
assessing the profitability of the Group and provides stakeholders
with information on the performance of the Group before the effect
of non-underlying items. The indicative financial out-turn is subject
to both potential reduction under the assessment of personal
performance, which includes behaviour and ESG-based factors
andthrough the broad power to apply malus.
Shareholders and Investors
LTIP
EPS EPS indicates how we are creating long-term value for our shareholders. Shareholders and Investors
Relative TSR Aligns management with the wider shareholder experience and
reinforces our focus on creating superior returns for shareholders.
Shareholders and Investors
ESG The Company has an ambitious ESG strategy. Our outstanding LTIP
awards contain stretching targets in respect of our impact on the
environment, senior executive team diversity and supplier engagement.
Customers and communities,
Workforce, Suppliers,
Shareholders and Investors
1 Alternative performance measure defined and explained in the Glossary on page 173
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Strategic report Corporate governance Financial statements Additional information
4.3 Gender pay disclosures
The Committee reviewed the gender pay gap report and recommended to the Board that the gender pay gap report
be published. You can find more information on the Company’s gender pay gap and the actions that are being
implemented to reduce it on pages 54 and 55.
4.4 Implementation of Policy in the financial year ending 31 August 2025
Subject to shareholder approval of the new Policy, it will be applied in respect of the executive directors as follows during
the financial year ending 31 August 2025:
Element of pay Implementation of Policy
Executive directors
Base salary Current salaries are as follows: Carl Cowling £670,800; Robert Moorhead, £483,111; Max Izzard £450,000.
Carl Cowling and Max Izzard will be eligible, in line with other head office staff, for any increase in salary
from 1 April following the March 2025 annual review.
Benefits Benefits will continue to comprise the provision of a car allowance, private medical insurance and life assurance.
Pension The pension contributions are three per cent, in line with the wider workforce.
Annual
bonus
The bonus opportunity for Carl Cowling and Robert Moorhead will remain at 160 per cent of annual
salary (pro-rated in the latter case for his period of employment) and for Max Izzard it will be 150 per
cent of annual salary. It is envisaged that the bonus metrics will be based on a matrix of financial and
personal performance with the financial performance measure being Headline profit before tax and
non-underlying items
1
. The financial bonus metrics will apply across the Group’s bonus plans, sothat the
whole organisation is focused on delivering financial performance via the metrics that are applicable to
each business. The Committee will publish the Group targets for that financial year in next year’s report
and, consistent with market practice, has elected not to pre-disclose them (orgive numerical personal
objectives) on the basis of commercial sensitivity. Any bonus in excess of the on-target level will be deferred
into shares if the executive director has not met their shareholding requirements. If an executive director is
already compliant with their shareholding requirement, the requirement to defer any bonus into shares in
excess of the on-target level will be reduced to 25per cent.
Long-term
incentives
Annual LTIP awards will be 350 per cent of salary for Carl Cowling and 300 per cent for Max Izzard.
Robert Moorhead will not receive an LTIP in the financial year ending 31 August 2025.
Vesting of LTIP awards will be determined based on the following measures: 45 per cent based on EPS growth,
45 per cent based on relative TSR and 10 per cent on ESG measures. The EPS performance targets will be based
on the growth in Headline pre-tax earnings per share. The TSR performance measure remains a median to
upper quartile scale relative to the FTSE All Share Retailers Index constituents. The ESG measures are a
reduction in Scope 1 and 2 carbon emissions and engagement with suppliers in respect of reducing Scope 3
carbon emissions. More details on the targets are set out in Section 4.14 of this report.
The Committee approved these performance measures as they are directly linked to the objectives set
out in the Group’s strategy; there is a direct link with shareholder value and there is a clear line of sight for
participants between performance and reward.
The Committee retains a broad discretion to reduce vesting levels, including if it considers that there would
otherwise be a windfall gain or if management fail to deliver on the Company’s overall ESG expectations.
One-off
recruitment
buy-out
awards to
newCFO
As part of his recruitment, Max Izzard received the following compensation in respect of annual bonus and
restricted share awards forfeited from his previous employer when he joined WHSmith. Compensation is of
comparable commercial value and structured in a broadly comparable manner to his forfeited awards.
• A cash sum of £59,063 being the amount he forfeited under the Burberry 2023/24 annual bonus plan.
• Share awards were granted in September 2024 using the three-day average of Burberry and WHSmith
shares immediately prior to his start date of 1 September 2024:
– A share award over 3,625 shares, in compensation for his forfeited 2022 Burberry RSU, which will vest in
November 2025 subject to continued employment.
– A share award over 5,378 shares, in compensation for his forfeited 2023 Burberry RSU, which will vest
in November 2026 subject to continued employment and satisfaction of the performance conditions
applying to LTIP awards granted in the financial year ended 31 August 2024 (as set out in Section 4.14).
As this replacement award is subject to performance and the forfeited award was only subject to
continued employment, the forfeited awards were converted into WH Smith LTIP awards at a rate of 1:2
in line with standard practice to remain of an equivalent commercial value.
Directors’ remuneration report continued
1 Alternative performance measure defined and explained in the Glossary on page 173
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Corporate governance
The Directors’ remuneration policy in respect of the Chair and non-executive directors will be applied as follows in the
financial year ending 31 August 2025:
• Benefits are expected to include private medical insurance for the Chair and reimbursement of travel and subsistence
costs incurred in the normal course of business by the Chair and non-executive directors; and
• Fees will be subject to an annual review in March 2025.
4.5 Summary of non-executive directors’ remuneration 2024 (audited)
The Chair received a pay increase of 2.5 per cent with effect from 1 April 2024. The current fee of the Chair of the Board
is£328,000.
The fees of the non-executive directors were increased by 2.5 per cent with effect from 1 April 2024. The current fees are
£63,960 for the role of non-executive director with additional fees of:
(i) £15,990 payable for the role of Senior Independent Director (“SID”); and
(ii) £15,990 payable for being the Chair of the Audit, ESG or Remuneration Committee.
The table below summarises the total remuneration for non-executive directors as a single figure for the financial year
ended 31 August 2024. Non-executive directors are not paid a pension and do not participate in any of the Company’s
variable incentive schemes:
Base fee
£’000
Committee/SID fee
£’000
Benefits
(a)
£’000
Total
£’000
2024 2023 2024 2023 2024 2023 2024 2023
Annette Court
(b)
318 255 – – – – 318 255
Colette Burke 63 10 – – 1 – 64 10
Nicky Dulieu
(c)
63 61 25 15 – 1 88 77
Simon Emeny 63 61 16 15 1 – 80 76
Situl Jobanputra
(d)
32 – 8 – – – 40 –
Helen Rose
(e)
11 – – – – – 11 –
Directors who resigned during the year
Kal Atwal
(f)
2 61 – 15 – 1 2 77
Marion Sears
(g)
27 61 13 15 – – 40 76
Total £’000s 579 509 62 60 2 2 643 570
a) Benefits primarily consist of travel and subsistence costs incurred in the normal course of business, in relation to meetings on Board and Committee matters and other
Company events which are considered taxable
b) Annette Court was appointed as Chair with effect from 1 December 2022
c) Nicky Dulieu was appointed Chair of the Remuneration Committee on 7 February 2024
d) Situl Jobanputra was appointed as a non-executive director on 1 March 2024
e) Helen Rose was appointed as a non-executive director on 1 July 2024
f) Kal Atwal stepped down as a non-executive director of the Company on 12 September 2023
g) Marion Sears stepped down as a non-executive director of the Company on 7 February 2024
4.6 Summary of executive directors’ remuneration 2024 (audited)
The table below summarises the total remuneration for executive directors as a single figure for the financial year ended
31 August 2024:
Salary
(a)
£’000
Benefits
(b)
£’000
Pension
(c)
£’000
Total fixed
remuneration
£’000
Annual
bonus
(d)
£’000
LTI
(e)
£’000
Total variable
remuneration
£’000
Total
remuneration
£’000
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
Carl Cowling 644 610 14 15 19 37 677 662 884 998 1,098 1,095 1,982 2,093 2,659 2,755
Robert Moorhead 476 461 14 14 14 46 504 521 637 754 777 811 1,414 1,565 1,918 2,086
Total £’000s 1,120 1,071 28 29 33 83 1,181 1,183 1,521 1,752 1,875 1,906 3,396 3,658 4,577 4,841
a) As explained in the Committee Chair’s annual statement, with effect from 1 April 2024, Carl Cowling received a salary increase of 7.5 per cent to £670,800 and Robert
Moorhead, in line with other senior executives, received a pay increase of 2.5 per cent to £483,111
b) Benefits relate to the provision of a car allowance, private medical insurance and life assurance
c) The pension figures in the table above are the salary supplement received in lieu of any pension contribution into the Company’s defined contribution pension scheme
d) The performance measures for the annual bonus, and achievement against them, together with details of the level of deferral are set out on pages 103 and 104
e) The performance measures for the LTIP, and achievement against them, are set out on page 106. The performance measures for the awards granted in November 2021 were
substantially met and 71 per cent of the award vested and the remaining 29 per cent lapsed. See note f on page 107 for more information on the 2021 LTIP vesting. The share
price used to calculate the 2024 LTI figure in the table is 1214p, being the average share price for the Company over the last quarter of the financial year ended 31August 2024.
There was no share price appreciation between grant and 31 August 2024. Values for 2023 have been updated for the actual share price on the date of vesting (1,320p)
The total aggregate emoluments (excluding LTI) paid to the Board in the financial year ended 31 August 2024 was
£3,345,000 and in the financial year ended 31 August 2023 was £3,592,000.
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Strategic report Corporate governance Financial statements Additional information
4.7 Payments made to former directors (audited)
No payments were made in the financial year ended 31 August 2024 to former directors of the Company.
4.8 Payments for loss of office (audited)
No payments were made in respect of any director’s loss of office in the financial year ended 31 August 2024.
4.9 Assessing pay and performance
You can see how the Company has generated shareholder value since 2014 in the TSR graph below. As can be seen from
the graph, the Company generated a return of 33 per cent over the financial year ended 31 August 2024 compared to the
FTSE All Share Retailers Index, which generated a return of 28 per cent over the same period.
WH Smith PLC FTSE All Share Retailers Index
Accounting year end
0
50
100
150
200
250
2014 2015 2016 2018 2019 2020 2021 2022
2024
20232017
Total shareholder return performance since 31 August 2014
a) The graph illustrates the TSR performance on a cumulative basis (with dividends reinvested) as at the end of each of the last ten financial years compared with the FTSE
All Share Retailers Index (the “Index”) over the same period
b) The Company is a member of the Index and, as such, this sector was considered to be the most appropriate comparator group upon which a broad equity market index
is calculated
The table below summarises the Group Chief Executive’s remuneration and how the Company’s variable pay plans have
paid out over the past ten years.
Financial year ended 31 August CEO
Single figure of total
remuneration
£’000
Annual bonus
(vesting versus maximum
opportunity)
%
Long-term incentive
(vesting versus maximum
opportunity)
%
2024 Carl Cowling 2,659 82.5 71
2023 Carl Cowling 2,755 100 65
2022 Carl Cowling 1,632 100 –
2021 Carl Cowling 1,183 63 –
2020 – from 1 November 2019 Carl Cowling 531 – 13
2020 – until 31 October 2019 Stephen Clarke 221 – 13
2019 Stephen Clarke 3,416 100 69
2018 Stephen Clarke 2,879 93 58
2017 Stephen Clarke 4,112 98 81
2016 Stephen Clarke 5,179 100 98
2015 Stephen Clarke 4,148 100 100
Directors’ remuneration report continued
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4.10 Annual bonus for the financial year ended 31 August 2024 (audited)
The performance targets used under the annual bonus plan are set to support the Company’s strategic priorities and
reinforce financial performance. The financial performance targets are set by the Committee based on a range of factors,
principally the Company’s budget as approved by the Board. The Committee agreed that the financial performance
targets for the annual bonus plan for the financial year ended 31 August 2024 should be based on Headline profit before
tax and non-underlying items
1
.
Under the annual bonus plan, participants can earn a bonus based on the achievement of a financial target and a
personal rating measured against one or more specific (financial and/or non-financial) objectives. The maximum level of
bonus paid to a participant in the plan is dependent on the achievement of both the maximum financial target and the
highest personal performance rating. The Committee sets a threshold pay-out target and a maximum pay-out target
with straight-line vesting between the targets.
For the financial year ended 31 August 2024, save in exceptional circumstances, no bonus was payable unless both the
threshold financial target and at least an acceptable personal rating (i.e. “Developing”) were achieved. For on-target
achievement of the profit target and a good personal rating (i.e. “Strong”), an executive would earn 48 per cent of the
maximum bonus available under the plan. Maximum bonus opportunity was 160 per cent of salary for both of the
executive directors for the financial year ended 31 August 2024 with any bonus above 48 per cent of maximum (target
performance) paid in deferred shares.
Bonuses for the financial year ended 31 August 2024 could be earned according to the following scale (as a percentage
of each executive’s respective maximum), which is consistent with prior years:
Financial performance against Headline Group profit
before tax and non-underlying items
1
target Role model Outstanding Strong Developing Underachiever
Max: £173m 100% 80% 60% 40% 0%
Target: £165m 80% 64% 48% 32% 0%
Threshold: £157m 40% 32% 24% 16% 0%
Interpolation between points in the matrix is permitted
The executive directors’ personal ratings are based on a range of objectives. Carl Cowling’s personal objectives included:
Objective Achievement
Deliver strategy review Undertook and presented the strategy review and set out clear actions for approval by the Board.
Successfully delivered against those objectives over the remainder of the year, including the
completion of agreed projects and implementation of strategy.
Supply Chain
and Systems
transformation
Successful delivery of the Supply Chain transformation road map, including outsourcing the UK
supply chain to GXO and the opening of the East Coast DC by the US business.
Development of the Systems transformation road map.
Develop the talent
and succession
pipeline of the senior
leadershipteam
Developed and presented the succession plan for the senior team, which was approved by
theBoard. Taken steps to ensure a successful transition from Robert Moorhead to Max Izzard
asCFO.
Food and
Beveragestrategy
Successfully oversaw the creation and launch of the Company’s new food range, Smith’s Family
Kitchen, which has been well received by customers and landlords and has delivered a double
digit increase in sales.
North American
operating model
Launched various initiatives following a review of the North American operating model,
including a full transformation of the supply chain and implementation of a new merchandising
operating model for the business.
Material progress on the maturity of cyber-security defences and processes across the North
American business.
Employee
engagement
Introduced a new robust engagement survey to improve participation and help us understand
how our colleagues feel about working at WHSmith. Participation rates increased to 78 per cent
following the introduction of the new survey.
1 Alternative performance measure defined and explained in the Glossary on page 173
WH Smith PLC Annual Report and Accounts 2024
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Strategic report Corporate governance Financial statements Additional information
Robert Moorhead’s personal objectives included:
Objective Achievement
Deliver strategy review Undertook and presented the strategy review and set out clear actions for approval by the Board.
Successfully delivered against those objectives over the remainder of the year, including the
completion of agreed projects and implementation of strategy.
Supply Chain
and Systems
transformation
Successful delivery of the Supply Chain transformation road map, including outsourcing the UK
supply chain to GXO and the opening of the East Coast DC by the US business.
Development of the Systems transformation road map.
Food and
Beveragestrategy
Successfully oversaw the creation and launch of the Company’s new food range, Smith’s Family
Kitchen, which has been well received by customers and landlords and has delivered a double
digit increase in sales.
Succession planning Successfully assisted in the recruitment of Max Izzard. and has taken steps to ensure that there
is a successful transition to Max Izzard as CFO. Continued to develop a highly experienced
finance team. The Board approved the succession plan for the finance team.
Work with the
Trustees of the DB
pension scheme
Successfully worked with the Trustees of the Group’s Defined Benefit Pension Scheme in
respect of the Buy-out of the Scheme.
The Company received the pension surplus of £87m (net of tax) on 10 September 2024.
Cyber security and
Data Management
Successfully oversaw the implementation of the ongoing improvements to the Company’s
approach to cyber-security and data management.
The Group’s Headline profit before tax and non-underlying items
1
for the financial year ended 31 August 2024 was £166m.
This performance resulted in approximately 2,393 employees across the Group also receiving a bonus under the annual
bonus plan for the financial year ended 31 August 2024.
Both Carl Cowling and Robert Moorhead were awarded a personal rating of Role Model and following the successful
achievement of all of their key personal objectives, Carl Cowling and Robert Moorhead will receive a bonus payment of
£884,383 and £636,934 respectively, which represents 82.5 per cent of maximum in both cases. Out of these amounts,
£367,867 (Carl Cowling) and £264,938 (Robert Moorhead), which represents 42 per cent of the total bonus, will be deferred
into shares and released over a period of three years. Vested and unvested awards under the DBP will lapse if a participant
is dismissed for cause.
4.11 Annual change in remuneration of each director compared to employees
The table below shows the percentage changes in the remuneration of each director (salary/fees, annual bonus
and taxable benefits) from financial year to subsequent financial year over the five financial years to 31 August 2024
compared with the percentage changes in the average of those components of pay for UK employees employed by
WH Smith Retail Holdings Limited over that period. The Company has chosen to voluntarily disclose this information,
giventhat WH Smith PLC is not an employing company.
Salary/fee increase/(decrease)
%
Annual bonus increase/(decrease)
%
Taxable benefits increase/(decrease)
%
Financial year ended 31August 2024 2023 2022 2021 2020 2024 2023 2022 2021 2020 2024 2023 2022 2021 2020
Carl Cowling 6 4 6 14 140 (11) 4 75 100 (100) (7) 7 10 – 100
Robert Moorhead 3 4 1 5 5 (16) 4 103 100 (100) – – – – –
Annette Court
(a)
25 – – – – n/a n/a n/a n/a n/a – – – – –
Kal Atwal
(b)
(97) 9 119 – – n/a n/a n/a n/a n/a (100) 100 – – –
Colette Burke
(c)
530 – – – – n/a n/a n/a n/a n/a 100 – – – –
Nicky Dulieu 14 9 15 – – n/a n/a n/a n/a n/a (100) (100) 100 – –
Simon Emeny 5 9 4 14 111 n/a n/a n/a n/a n/a 100 – – – –
Situl Jobanputra
(d)
– – – – – n/a n/a n/a n/a n/a – – – – –
Helen Rose
(e)
– – – – – n/a n/a n/a n/a n/a – – – – –
Marion Sears
(f)
(47) 81 – – – n/a n/a n/a n/a n/a – – – – –
UK employees 9 11 8 5 7 (2) (4) 47 100 (100) 3 15 (16) 3 18
a) Annette Court was appointed as Chair with effect from 1 December 2022
b) Kal Atwal stepped down as a non-executive director of the Company on 12 September 2023
c) Colette Burke was appointed as a non-executive director on 1 July 2023
d) Situl Jobanputra was appointed as a non-executive director on 1 March 2024 so analysis is not applicable
e) Helen Rose was appointed as a non-executive director on 1 July 2024 so analysis is not applicable
f) Marion Sears stepped down as a non-executive director of the Company on 7 February 2024
Directors’ remuneration report continued
1 Alternative performance measure defined and explained in the Glossary on page 173
104
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
4.12 Group Chief Executive pay compared to pay of UK employees
The ratios comparing the total remuneration of the Group Chief Executive (as included in the single total figure of
remuneration table on page 101) to the remuneration of the 25th, 50th and 75th percentile of our UK employees are set
out below. The disclosure will build up over time to cover a rolling ten-year period.
We expect the pay ratio to vary from year to year, driven largely by the variable pay outcome for the Group Chief
Executive, which will significantly outweigh any other changes in pay at WHSmith.
Group Chief Executive pay ratios
Financial year ended 31 August Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
2024 Option A 113:1 105:1 82:1
2023 Option A 128:1 128:1 101:1
2022 Option A 87:1 86:1 65:1
2021 Option A 70:1 70:1 52:1
2020 Option A 43:1 41:1 33:1
2019 Option A 239:1 207:1 201:1
WHSmith has chosen to use Option A to calculate its Group Chief Executive pay ratio as it believes that it is the most
robust way for it to calculate the three ratios from the options available in the Regulations.
Total remuneration for all UK full-time equivalent employees of the Company on 31 August 2024 has been calculated in
line with the single figure methodology and reflects their actual earnings received in the financial year ended 31 August
2024 (excluding business expenses). Set out in the table below is the base salary and total pay and benefits for each of
the percentiles.
£ 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
Salary 23,417 24,956 30,872
Total pay and benefits 23,539 25,348 32,539
The Company believes the median pay ratio for the year ended 31 August 2024 is consistent with the pay, reward and
progression policies for the Company’s UK full-time equivalent employees. This group is the most appropriate comparator
for the Group Chief Executive as he is a full-time employee based in the UK and approximately 70 per cent of all WHSmith
employees are based in the UK.
A substantial proportion of the Group Chief Executive’s total remuneration is performance related. The ratios will,
therefore, depend significantly on his annual bonus and LTIP outcome and may fluctuate significantly year to year.
The decrease in the pay ratios in 2024 as compared to 2023 is attributable to the reduction in variable remuneration
received by the Group Chief Executive.
4.13 Relative importance of spend on pay
The table below shows the total cost of remuneration paid to or receivable by all employees in the Group as well as
dividends paid during the financial year ended 31 August 2024. There were no share buybacks during the financial year.
Total cost of remuneration Distributions to shareholders
2024
£m
2023
£m % change
2024
£m
2023
£m % change
386 367 5 41 22 86
4.14 Share plans (audited)
In the financial year ended 31 August 2024, LTIP awards were set at 335 per cent of salary for Carl Cowling and 310 per
cent of salary for Robert Moorhead. As outlined in the Committee Chair’s annual statement, LTIP awards in the financial
year ended 31 August 2025 will be 350 per cent of salary for Carl Cowling and 300 per cent of salary for Max Izzard.
The Committee regularly reviews the performance measures applicable to the LTIP to ensure that they align with the
Company’s strategy and reinforce financial performance. The Committee may change the measures and/or targets in
respect of subsequent awards. The Committee retains a broad discretion to reduce vesting levels, including if it considers
that there would otherwise be a windfall gain or if management fail to deliver on the Company’s ESG expectations.
WH Smith PLC Annual Report and Accounts 2024
105
Strategic report Corporate governance Financial statements Additional information
Directors’ remuneration report continued
The performance measures for awards granted under the LTIP in the financial year ending 31 August 2024 were based
on the following conditions each measured at the end of the three financial years to 31 August 2026:
• 40 per cent based on Headline pre-tax earnings per share (calculated on a pre-IFRS 16 basis) of 121p to 146p with 25
per cent of this component vesting at threshold increasing on a straight-line basis to 100 per cent at maximum. EPS is
defined as fully diluted (including an assumption that the convertible bonds issued in 2020 fully convert into shares)
before exceptional items and excluding IAS 19 pension charges
1
;
• 40 per cent based on relative TSR over three financial years compared with the FTSE All Share Retailers Index.
Threshold vesting will occur for TSR in line with median and maximum vesting will occur for TSR in line with the upper
quartile of the comparator group consistent with prior awards. Deloitte independently carries out the relevant TSR
growth calculation for the Company; and
• 20 per cent based on the Company’s ESG strategy as set out in the table below, with 5 per cent attributed to each target:
Target
Reduction in Scope 1
and2 emissions target
(tonnesCO₂e)
Scope 3 emissions:
Target engagement of
suppliers by emissions
who will have approved
science-based
targets by 2026
Gender Diversity:
% of women in Senior
Leadership team
Ethnic Diversity:
% of employees of
ethnicbackgroundin
Senior Leadership team
Minimum – 25% vesting 8,960 45% 40% 6%
Maximum – 100% vesting 8,491 60% 42% 10%
The Committee is proposing that the performance measures for any awards made in the financial year ending 31 August
2025 will be more strongly linked to the Company’s longer-term financial targets and returns to shareholders given the
importance of this period in the Company’s strategic development. Accordingly, it is proposed that the performance
measures will be based on the following targets each measured over the three financial years ending 31 August 2027:
• 45 per cent based on Headline pre-tax earnings per share (calculated on a pre-IFRS 16 basis) of 132p to 157p with 25per
cent of this component vesting at threshold increasing on a straight-line basis to 100 per cent at maximum. As in
previous years, EPS has been defined as fully diluted and before non-underlying items and excluding IAS 19 pension
charges. This target range is consistent with the successful delivery of the three-year business plan and the Committee
is satisfied that it is significantly stretching in the current environment;
• 45 per cent based on relative TSR over three financial years compared with the FTSE All Share Retailers Index.
Threshold vesting (25 per cent) will occur for TSR in line with median and maximum vesting will occur for TSR in line
with the upper quartile of the comparator group consistent with prior awards. Deloitte independently carries out the
relevant TSR growth calculation for the Company; and
• 10 per cent based on the Company’s ESG strategy as set out in the table below, with 5 per cent attributed to each target:
Target
Reduction in Scope 1 and 2 emissions
target(tonnesCO₂e)
Scope 3 emissions:
Target engagement of suppliers by emissions who will
have approved science-based targets by 2027
Minimum – 25% vesting 8,491 55%
Maximum – 100% vesting 8,021 75%
Outstanding awards
The performance conditions for the awards granted in November 2021 were substantially met and 71 per cent of the
award vested and the remaining 29 per cent lapsed.
Measure Basis of calculation Weighting (%)
Threshold
(25% vests)
Maximum
(100%vests) Actual
% vesting of
maximum award
Earnings per
share (“EPS”)
Headline pre-tax earnings
per share (calculated on a
pre-IFRS 16 basis) subject to
specificadjustments
50% 75p 110p 112p 50%
Relative TSR Position of the Company’s TSR
against TSR of members of the
FTSE All Share Retailers Index
50% Median Upper
quartile
andabove
Ranked 8.9
out of 19
companies
21%
Total Vesting – 71%
1 The Committee has also reserved the flexibility to exclude specific non-recurring investment expenditure that was not included in the Group’s plans at the time the
targets were set. The purpose of this flexibility is to ensure a fair measurement of performance and to avoid the EPS targets acting as a disincentive to any investments
or major projects which the Board may approve to underpin the long-term growth strategy. A full explanation of any excluded costs would be provided at the time of
vesting together with other adjustments as considered appropriate by the Committee (although practice has been to make limited adjustments)
106
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
The Committee determined that the formulaic out-turn under the LTIP was appropriate and should be applied without
discretionary adjustment as it was satisfied that the Company’s TSR was reflective of the Company’s underlying financial
performance and that nothing occurred to negatively impact the performance achieved during the performance period.
Details of the conditional awards (in the form of nil-cost options) to acquire ordinary shares of the Company granted to
executive directors are as follows:
Number of
shares subject
to awards at
31 August
2023
(a)
Number of
shares
subject
to awards
granted
during
the year
Number of
dividend
accrual
shares
awarded
during
the year
Number
of shares
subject
to awards
exercised
during the
year
Number
of shares
subject
to awards
lapsed
during the
year
Number
of shares
subject to
awards at
31 August
2024
(b)
Share price
at date
ofgrant
(pence)
(c)
Face value
of award
atdate of
grant
£’000 Exercise period
Carl Cowling
LTIP 2020
(e)
126,257 – – – 44,190 82,067 1459.33 1,843 19.11.25 – 19.11.30
LTIP 2021
(f)
122,769 – – – – 122,769 1569.00 1,926 19.11.26 – 19.11.31
DBP 2021
(d)
5,422 – 60 2,741 – 2,741 1569.00 128 19.11.22 – 19.11.31
LTIP 2022
(g)
146,430 – – – – 146,430 1372.67 2,010 21.11.27 – 21.11.32
DBP 2022
(d)
36,367 – 407 12,258 – 24,516 1372.67 499 21.11.23 – 21.11.32
LTIP 2023
(h)
– 160,061 – – – 160,061 1306.00 2,090 16.11.28 – 16.11.33
DBP 2023
(d)
– 39,753 – – – 39,753 1306.00 519 16.11.24 –16.11.33
Total 437,245 199,814 467 14,999 44,190 578,337
Robert Moorhead
LTIP 2020
(e)
93,468 – – – 32,714 60,754 1459.33 1,364 19.11.25 – 19.11.30
LTIP 2021
(f)
86,934 – – – – 86,934 1569.00 1,364 19.11.26 – 19.11.31
DBP 2021
(d)
3,524 – 39 1,782 – 1,781 1569.00 83 19.11.22 – 19.11.31
LTIP 2022
(g)
102,349 – – – – 102,349 1372.67 1,405 21.11.27 – 21.11.32
DBP 2022
(d)
27,736 – 310 9,348 – 18,698 1372.67 381 21.11.23 – 21.11.32
LTIP 2023
(h)
– 111,877 – – – 111,877 1306.00 1,461 16.11.28 – 16.11.33
DBP 2023
(d)
– 30,026 – – – 30,026 1306.00 392 16.11.24 –16.11.33
Total 314,011 141,903 349 11,130 32,714 412,419
a) The number of shares subject to awards is the maximum (100 per cent) number of shares that could be received by the executive if the performance targets are fully
met except that, consistent with market practice, any part of the awards which vest will benefit from the accrual of dividend roll-up
b) No awards have been granted to directors between 1 September 2024 and 14 November 2024
c) The share price used for calculating the awards at the date of grant is the average of the middle market quotations for the Company’s Ordinary Shares as derived from
the London Stock Exchange Daily Official List for the three business days prior to the date of grant
d) The awards granted under the DBP will be released one third on each anniversary of the date of grant. Details of the awards are set out above. The awards accrue
the benefit of any dividends paid by the Company and are not subject to performance conditions. In respect of the award granted on 19 November 2021 held by Carl
Cowling, 2,741 shares vested with a total exercise value of £37,073.41 (1,352.55p per ordinary share). In respect of the award granted on 19 November 2021 held by Robert
Moorhead, 1,782 shares vested with a total exercise value of £24,102.45 (1,352.55p per ordinary share). In respect of the award granted on 21 November 2022 held by Carl
Cowling, 12,258 shares vested with a total exercise value of £165,795.64 (1,352.55p per ordinary share). In respect of the award granted on 19 November 2022 held by
Robert Moorhead, 9,348 shares vested with a total exercise value of £126,436.42 (1,352.55p per ordinary share)
e) The performance condition for awards granted in the financial year ended 31 August 2021 under the LTIP was based on the Company’s TSR performance against the
FTSE All Share General Retailers Index constituents. The performance conditions were substantially met with 65 per cent of the shares subject to the awards vesting.
Asa result, the total number of shares vesting for Carl Cowling was 82,985 shares including 918 dividend accrual shares and for Robert Moorhead 61,434 shares including
680 dividend accrual shares. The award is subject to a two year holding period
f) The performance condition for awards granted in the financial year ended 31 August 2022 under the LTIP were:
(i) 50 per cent based on the Company’s TSR performance against the FTSE All Share Retailers Index constituents. Vesting will occur on the following basis: below
median – Nil; median – 25 per cent; upper quartile – 100 per cent; and on a straight-line basis between 25 per cent and 100 per cent; and
(ii) 50 per cent based on growth in the adjusted diluted EPS of the Company. Vesting will occur on the following basis: below 75p – Nil; 75p – 25 per cent; 110p or more –
100 per cent; and on a straight-line basis between 25 per cent and 100 per cent. For these purposes, EPS will be determined by reference to fully diluted EPS before
exceptional items and will exclude IAS 19 pension charges from the calculation, adjusted as considered appropriate by the Committee to ensure consistency. The
awards are subject to a two-year holding period and will become exercisable on the fifth anniversary of the date of grant
The performance conditions were substantially met with 71 per cent of the shares subject to the awards vesting. As a result, the total number of shares vesting for Carl
Cowling will be 90,418 shares including 3,252 dividend accrual shares and for Robert Moorhead 64,026 shares including 2,303 dividend accrual shares. The award is
subject to a two year holding period
g) The performance condition for awards granted in the financial year ended 31 August 2023 under the LTIP were:
(i) 40 per cent based on Headline pre-tax earnings per share (calculated on a pre-IFRS 16 basis) of 100p to 125p with 25 per cent of this component vesting at threshold
increasing on a straight-line basis to 100 per cent at maximum. EPS is defined as fully diluted (including an assumption that the convertible bonds issued in
2020 fully convert into shares) before exceptional items and excluding IAS 19 pension charges together with other adjustments as considered appropriate by the
Committee (although practice has been to make limited adjustments);
(ii) 40 per cent based on relative TSR over three financial years compared with the FTSE All Share Retailers Index. Threshold vesting will occur for TSR in line with
median and maximum vesting will occur for TSR in line with the upper quartile of the comparator group consistent with prior awards; and
(iii) 20 per cent based on the Company’s ESG strategy
h) The awards granted in the financial year ended 31 August 2024 under the LTIP will only vest to the extent that the performance targets as set out on page 106
aresatisfied
None of the Board participate or hold shares in the Company’s Sharesave Scheme.
WH Smith PLC Annual Report and Accounts 2024
107
Strategic report Corporate governance Financial statements Additional information
Directors’ remuneration report continued
4.15 WH Smith Employee Benefit Trust
The WH Smith Employee Benefit Trust (the “Trust”) is used to facilitate the acquisition of ordinary shares in the Company
to satisfy awards granted under the Company’s share plans. The Trust is a discretionary trust, the sole beneficiaries being
employees (including executive directors) and former employees of the Group and their close relations. The Trustee is
Computershare Trustees (C.I.) Limited, an independent professional trustee company based in Jersey. The Company
intends that the ordinary shares in the Trust will be used to satisfy all outstanding awards and options made under the
Company’s share plans. The Trustee may exercise all rights attached to the shares held in the Trust in accordance with
their fiduciary duties and the relevant plan rules or other governing documents. The Trustee has agreed to waive its
rights to all dividends payable on the ordinary shares held in the Trust.
Following purchases of 933,097 shares in the financial year ended 31 August 2024, the number of WH Smith PLC shares
held in the Trust at 31 August 2024 was 1,892,970. The Group’s accounting policy with respect to the Trust is detailed
within Note 1 to the financial statements (see page 126) and movements are detailed in the Group statement of changes
in equity on page 125.
4.16 Dilution limits
Awards under the LTIP are currently satisfied using market purchase shares, which may be acquired by the Trust as
described in the paragraph above. WHSmith’s share plans comply with recommended guidelines on dilution limits,
andthe Company has always operated within these limits.
4.17 Directors’ interests in shares (audited)
The beneficial interests of the directors and their immediate families in the ordinary shares of the Company are set
out below:
Number of shares subject to vesting/holding periods
(a)
Number of shares subject to
performance conditions
Number of ordinary shares DBP LTIP LTIP
(b)
31 August 2024
(or date of
leaving)
31 August 2023
(or date of
appointment
31 August
2024
31 August
2023
31 August
2024
31 August
2023
31 August
2024
31 August
2023
Colette Burke – – – – – – – –
Annette Court 6,900 6,000 – – – – – –
Carl Cowling 45,913 37,965 67,010 41,789 82,067 – 429,260 395,456
Nicky Dulieu 2,500 2,500 – – – – – –
Simon Emeny 4,427 4,427 – – – – – –
Situl Jobanputra
(c)
– – – – – – – –
Robert Moorhead 209,745 203,847 50,506 31,260 60,754 – 301,160 282,751
Helen Rose
(d)
– – – – – – – –
Directors who resigned during the year
Kal Atwal
(e)
3,608 3,608 – – – – – –
Marion Sears
(f)
7,600 7,600 – – – – – –
a) The awards set out under this heading for the DBP are unvested nil-cost options and for the LTIP are vested but unexercised nil-cost options
b) The LTIP number shown above is the maximum potential award that may vest subject to the performance conditions described on pages 105 and 107
c) Situl Jobanputra was appointed as a non-executive director on 1 March 2024
d) Helen Rose was appointed as a non-executive director on 1 July 2024
e) Kal Atwal stepped down as a non-executive director of the Company on 12 September 2023
f) Marion Sears stepped down as a non-executive director of the Company on 7 February 2024
There has been no further change in the directors’ interests shown above between 1 September 2024 and
14 November 2024.
Carl Cowling is required to hold 300 per cent of salary in shares. Robert Moorhead is required to hold 250 per cent of
salary in shares. In accordance with the Policy, Carl Cowling is expected to achieve compliance with the shareholding
requirement within six years of him joining the Board on 26 February 2019.
108
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
As at 31 August 2024 Carl Cowling held 124,923 shares, including shares subject to a holding period (net of tax), with a
value of £1,602,762 (approximately 239 per cent of salary) and Robert Moorhead held 268,712 shares, including shares
subject to a holding period (net of tax), with a value of £3,447,574 (approximately 714 per cent of salary) as detailed below.
The table below sets out the beneficial interests of the executive directors (or any connected persons) in the ordinary
shares of the Company and a summary of the outstanding share awards as at 31 August 2024. Calculations are based on
a share price of 1283p (being the closing share price of a WHSmith share on 31 August 2024).
Shares held Awards over nil-cost options
Name
Number of
shares held
outright at
31Aug 24
Vested but not
exercised at
31Aug 24
1
Unvested and
subject to
performance
measures and
continued
employment
2
Shareholding
requirement
(%of base
salary)
3
Shareholding
as at 31 Aug
24 (%of base
salary)
4
Carl Cowling 45,913 149,077 429,260 300% 239%
Robert Moorhead 209,745 111,260 301,160 250% 714%
1 Nil-cost options and awards that have vested but have yet to be exercised are considered to count towards the shareholding requirement, other than any such shares
that correspond to the estimated income tax and national insurance contributions that would arise on their exercise (estimated at 47 per cent of the award). For Carl
Cowling and Robert Moorhead, these awards include the 2020 LTIP which vested in 2023 and is subject to a two-year holding period and the 2021, 2022 and 2023 DBP
awards which are subject to a holding period as set out on page 107
2 These awards include nil-cost options granted to Carl Cowling and Robert Moorhead under the 2021, 2022 and 2023 LTIP
3 Shareholding requirement as at 31 August 2024
4 Between 1 September 2024 and the date of this report, there were no changes in the beneficial interests of the executive directors’ shareholdings
4.18 Voting at the Annual General Meeting
Statement of voting at 2022 AGM
The table below shows the voting outcome at the Annual General Meeting on 19 January 2022 for approval of the Policy:
Resolution Votes for % for Votes against % against Total votes cast Votes withheld
Approval of Policy 99,470,149 88.36% 13,100,796 11.64% 112,570,945 169,032
Statement of voting at 2024 AGM
The table below shows the voting outcome at the Annual General Meeting on 26 January 2024 for approval of the
annual Directors’ remuneration report:
Resolution Votes for % for Votes against % against Total votes cast Votes withheld
Approval of Directors’ remuneration report 104,580,661 97.08% 3,150,484 2.92% 107,731,145 145,039
A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes “for” and “against”
a resolution.
On behalf of the Board
Nicky Dulieu
Chair of the Remuneration Committee
14 November 2024
WH Smith PLC Annual Report and Accounts 2024
109
Strategic report Corporate governance Financial statements Additional information
Directors’ report
The directors present their report and the audited
consolidated financial statements for the financial year
ended 31 August 2024. The Company is the ultimate
parent company of the WHSmith group of companies
(the “Group”). WH Smith PLC is registered in England
and Wales (Number 5202036) and domiciled in the
United Kingdom.
The Company has chosen, in accordance with Section
414C(11) of the Companies Act 2006, to include certain
information in the Strategic report that would otherwise
be required to be disclosed in this Directors’ report,
as follows:
Information Page number
Likely future developments in the business 3 to 31
Branches outside the UK 22 and 24
Disclosures concerning greenhouse gas
emissions and energy consumption
40 to 52
Employment of disabled persons 55
Employee engagement 53 to 55
Engagement with external stakeholders 33 to 39
Other information, which forms part of this Directors’
report, can be found in the following sections of the
Annual report:
Section Page number
Corporate governance report 68 to 84
Directors’ biographies 66 and 67
Statement of directors’ responsibilities 113
Information on use of financial instruments 154 to 156
This Directors’ report (including information specified
above as forming part of this report) fulfils the
requirements of the Corporate governance statement
forthe purposes of DTR 7.2.
The information required by UK Listing Rule 6.6.1R is
disclosed on the following pages of this Annual report:
Subject matter Page number
Allotment of shares for
cash pursuant to the WH
Smith employee share
incentiveplans
92 Directors’ remuneration
report/Note 22 on page 157 of
the financial statements
Arrangement under which
the WH Smith Employee
Benefit Trust has waived or
agreed to waive dividends/
future dividends
108 Directors’
remunerationreport
Dividends
The Headline Group profit before tax and non-underlying
items
1
for the financial year ended 31 August 2024 was
£166m (2023: £143m). The directors recommend the
payment of a final dividend for the financial year ended
31 August 2024 of 22.6p per ordinary share on 6 February
2025 to members on the Register at the close of business
on 17 January 2025. The final dividend and the interim
dividend of 11.0p per ordinary share paid on 1 August
2024 make a total dividend of 33.6p per ordinary share for
the financial year ended 31 August 2024 (2023: 28.9p).
Share capital
WH Smith PLC is a public company limited by shares.
The issued share capital of the Company, together with
details of shares issued during the year, is shown in Note
22 to the financial statements on page 157.
The issued share capital of the Company as at 31 August
2024 was 130,912,453 ordinary shares of 22
6
⁄
67
p each.
These shares are listed on the London Stock Exchange
and can be held in certificated or uncertificated form.
The Company is not aware of any agreements between
shareholders that may result in restrictions on the transfer
of securities and voting rights.
There are no restrictions on the transfer of ordinary shares
in the Company other than certain restrictions imposed
by laws and regulations (such as insider trading laws and
market requirements relating to closed periods), including
the requirements of the UK Market Abuse Regulation
and the UK Listing Rules, and also the Company’s Share
Dealing Code whereby directors and certain employees
of the Company require Board approval to deal in the
Company’s securities.
The rights and obligations attaching to the Company’s
ordinary shares, in addition to those conferred on their
holders by law, are set out in the Company’s Articles of
Association, a copy of which can be obtained from the
Company’s website whsmithplc.co.uk. The holders of
ordinary shares are entitled to receive the Company’s
Annual Report and Accounts, to attend and speak at
general meetings of the Company, to appoint proxies
and to exercise voting rights, and to receive a dividend,
ifdeclared, subject to the deduction of any sums due
fromthe holder of ordinary shares to the Company on
account of calls or otherwise. Changes to the Company’s
Articles of Association must be approved by special
resolution of the Company.
The Trustee of the WH Smith Employee Benefit Trust
holds ordinary shares in the Company on behalf of the
beneficiaries of the Trust, who are the employees and
former employees of the Group. If any offer is made to
the holders of ordinary shares to acquire their shares,
theTrustee will not be obliged to accept or reject the offer
in respect of any shares, which are at that time subject to
subsisting options, but will have regard to the interests
of the option holders and can consult them to obtain
their views on the offer, and subject to the foregoing,
theTrustee will take the action with respect to the offer
itthinks fair.
1 Alternative performance measure defined and explained in the Glossary on page 173
110
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
Purchase of own shares
At the 2024 AGM, authority was given for the Company to
purchase, in the market, up to 13,091,245 ordinary shares
of 22
6
⁄
67
p each, renewing the authority granted at the 2023
AGM. The Company did not purchase any of its own shares
during the financial year. The Company intends to renew
the authority to purchase its own shares at the forthcoming
AGM as the directors believe that having the flexibility to
buy back shares is in the best interests of the Company.
The directors will only exercise the authority when satisfied
that it is in the best interests of shareholders generally
and that it would result in an increase in earnings per
share. On 11 September 2024, the Company announced
a £50m share buyback programme. During the period
23 September 2024 to 13 November 2024, the Company
purchased and subsequently cancelled 416,955 of its own
shares of 22
6
⁄
67
p, representing 0.32 per cent of the issued
share capital, at an average price of £13.91. All shares
purchased by the Company were cancelled.
Issue of new ordinary shares
The Company did not issue any ordinary shares during
the financial year ended 31 August 2024. The Articles
of Association of the Company provide that the Board
may, subject to the prior approval of the members of the
Company, be granted authority to exercise all the powers
of the Company to allot shares or grant rights to subscribe
for, or convert any security into, into shares, including new
ordinary shares.
Significant agreements/financing
agreements – change of control
A change of control of the Company following a takeover
bid may cause a number of agreements to which the
Company or its trading subsidiaries is party, such as
commercial trading contracts, banking arrangements,
property leases, licence and concession agreements,
to take effect, alter or terminate. In addition, the service
agreements of some senior executives and employee
share plans would be similarly affected on a change
of control, including, in the case of some employees,
inrelation to compensation for loss of office.
The Company has an unsecured £400m revolving credit
facility (“RCF”) with Barclays Bank PLC, BNP Paribas,
Citibank N.A. London Branch, Fifth Third Bank National
Association, HSBC UK Bank PLC, JP Morgan Securities
PLC, PNC Capital Markets LLC, Banco Santander SA
London Branch and Skandinaviska Enskilda Banken
AB (PUBL) for general corporate and working capital
purposes. The RCF has a maturity date of 13 June 2029
with one further uncommitted extension option of one
year, which would, subject to lender approval, extend the
tenor of the RCF to 13 June 2030, if exercised. If there is a
change of control of the Company, and agreeable terms
cannot be negotiated between the parties, any lender
may cancel the commitment under the facility and all
outstanding utilisations for that lender, together with
accrued interest, shall be immediately payable.
The Company has a £327m convertible bond. The Bond
holders have the right to early redemption in the event of
a change of control of the Company.
Directors’ service contracts
Carl Cowling and Max Izzard’s service contracts
provide for notice of 12 months from either party and
Robert Moorhead’s service contract provides for notice
of 12 months from the Company and nine months
from Robert Moorhead. The Chair, who has a letter of
appointment, isappointed for an initial term of three
years. Her appointment may be terminated at any time
by either the Company or the Chair on three months’
notice. The non-executive directors, who have letters of
appointment, are appointed for an initial term of three
years. These appointments can be terminated at any time
by either the Company or the non-executive director
without notice.
Directors’ conflicts
The Company’s Articles of Association permit the Board
to consider and, if it sees fit, to authorise situations where
a director has an interest that conflicts, or may possibly
conflict, with the interests of the Company (“Situational
Conflicts”). The Board has a formal system in place for
directors to declare Situational Conflicts to be considered
for authorisation by those directors who have no interest
in the matter being considered. In deciding whether
to authorise a Situational Conflict, the non-conflicted
directors must act in the way they consider, in good
faith, would be most likely to promote the success of the
Company, and they may impose limits or conditions when
giving the authorisation, or subsequently, if they think
this is appropriate. Any Situational Conflicts considered by
the Board, and any authorisations given, are recorded in
the Board minutes and in a register of conflicts, which is
reviewed regularly by the Board.
Directors’ indemnities
The Company maintained directors’ and officers’ liability
insurance in the financial year ended 31 August 2024
and up to the date of this report, which gives appropriate
cover for any legal action brought against its directors.
The Company has provided and continues to provide an
indemnity for its directors, which is a qualifying third-party
indemnity provision for the purposes of Section 234 of the
Companies Act 2006.
WH Smith PLC Annual Report and Accounts 2024
111
Strategic report Corporate governance Financial statements Additional information
Company’s shareholders
Information provided to the Company pursuant to the
Financial Conduct Authority’s (“FCA”) Disclosure Guidance
and Transparency Rules (“DTRs”) is published on a
Regulatory Information Service and on the Company’s
website. As at 31 August 2024, the following information
had been received, in accordance with DTR5, from holders
of notifiable interests in the Company’s issued share
capital. It should be noted that these holdings may have
changed since notified to the Company.
Holder Number
% as at date
of notification
Nature
of holding
Causeway Capital
Management LLC
10,674,946 8.15 Direct
Boston Partners FKA
Robeco Investment
Management Inc.
7,914,517 6.05 Direct
BlackRock Inc. 10,699,969 8.16 Indirect
FMR LLC 6,982,997 5.33 Indirect
The Capital Group
Companies Inc.
6,394,126 4.88 Indirect
M&G PLC 6,575,480 5.022 Indirect
Marathon Asset
Management LLP
6,539,399 4.99 Indirect
Royal London Asset
Management Ltd
6,539,691 4.99 Direct
On 5 September 2024, Causeway Capital Management
LLC notified the Company of a holding of 11,844,559 shares
(9.05 per cent Direct holding).
On 7 October 2024, FMR LLC notified the Company of a
holding of 6,428,750 shares (4.91 per cent Indirect holding).
On 15 October 2024, Boston Partners FKA Robeco
Investment Management Inc. notified the Company of a
holding of 7,765,841 shares (5.93 per cent Directholding).
On 25 October 2024, Boston Partners FKA Robeco
Investment Management Inc. notified the Company of a
holding of 6,511,894 shares (4.98 per cent Directholding).
The Company received no other notifications in the period
between 31 August 2024 and the date of this report.
Political donations
It is the Company’s policy not to make political donations
and no political donations, contributions or political
expenditure were made in the year (2023: £nil).
Going concern and Viability
The Group’s business activities, together with the
factors that are likely to affect its future developments,
performance and position, are set out in the Strategic
report on pages 3 to 65. The Financial review on pages
26 to 31 of the Strategic report also describes the Group’s
financial position, cash flows and borrowing facilities,
further information on which is detailed in Notes 18 to 21
ofthe financial statements on pages 152 to 156.
As at 31 August 2024, the Group is in a net current liability
position. In addition, Note 21 of the financial statements on
pages 154 to 156 includes the Group’s objectives, policies
and processes for managing its capital; its financial
risk management objectives; details of its financial
instruments and hedging activities; and its exposures
to credit risk and liquidity risk. The Strategic report on
pages 59 to 65 also highlights the principal risks and
uncertainties facing the Group.
The directors are required to assess whether the Group
can continue to operate for a minimum of 12 months from
the date of approval of these financial statements, andto
prepare the financial statements on a going concern
basis. The directors consider that the Group has adequate
resources to remain in operation for the foreseeable
future and have, therefore, continued to adopt the going
concern basis in preparing the financial statements.
The basis of preparation of the financial statements and
a more detailed explanation of the work undertaken
in respect of going concern are set out in Note 1 of the
financial statements on page 126.
The longer-term viability statement is in the Strategic
report on pages 64 to 65.
Independent auditors
PwC has expressed its willingness to continue in office as
auditors of the Company. A resolution to re-appoint PwC
as auditors to the Company and a resolution to authorise
the Audit Committee to determine its remuneration will
be proposed at the AGM.
Disclosure of information to the auditors
Having made the requisite enquiries, as far as each of the
directors is aware, there is no relevant audit information
(as defined in Section 418 of the Companies Act 2006) of
which the Company’s auditors are unaware, and each of
the directors has taken all steps he or she should have
taken as a director in order to make himself or herself
aware of any relevant audit information and to establish
that the Company’s auditors are aware of that information.
Annual General Meeting
The AGM of the Company will be held at the offices
of Herbert Smith Freehills LLP, Exchange House,
PrimroseStreet, London EC2A 2EG on 29 January 2025 at
9.30am. The Notice of Annual General Meeting is given,
togetherwith explanatory notes, in the booklet which
accompanies this report.
This report was approved by the Board on
14 November 2024.
By order of the Board
Ian Houghton
Company Secretary
14 November 2024
Directors’ report continued
112
WH Smith PLC Annual Report and Accounts 2024
Corporate governance
The directors are responsible for preparing the Annual
report and accounts and the financial statements in
accordance with applicable law and regulation.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors have prepared the Group financial statements
in accordance with UK-adopted international accounting
standards and the Company financial statements in
accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting
Standards, comprising FRS 101 “Reduced Disclosure
Framework”, and applicable law).
Under company law, directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group
and Company and of the profit or loss of the Group
for that period. In preparing the financial statements,
thedirectors are required to:
• select suitable accounting policies and then apply
them consistently;
• state whether applicable UK-adopted international
accounting standards have been followed for the Group
financial statements and United Kingdom Accounting
Standards, comprising FRS 101 have been followed
for the Company financial statements, subject to any
material departures disclosed and explained in the
financial statements;
• make judgements and accounting estimates that are
reasonable and prudent; and
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Group
and Company will continue in business.
The directors are responsible for safeguarding the assets of
the Group and Company and hence for taking reasonable
steps for the prevention and detection of fraud and
other irregularities.
The directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Group and Company and enable them to ensure that
the financial statements and the Directors’ remuneration
report comply with the Companies Act 2006.
The directors are responsible for the maintenance
and integrity of the Company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmations
The directors consider that the Annual report and accounts,
taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders
to assess the Group’s and Company’s position and
performance, business model and strategy.
Each of the directors, whose names and functions are
listed in the Directors’ biographies confirms that, to the
best of their knowledge:
• the Group financial statements, which have been
prepared in accordance with UK-adopted international
accounting standards give a true and fair view of
the assets, liabilities, financial position and profit of
the Group;
• the Company financial statements, which have
been prepared in accordance with United Kingdom
Accounting Standards comprising FRS 101, give a true
and fair view of the assets, liabilities, and financial
position of the Company; and
• the Strategic report includes a fair review of the
development and performance of the business and
theposition of the Group and Company, together with
adescription of the principal risks and uncertainties
thatit faces.
Carl Cowling
Group Chief Executive
Robert Moorhead
Chief Financial Officer and Chief Operating Officer
14 November 2024
Statement of directors’ responsibilities in respect
ofthe financial statements
WH Smith PLC Annual Report and Accounts 2024
113
Strategic report Corporate governance Financial statements Additional information
Independent auditors’ report to the members
of WH Smith PLC
Report on the audit of the
financial statements
Opinion
In our opinion:
• WH Smith PLC’s Group financial statements and
Company financial statements (the “financial
statements”) give a true and fair view of the state of the
Group’s and of the Company’s affairs as at 31 August
2024 and of the Group’s profit and the Group’s cash
flows for the year then ended;
• the Group financial statements have been properly
prepared in accordance with UK-adopted international
accounting standards as applied in accordance with the
provisions of the Companies Act 2006;
• the Company financial statements have been properly
prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom
Accounting Standards, including FRS 101 “Reduced
Disclosure Framework”, and applicable law); and
• the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
We have audited the financial statements, included
within the Annual Report and Accounts 2024 (the “Annual
Report”), which comprise: the Group and Company
balance sheets as at 31 August 2024; the Group income
statement and Group statement of comprehensive
income; the Group cash flow statement, and the Group
and Company statements of changes in equity for
the year then ended; and the notes to the financial
statements, comprising material accounting policy
information and other explanatory information.
Our opinion is consistent with our reporting to the
Audit Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable
law. Our responsibilities under ISAs (UK) are further
described in the Auditors’ responsibilities for the audit of
the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance
with the ethical requirements that are relevant to our
audit of the financial statements in the UK, which includes
the FRC’s Ethical Standard, as applicable to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare
that non-audit services prohibited by the FRC’s Ethical
Standard were not provided.
Other than those disclosed in Note 3, we have provided
no non-audit services to the Company in the period
under audit.
Our audit approach
Overview
Audit scope
• For the purposes of scoping the Group audit, we have
identified three financially significant components
which required a full scope audit; High Street, Travel UK,
and North America.
• We also performed a full scope audit on funkypigeon.
com and Hospitals and audited specific financial
statement line items within Travel Rest of the World,
WH Smith Retail Holdings Limited, WH Smith Group
Limited and the Company based on their value relative
to the rest of the Group.
• The audit of the North America component was
performed by PwC Las Vegas.
• Our audit scoping gave us coverage of approximately
85per cent of Group revenue.
• We performed a full statutory audit of the Company
(WH Smith PLC).
Key audit matters
• Impairment of store property, plant & equipment,
software assets and right-of-use assets (Group) and
impairment of investments in subsidiaries (Company)
(Group and Company)
• Inventory valuation (Group)
• Classification and disclosure of non-underlying
items(Group)
Materiality
• Overall Group materiality: £8,400,000 (2023: £8,000,000)
based on 5 per cent of Headline profit before tax and
non-underlying items (2023: professional judgement
considering a number of potential benchmarks
(specifically revenue and profit based benchmarks),
given that some aspects of the business were still in
recovery following the pandemic).
• Overall Company materiality: £8,790,000
(2023: £9,200,000) based on 1 per cent of total assets.
• Performance materiality: £6,300,000 (2023: £6,000,000)
(Group) and £6,592,000 (2023: £6,900,000) (Company).
The scope of our audit
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements.
114
WH Smith PLC Annual Report and Accounts 2024
Financial statements
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the
audit of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect
on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide aseparate
opinion on these matters.
This is not a complete list of all risks identified by our audit.
Classification and disclosure of non-underlying items is a new key audit matter this year. Otherwise, the key audit
matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Impairment of store property, plant & equipment,
software assets and right-of-use assets (Group) and
impairment of investments in subsidiaries (Company)
(Group and Company)
Refer to Note 1(a), Basis of preparation, Non-underlying
items and 1(p) Critical accounting judgements and
key sources of estimation uncertainty and Notes 10, 11
and 12 (Intangible assets, Property, plant & equipment
and Right-of-use assets) and Note 3 in the Company
Financial statements (Investments). The Group has
a material operational retail asset base which may
be vulnerable to impairment in the event of trading
performance being below expectations. In the majority
of cases, for the purposes of impairment testing,
each retail store is considered to be a separate Cash
Generating Unit (CGU). Management performed an
impairment trigger assessment. No triggers were
identified at the Group and operating segment level,
however, specific impairment indicators were identified
for certain CGUs. The subsequent value-in-use-models
resulted in the recognition of a material impairment
charge related to multiple CGUs. We focused on this
area because of the inherent judgement and estimation
uncertainty involved in determining key assumptions
such as the future sales profile and discount rates,
andthe magnitude of the assets under consideration.
The Company had £835m of investments in subsidiary
undertakings. There is a risk that the performance of the
subsidiary undertakings is not sufficient to support their
carrying value and the assets may be impaired.
We obtained management’s impairment trigger
assessment and assessed its methodology for
reasonableness. We considered the underlying data
points and found these to be consistent with other
audit work performed. We challenged the definition
of CGUs and verified that this is appropriate based on
evidence available. We obtained an understanding of
how management had developed its forecast for the
future trading for those CGUs where an impairment
trigger had been identified, including obtaining a
detailed understanding of the key assumptions made in
developing these forecasts. We satisfied ourselves that
the forecasts were reasonable and had been prepared
with appropriate Board involvement. In forming this
conclusion, we benchmarked projections to credible third
party evidence where available. With the assistance of
our valuation experts we tested the impairment models
including challenging management forecasts at the
store level, as well as considering other assumptions
such as the sales profile and discount rate, and found
that these assumptions were reasonable. We assessed
the mathematical accuracy and integrity of the models
and determined that the impairment charge had been
appropriately calculated. Given the estimation uncertainty
inherent in the impairment process, we performed
sensitivity analyses. We satisfied ourselves that any
reasonable possible change that results in a material
adjustment to the impairment charge has been disclosed.
We considered the disclosure of the impairment charge
as a non-underlying item and satisfied ourselves that this
is in line with management’s policy.
For the Company investments in subsidiary undertakings,
we evaluated whether there were any indicators of
an impairment, with specific consideration given to
the following:
• the market capitalisation of the Group, which is
significantly in excess of the investments balance; and
• the trading results of the Group, which are in line
with expectations.
We consider management’s conclusion that there are no
indicators of impairment to be appropriate.
WH Smith PLC Annual Report and Accounts 2024
115
Strategic report Corporate governance Financial statements Additional information
Key audit matter How our audit addressed the key audit matter
Inventory valuation (Group)
Refer to Note 1 (h) Inventories and Note 1 (p) Critical
accounting judgements and key sources of estimation
uncertainty. Inventory consists of a number of product
categories including books, news and magazines,
impulse, stationery, travel essentials and tech accessories.
A large proportion of inventory is supplied through
sale or return arrangements, including the majority of
books, newspapers and magazines and therefore the
valuation of these items are considered to be lower risk.
However, a number of inventory lines are perishable, and
items such as ‘firm sale’ books, fashion, and stationery
are at a greater risk of obsolescence. The Group’s
inventory provision is primarily based on ageing profile,
obsolescence risk and forecast sales performance.
The assumptions inherent in the provision calculation
are consistent with the prior year. Judgement is required
to estimate future sales to clear this inventory and with
respect to alternative exit routes for inventory which
attract different provisioning rates. We focused on the
valuation of the inventory provisions in High Street due
to the size of the balance and the estimates involved
in determining the future sales forecasts and the
complexity of the calculation.
We gained an understanding of each provision category
and analysed the movement between current year and
prior year. By using a combination of ageing analysis and
historical inventory data, including stock turnover and
write-offs, we developed an independent expectation of
the required provisions. We conducted detailed testing
onthe ageing data to ensure its accuracy and reliability.
Our findings indicate that the provisions are consistent
with the Group’s accounting policy and appropriately
reflect changes in the ageing profile. We have confirmed
that the inventory provisions are materially accurate.
Classification and disclosure of non-underlying
items(Group)
Refer to Note 1(a), Basis of preparation, Non-underlying
items and 1(p) Critical accounting judgements and
key sources of estimation uncertainty, Non-underlying
items and Note 4 Non-underlying items. The Group
has presented an alternative performance measure of
“Headline Group profit before tax and non-underlying
items” of £166m (2023: £143m) which is derived
from statutory Group profit before tax of £106m
(2023: £110m) adjusted to remove the impact of IFRS
16 of £3m (2023: £18m) and non-underlying items of
£57m (2023: £15m). Management considers that these
items meet their definition of a ‘non-underlying item’.
We focused on this area due to the quantum and
number of categories of non-underlying items in the
year driven primarily by the commencement of business
wide transformation and restructuring programmes.
Our work focussed on consistency of treatment
and the classification of items in accordance with
management’s policy.
We assessed management’s policy with reference to
guidance published by the European Securities and
Markets Authority (ESMA) and the Financial Reporting
Council (FRC) and satisfied ourselves that categories
identified as non-underlying items are consistent
with management’s policy. To verify the consistency,
weconducted tests on a sample of items, tracing them
back to supporting evidence. Additionally, we assessed
the impact of non-underlying items on bonus targets to
identify any potential increased fraud risk factors based
on the actual results for the period. We assessed the
nature and completeness of management’s disclosures
within the financial statements to ensure that they
accurately reflected the types of costs included in each
category as well as providing guidance over the expected
quantum and time period over which future costs would
be incurred.
Based on our work, we satisfied ourselves that the
treatment of non-underlying items is consistent with
the Group’s policy, and the presentation and disclosure
are appropriate.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we
performed enough work to be able to give an opinion
on the financial statements as a whole, taking into
account the structure of the Group and the Company,
theaccounting processes and controls, and the industry
in which they operate.
For the purposes of scoping the Group audit we have
performed a full scope audit on three financially
significant components (High Street, Travel UK, and North
America) and two other components (funkypigeon.com
and Hospitals). All full scope audits were performed by
the UK Group team with the exception of North America,
which was audited by PwC Las Vegas as component
auditors operating under our instruction. PwC Las Vegas
also performed specified procedures over tax in the North
America component. Audit work was performed over
the consolidation process, tax (considering the results
of the specified procedures), impairment, leases and
going concern at a Group level. Where the work was
performed by the component auditor, we determined
the level of involvement we needed to have in their audit
work to be able to conclude whether sufficient audit
evidence had been obtained as a basis for our opinion
on the Group financial statements as a whole. We held
detailed discussions with the North America component
audit team, including performing a pre-year end site
visit, remote review of the work performed, update calls
on the progress of their fieldwork and by attending
the clearance meetings with management via video
call. The components where we performed audit work
accounted for approximately 85 per cent of revenue.
We performed audit procedures over specific financial
statement line items within Travel Rest of the World,
WH Smith Retail Holdings Limited, WH Smith Group
Independent auditors’ report to the members
of WH Smith PLC continued
116
WH Smith PLC Annual Report and Accounts 2024
Financial statements
Limited and the Company components based on their
value relative to the rest of the Group using an allocation
of Group materiality. We have also performed a statutory
audit over the Company financial statements using a
stand alone materiality.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to
understand the process management adopted to assess
the extent of the potential impact of climate risk on the
Group’s financial statements and support the disclosures
made within the Strategic Report.
We challenged the completeness of management’s
climate risk assessment by reviewing the consistency of
management’s climate impact assessment with internal
climate plans and board minutes, including whether the
time horizons management has used take account of all
relevant aspects of climate change.
Management considers that the impact of climate change
does not give rise to a material financial statement impact.
We considered the impairment of store assets and going
concern to potentially be materially impacted by climate
change and consequently we focused our audit work in
these areas. In particular, we challenged management
on how the impact of their climate commitments would
impact the assumptions within the cash flows used for
the impairment analysis. In addition we ensured that
the going concern and viability assessments were also
consistent with management’s view of the impact of
climate change.
We also considered the consistency of the disclosures in
relation to climate change (including the disclosures in
the Task Force on Climate-related Financial Disclosures
(TCFD) section) within the Annual Report and our
knowledge obtained from our audit.
Materiality
The scope of our audit was influenced by our application
of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures
on the individual financial statement line items and
disclosures and in evaluating the effect of misstatements,
bothindividually and in aggregate on the financial
statements as a whole.
Based on our professional judgement, we determined
materiality for the financial statements as a whole
as follows:
Financial statements – Group Financial statements – Company
Overall
materiality
£8,400,000 (2023: £8,000,000). £8,790,000 (2023: £9,200,000).
How we
determinedit
5 per cent of headline profit before tax and
non-underlying items (2023: professional
judgement considering a number of
potential benchmarks (specifically revenue
and profit based benchmarks), given that
some aspects of the business were still in
recovery following the pandemic).
1 per cent of total assets
Rationale for
benchmark
applied
For overall Group materiality, we chose
Headline profit before tax and non-
underlying items as the benchmark.
Thismeasure removes the impact of non-
underlying items which do not recur year
on year and do not otherwise significantly
affect the underlying trend of performance
from continuing operations. This is the
metric against which the performance of
the Group is most commonly assessed by
management. We chose 5 per cent as this is
consistent with the quantitative materiality
threshold typically used for other profit-
oriented companies.
WH Smith PLC is a holding company for the Group
and therefore the materiality benchmark has been
determined based on total assets, which is a generally
accepted auditing benchmark.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group
materiality. The range of materiality allocated across components was between £990,000 and £7,560,000.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining
the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and
disclosures, for example in determining sample sizes. Our performance materiality was 75 per cent (2023: 75 per cent)
of overall materiality, amounting to £6,300,000 (2023: £6,000,000) for the Group financial statements and £6,592,000
(2023: £6,900,000) for the Company financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements,
riskassessment and aggregation risk and the effectiveness of controls – and concluded that an amount at the
upperend of our normal range was appropriate.
WH Smith PLC Annual Report and Accounts 2024
117
Strategic report Corporate governance Financial statements Additional information
We agreed with the Audit Committee that we would
report to them misstatements identified during our
audit above £420,000 (Group audit) (2023: £400,000)
and£439,000 (Company audit) (2023: £460,000) as well
as misstatements below those amounts that, in our view,
warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s
and the Company’s ability to continue to adopt the going
concern basis of accounting included:
• critically assessed the assumptions within the
models including: assessing the historical accuracy of
management’s forecasts and performing a sensitivity
on the revenue growth assumption to erode the
covenant headroom;
• obtained and reviewed the Group’s
financing agreements;
• considered the assumptions made regarding the extent
of an economic downturn in the severe but plausible
downside case to historical actuals and external sources;
• performed independent sensitivity analyses to the
severe but plausible case to assess the impact on
liquidity and covenant headroom; and
• confirmed that consistent approaches to going concern,
viability, impairment and other key areas of estimation
assumptions have been used
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the Group’s and the Company’s
ability to continue as a going concern for a period of at
least twelve months from when the financial statements
are authorised for issue.
In auditing the financial statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate.
However, because not all future events or conditions can
be predicted, this conclusion is not a guarantee as to
the Group’s and the Company’s ability to continue as a
going concern.
In relation to the directors’ reporting on how they have
applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to
the directors’ statement in the financial statements about
whether the directors considered it appropriate to adopt
the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the
relevant sections of this report.
Reporting on other information
The other information comprises all of the information in
the Annual Report other than the financial statements
and our auditors’ report thereon. The directors are
responsible for the other information. Our opinion on the
financial statements does not cover the other information
and, accordingly, we do not express an audit opinion or,
except to the extent otherwise explicitly stated in this
report, any form of assurance thereon.
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements
or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If we identify an
apparent material inconsistency or material misstatement,
we are required to perform procedures to conclude
whether there is a material misstatement of the financial
statements or a material misstatement of the other
information. If, based on the work we have performed,
we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ report,
we also considered whether the disclosures required by
the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit,
the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the
course of the audit, the information given in the Strategic
report and Directors’ report for the year ended 31 August
2024 is consistent with the financial statements and
has been prepared in accordance with applicable
legal requirements.
In light of the knowledge and understanding of the
Group and Company and their environment obtained
in the course of the audit, we did not identify any
material misstatements in the Strategic report and
Directors’report.
Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’
statements in relation to going concern, longer-term
viability and that part of the corporate governance
statement relating to the Company’s compliance with
the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities
with respect to the corporate governance statement
as other information are described in the Reporting on
otherinformation section of this report.
Independent auditors’ report to the members
of WH Smith PLC continued
118
WH Smith PLC Annual Report and Accounts 2024
Financial statements
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
corporate governance statement is materially consistent
with the financial statements and our knowledge obtained
during the audit, and we have nothing material to add or
draw attention to in relation to:
• The directors’ confirmation that they have carried out a
robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe
those principal risks, what procedures are in place to
identify emerging risks and an explanation of how these
are being managed or mitigated;
• The directors’ statement in the financial statements
about whether they considered it appropriate to
adopt the going concern basis of accounting in
preparing them, and their identification of any material
uncertainties to the Group’s and Company’s ability to
continue to do so over a period of at least twelve months
from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of
the Group’s and Company’s prospects, the period
this assessment covers and why the period is
appropriate;and
• The directors’ statement as to whether they have a
reasonable expectation that the Company will be able
to continue in operation and meet its liabilities as they
fall due over the period of its assessment, including any
related disclosures drawing attention to any necessary
qualifications or assumptions.
Our review of the directors’ statement regarding the
longer-term viability of the Group and Company was
substantially less in scope than an audit and only consisted
of making inquiries and considering the directors’ process
supporting their statement; checking that the statement
is in alignment with the relevant provisions of the UK
Corporate Governance Code; and considering whether
the statement is consistent with the financial statements
and our knowledge and understanding of the Group and
Company and their environment obtained in the course
ofthe audit.
In addition, based on the work undertaken as part of
our audit, we have concluded that each of the following
elements of the corporate governance statement is
materially consistent with the financial statements and
our knowledge obtained during the audit:
• The directors’ statement that they consider the
Annual Report, taken as a whole, is fair, balanced
and understandable, and provides the information
necessary for the members to assess the Group’s and
Company’s position, performance, business model
and strategy;
• The section of the Annual Report that describes the
review of effectiveness of risk management and internal
control systems; and
• The section of the Annual Report describing the work
ofthe Audit Committee.
We have nothing to report in respect of our responsibility
to report when the directors’ statement relating to the
Company’s compliance with the Code does not properly
disclose a departure from a relevant provision of the
Code specified under the Listing Rules for review by
the auditors.
Responsibilities for the financial
statements and the audit
Responsibilities of the directors
forthefinancialstatements
As explained more fully in the Statement of directors’
responsibilities, the directors are responsible for the
preparation of the financial statements in accordance
with the applicable framework and for being satisfied
that they give a true and fair view. The directors are also
responsible for such internal control as they determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group’s and the Company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using
the going concern basis of accounting unless the directors
either intend to liquidate the Group or the Company or
to cease operations, or have no realistic alternative but to
do so.
Auditors’ responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in
the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these financial statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities,
including fraud, is detailed below.
Based on our understanding of the Group and industry,
we identified that the principal risks of non-compliance
with laws and regulations related to GDPR, employment
law and the UK Listing Rules, and we considered the
extent to which non-compliance might have a material
effect on the financial statements. We also considered
those laws and regulations that have a direct impact
on the financial statements such as the Companies Act
2006 and tax regulations. We evaluated management’s
incentives and opportunities for fraudulent manipulation
of the financial statements (including the risk of override
of controls), and determined that the principal risks were
related to manipulation of revenue and management bias
in accounting estimates. The Group engagement team
shared this risk assessment with the component auditors
so that they could include appropriate audit procedures
in response to such risks in their work. Audit procedures
performed by the Group engagement team and/or
component auditors included:
WH Smith PLC Annual Report and Accounts 2024
119
Strategic report Corporate governance Financial statements Additional information
• Reviewing the financial statement disclosures and
agreement to underlying supporting documentation;
• Enquiring of management, those charged with
governance, internal audit, and internal legal counsel
regarding instances of non-compliance with laws and
regulations and fraud;
• Reviewing internal audit reports and minutes of
meetings of those charged with governance;
• Identifying and testing unusual journals posted to
revenue; and
• Challenging assumptions made by management
in determining their significant judgements and
accounting estimates.
There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations
that are not closely related to events and transactions
reflected in the financial statements. Also, the risk of
not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations,
orthrough collusion.
Our audit testing might include testing complete
populations of certain transactions and balances,
possiblyusing data auditing techniques. However,
ittypically involves selecting a limited number of items for
testing, rather than testing complete populations. We will
often seek to target particular items for testing based on
their size or risk characteristics. In other cases, we will use
audit sampling to enable us to draw a conclusion about
the population from which the sample is selected.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website
at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared
for and only for the Company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies
Act 2006 and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report
is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report
to you if, in our opinion:
• we have not obtained all the information and
explanations we require for our audit; or
• adequate accounting records have not been kept by
theCompany, or returns adequate for our audit have
not been received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified
by law are not made; or
• the Company financial statements and the part of the
Directors’ remuneration report to be audited are not in
agreement with the accounting records and returns.
We have no exceptions to report arising from
this responsibility.
Appointment
Following the recommendation of the Audit Committee,
we were appointed by the members on 21 January 2015
to audit the financial statements for the year ended
31 August 2015 and subsequent financial periods.
The period of total uninterrupted engagement is 10
years, covering the years ended 31 August 2015 to
31 August 2024.
Other matter
The Company is required by the Financial Conduct
Authority Disclosure Guidance and Transparency Rules to
include these financial statements in an annual financial
report prepared under the structured digital format
required by DTR 4.1.15R – 4.1.18R and filed on the National
Storage Mechanism of the Financial Conduct Authority.
This auditors’ report provides no assurance over whether
the structured digital format annual financial report has
been prepared in accordance with those requirements.
Jonathan Lambert (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
14 November 2024
Independent auditors’ report to the members
of WH Smith PLC continued
120
WH Smith PLC Annual Report and Accounts 2024
Financial statements
Group income statement
For the year ended 31 August 2024
2024
2023
Before non-Non- Before non-Non-
underlying underlying underlying underlying
£m
Note
items
1
items
2
Total
items
1
items
2
Total
Revenue
2
1,918
–
1,918
1,793
–
1,793
Group operating profit/(loss)
2, 3
213
(55)
158
182
(26)
156
Finance costs
6
(52)
–
(52)
(4 5)
(1)
(46)
Profit/(loss) before tax
161
(55)
106
137
(27)
110
Income tax (expense)/credit
7
(38)
9
(29)
(27)
5
(22)
Profit/(loss) for the year
123
(46)
77
110
(22)
88
Attributable to equity holders of the parent
113
(46)
67
101
(22)
79
Attributable to non-controlling interests
10
–
10
9
–
9
123
(46)
77
110
(22)
88
Earnings per share
Basic
9
51.9p
60.8p
Diluted
9
51.1p
59.8p
All results relate to continuing operations of the Group
1 Alternative performance measure. The Group has defined and explained the purpose of its alternative performance measures in the Glossary on page 173
2 See Note 4 for an analysis of non-underlying items. See Glossary on page 173 for a definition of Alternative performance measures
WH Smith PLC Annual Report and Accounts 2024
121
Strategic report Corporate governance Financial statements Additional information
Group statement of comprehensive income
For the year ended 31 August 2024
£m
Note
2024
2023
Profit for the year
77
88
Other comprehensive income/(loss):
Items that will not be reclassified subsequently to the income statement:
Remeasurement of the recoverability of retirement benefit surplus
26
87
–
Actuarial gains on defined benefit pension schemes
26
2
1
89
1
Items that may be reclassified subsequently to the income statement:
Losses on cash flow hedges
– Net fair value losses
21
–
(3)
Exchange differences on translation of foreign operations
(15)
(40)
(15)
(43)
Other comprehensive income/(loss) for the year, net of tax
74
(42)
Total comprehensive income for the year
151
46
Attributable to equity holders of the parent
142
39
Attributable to non-controlling interests
9
7
151
46
122
WH Smith PLC Annual Report and Accounts 2024
Financial statements
Group balance sheet
As at 31 August 2024
£m
Note
2024
2023
Non-current assets
Goodwill
10
426
436
Other intangible assets
10
64
69
Property, plant and equipment
11
316
270
Right-of-use assets
12
505
444
Investments in joint ventures
2
2
Deferred tax assets
17
33
43
Trade and other receivables
13
12
9
1,358
1 ,273
Current assets
Inventories
217
205
Trade and other receivables
13
150
112
Retirement benefit surplus
26
87
–
Derivative financial assets
21
–
1
Current tax receivable
1
3
Cash and cash equivalents
18
56
56
511
377
Total assets
1,869
1,650
Current liabilities
Trade and other payables
14
(352)
(340)
Bank overdrafts and other borrowings
18
(117)
(84)
Lease liabilities
15
(125)
(116)
Derivative financial liabilities
21
–
(1)
Current tax liability
(1)
(1)
Short-term provisions
16
(4)
(1)
(599)
(543)
Non-current liabilities
Bank loans and other borrowings
18
(310)
(301)
Long-term provisions
16
(13)
(16)
Lease liabilities
15
(501)
(450)
(824)
(767)
Total liabilities
(1,423)
(1, 310)
Total net assets
446
340
Shareholders’ equity
Called up share capital
22
29
29
Share premium
316
316
Capital redemption reserve
25
13
13
Translation reserve
(9)
5
Other reserves
25
(268)
(255)
Retained earnings
335
20 9
Total equity attributable to the equity holders of the parent
416
317
Non-controlling interests
30
23
Total equity
446
340
The consolidated financial statements of WH Smith PLC, registered number 5202036, on pages 121 to 167 were approved
by the Board of Directors and authorised for issue on 14 November 2024 and were signed on its behalf by:
Carl Cowling Robert Moorhead
Group Chief Executive Chief Financial Officer and Chief Operating Officer
WH Smith PLC Annual Report and Accounts 2024
123
Strategic report Corporate governance Financial statements Additional information
Group cash flow statement
For the year ended 31 August 2024
£m
Note
2024
2023
Operating activities
Cash generated from operating activities
20
335
302
Interest paid
1
(42)
(35)
Financing arrangement fees
–
(3)
Income taxes paid
(18)
(15)
Income taxes refunded
–
2
Net cash inflow from operating activities
275
251
Investing activities
Purchase of property, plant and equipment
(115)
(106)
Purchase of intangible assets
(16)
(16)
Acquisition of subsidiaries, net of cash acquired
27
(6)
–
Net cash outflow from investing activities
(137)
(122)
Financing activities
Dividends paid
8
(41)
(22)
Purchase of own shares for employee share schemes
(12)
(8)
Distributions to non-controlling interests
(6)
(6)
Repayments of term loans
18
–
(133)
Net drawdown on short-term borrowings
18
33
84
Capital repayments of obligations under leases
18
(112)
(118)
Net cash outflow from financing activities
(138)
(203)
Net decrease in cash and cash equivalents in the year
–
(7 4)
Opening cash and cash equivalents
56
132
Effect of movements in foreign exchange rates
–
(2)
Closing cash and cash equivalents
18
56
56
1 Includes interest payments of £24m on lease liabilities (2023: £19m)
124
WH Smith PLC Annual Report and Accounts 2024
Financial statements
Group statement of changes in equity
For the year ended 31 August 2024
Total equity
Called up attributable
share capital Capital to the equity Non-
and share redemption Translation Other Retained holders of controlling Total
£mpremium
reserve
1
reserve
reserves
1
earningsthe parentinterestsequity
Balance at 1 September 2023
345
13
5
(255)
209
317
23
340
Profit for the year
–
–
–
–
67
67
10
77
Other comprehensive (loss)/income:
Remeasurement of the recoverability
–
–
–
–
87
87
–
87
ofretirement benefit surplus (Note26)
Actuarial gains on defined benefit
–
–
–
–
2
2
–
2
pension schemes (Note26)
Exchange differences on translation
–
–
(14)
–
–
(14)
(1)
(15)
offoreign operations
Total comprehensive (loss)/income
–
–
(14)
–
156
142
9
151
forthe year
Employee share schemes
–
–
–
(13)
12
(1)
–
(1)
Dividends paid (Note 8)
–
–
–
–
(41)
(41)
–
(41)
Deferred tax on share-based payments
–
–
–
–
(1)
(1)
–
(1)
Distributions to non-controlling interest
–
–
–
–
–
–
(6)
(6)
Non-cash movement on
non-controlling interests
–
–
–
–
–
–
4
4
Balance at 31 August 2024
345
13
(9)
(268)
335
41 6
30
446
Total equity
Called up attributable
share capital Capital to the equity Non-
and share redemption Translation Other Retained holders of controlling Total
£mpremium
reserve
1
reserve
reserves
1
earningsthe parentinterestsequity
Balance at 1 September 2022
345
13
43
(244)
138
295
16
311
Profit for the year
–
–
–
–
79
79
9
88
Other comprehensive (loss)/income:
Cash flow hedges
–
–
–
(3)
–
(3)
–
(3)
Actuarial gains on defined benefit
–
–
–
–
1
1
–
1
pension schemes (Note 26)
Exchange differences on translation
–
–
(38)
–
–
(38)
(2)
(40)
offoreign operations
Total comprehensive (loss)/income
–
–
(38)
(3)
80
39
7
46
forthe year
Employee share schemes
–
–
–
(8)
12
4
–
4
Dividends paid (Note 8)
–
–
–
–
(22)
(22)
–
(22)
Deferred tax on share-based payments
–
–
–
–
1
1
–
1
Distributions to non-controllinginterest
–
–
–
–
–
–
(6)
(6)
Non-cash movement on
non-controlling interests
–
–
–
–
–
–
6
6
Balance at 31 August 2023
345
13
5
(255)
209
317
23
340
1 For further explanation and analysis of Capital redemption reserve and Other reserves, see Note 25
WH Smith PLC Annual Report and Accounts 2024
125
Strategic report Corporate governance Financial statements Additional information
Notes to the financial statements
1. Accounting policies
a) Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with UK-adopted International
Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting
under those standards.
Going concern
The consolidated financial statements have been prepared on a going concern basis.
The directors are required to assess whether the Group can continue to operate for at least 12 months from the date of
approval of these financial statements.
The Strategic report describes the Group’s financial position, cash flows and borrowing facilities and also highlights
the principal risks and uncertainties facing the Group. The Strategic report also sets out the Group’s business activities
together with the factors that are likely to affect its future developments, performance and position. Note 21 outlines the
Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its
financial instruments and hedging activities; and its exposures.
In making the going concern assessment, the directors have undertaken a rigorous assessment of current performance
and forecasts for the 12-month period to November 2025, including expenditure commitments, capital expenditure
and available borrowing facilities. The Group’s borrowing facilities are described in the Strategic report on page 30.
The covenants on these facilities are tested half-yearly and are based on fixed charges cover and net borrowings.
The directors have also considered the existence of factors beyond the going concern period that could indicate that
the going concern basis is not appropriate.
The directors have modelled a base case scenario consistent with the latest Board approved forecasts, which include
management’s best estimates of market conditions and include a number of assumptions including passenger numbers,
revenue growth and cost inflation. Under this scenario the Group has significant liquidity and complies with all covenant
tests throughout the assessment period.
As a result of uncertainty and challenges in the macroeconomic environment, this base case scenario has been stress-
tested by applying severe, but plausible, downside assumptions of a magnitude and profile in line with previous
experience of economic downturns. These assumptions include reductions to revenue assumptions of between five
and ten per cent versus the base case as appropriate by division, additional inflation and margin pressures. Except for
an equal reduction in turnover-based rents in our Travel businesses, this scenario does not assume a decrease in
other variable costs, and is therefore considered severe. Under this downside scenario the Group would continue
to have significant liquidity headroom on its existing facilities and complies with all covenant tests throughout the
assessment period.
Based on the above analysis, the directors have concluded that the Group is able to adequately manage its financing
and principal risks, and that the Group will be able to continue to meet its obligations as they fall due and operate within
the level of its facilities for at least 12 months from the date of approval of these financial statements.
New standards adopted by the Group
The Group has adopted the following standards and interpretations which became mandatory for the year ended
31 August 2024:
IFRS 17 Insurance contracts
Amendments to IAS 12 Taxation and International tax reform – pillar two
model rules
Amendment to IAS 8 Accounting policies, Changes in Accounting Estimates
and Errors
Amendment to IAS 7 and IFRS 7 Supplier finance arrangements
Narrow scope amendments to IAS 1, IAS 8 and
IFRS Practice statement 2
The Group has considered the above new standards and amendments and has concluded that they are either not
relevant to the Group or they do not have a significant impact on the Group’s consolidated financial statements.
126
WH Smith PLC Annual Report and Accounts 2024
Financial statements
1. Accounting policies (continued)
a) Basis of preparation (continued)
New standards in issue but not yet effective
At the date of authorisation of these consolidated Group financial statements, the following standards and
interpretations, which have not been applied in these financial statements, were in issue but not yet effective:
Amendments to IAS 1 Presentation of financial statements on classification
of liabilities and non-current liabilities with covenants
Amendment to IFRS 16 Leases – Lease Liability in a Sale and Leaseback
Amendment to IAS 7 and IFRS 7 Supplier finance arrangements
IFRS 18 Presentation and Disclosure in Financial Statements
With the exception of IFRS 18, the adoption of the above standards and interpretations is not expected to have any
material impact on the Group’s financial statements.
IFRS 18 was issued in April 2024 and is effective for periods beginning on or after 1 January 2027. Early application
is permitted and comparatives will require restatement. The standard will replace IAS 1 Presentation of Financial
Statements. IFRS 18 will not change how items are recognised and measured, rather it will require changes to the
reporting of financial performance. Specifically classifying income and expenses into three new defined categories
– operating, investing and financing – and two new subtotals “operating profit and loss” and “profit or loss before
financing and income tax”, as well as introducing disclosures of management-defined performance measures (“MPMs”)
and enhancing general requirements on aggregation and disaggregation. The impact of the standard on the Group
is currently being assessed and it is not yet practicable to quantify the effect of IFRS 18 on these consolidated financial
statements. IFRS 18 will be applicable for the Group’s Annual report and accounts for the year ending 31 August 2028.
Alternative Performance Measures (“APMs”)
The Group has identified certain measures that it believes will assist the understanding of the performance of the
business. These APMs are not defined or specified under the requirements of IFRS.
The Group believes that these APMs, which are not considered to be a substitute for, or superior to, IFRS measures,
provide stakeholders with additional useful information on the underlying trends, performance and position of the
Group and are consistent with how business performance is measured internally. The APMs are not defined by IFRS
and therefore may not be directly comparable with other companies’ APMs.
The key APMs that the Group uses include: measures before non-underlying items, Headline profit before tax, Headline
earnings per share, trading profit, Headline trading profit, Headline Group profit from trading operations, like-for-like
revenue, gross margin, fixed charges cover, Headline EBITDA, effective tax rate, net debt and Headline net debt,
free cash flow, operating cash flow, return on capital employed and leverage. These APMs are set out in the Glossary
on page 173 including explanations of how they are calculated and how they are reconciled to a statutory measure
where relevant.
Non-underlying items
The Group has chosen to present a measure of profit and earnings per share which excludes certain items, that are
considered non-underlying and are not considered to be part of the normal operations of the Group. The Group believes
that the separate disclosure of these items provides additional useful information to users of the financial statements to
enable a better understanding of the Group’s underlying financial performance.
The Group exercises judgement in determining whether income or expenses are reported as non-underlying.
This assessment includes consideration of the size, nature or cause of occurrence of the item, as well as consistency
with prior periods. Non-underlying items can include, but are not limited to, restructuring and transformation costs
linked to Board agreed programmes, costs relating to M&A activity, impairment charges and other property costs,
significant items relating to pension schemes, amortisation of intangible assets acquired in business combinations,
and the related tax effect of these items. Reversals associated with items previously reported as non-underlying,
such as reversals of impairments and releases of provisions or liabilities are also reported in non-underlying items.
Further details of non-underlying items recognised in the Income statement in the current and prior year are provided
in Note 4.
Items recognised in Other comprehensive income/loss may also be identified as non-underlying for the purposes of
narrative explanation of the Group’s performance, where the Group has determined that they are associated with the
above categories and are judged to have met the Group’s definition of non-underlying.
Accounting convention
The financial statements are drawn up on the historical cost basis of accounting, except for certain financial instruments
and share-based payments that have been measured at fair value. The financial information is rounded to the nearest
million, except where otherwise indicated. The principal accounting policies, which have been applied consistently
throughout both years except as noted above, are set out on the following pages.
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Strategic report Corporate governance Financial statements Additional information
1. Accounting policies (continued)
a) Basis of preparation (continued)
Basis of consolidation
The consolidated Group financial statements incorporate the financial statements of WH Smith PLC and all
its subsidiaries.
Subsidiary undertakings are all entities over which the Group has control. The Group controls an entity when the Group
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred
to the Group.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group
loses control of the subsidiary. Subsidiary undertakings acquired during the year are recorded using the acquisition
method of accounting and their results are included from the date of acquisition. The separable net assets, both
tangible and intangible, of the newly acquired subsidiary undertakings are incorporated into the financial statements
on the basis of the fair value as at the effective date of control. Non-controlling interests are stated at the non-controlling
interests’ proportion of the fair values of the assets and liabilities recognised. Results of subsidiary undertakings disposed
of during the financial year are included in the financial statements up to the effective date of disposal.
A joint venture is an entity in which the Group holds an interest on a long-term basis and which is jointly controlled by
the Group and one or more other venturers under a contractual agreement. Management has assessed whether it
has joint control of the arrangement. Joint control exists only when decisions about the relevant activities require the
unanimous consent of the parties that collectively control the arrangement. In assessing this joint control no significant
judgements have been necessary.
The Group’s share of results of joint ventures is included in the Group consolidated income statement using the
equity method of accounting. The results of joint ventures in the current and prior year are not material to disclose.
Investments in joint ventures are carried in the Group consolidated balance sheet at cost plus post-acquisition changes
in the Group’s share of net assets of the entity less any impairment in value. If the Group’s share of losses in the joint
venture equals or exceeds its investment in the joint venture, the Group does not recognise further losses, unless it has
incurred obligations to do so, or made payments on behalf of the joint venture.
All intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
b) Revenue
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for
the sale of goods and services to customers (which is the most significant revenue stream), sale of wholesale goods to
franchisees, and commission and fee income on concession and franchise arrangements. Revenue excludes discounts,
estimated returns, VAT and other sales-related taxes.
Revenue is recognised when performance obligations have been met and control of the goods has transferred to the
customer. The majority of the Group’s sales are for standalone products made direct to customers at standard prices
either in-store, online or through franchisees, where there is a single performance obligation. Revenue generated
from different store formats are considered to be a single revenue stream and are subject to the same underlying
economic risks.
Revenue on in-store transactions is recognised at the point of sale when control of the goods is deemed to have transferred
to the customer. Revenue in respect of online and wholesale (including sales directly to franchisees) transactions is
recognised on the transfer of control, which is on delivery of the goods to the customers. Revenue in respect of gift cards
sold by the Group is recognised on the redemption of the gift card either in-store at the point of sale or on delivery for
online redemptions. Franchise and concession fees and commission are recognised on the accruals basis in accordance
with the substance of the contracts in place, which is typically on the basis of fixed fees spread evenly over the contract
period, and/or variable amounts earned based on revenue.
c) Supplier arrangements
The Group receives income from its suppliers in the form of supplier incentives and discounts (collectively “Supplier
arrangements”). These incomes are recognised as a deduction from cost of sales on an accruals basis as they are earned
for each supplier contract. The level of complexity and judgement is low in relation to establishing the accounting entries
and estimates, and the timing of recognition.
Supplier incomes that have been invoiced but not received at the year end are recognised in Trade receivables, or in
Trade payables where the Group has the right of offset. Incomes that have been earned but not yet invoiced are accrued
and are recorded in Accrued income.
Notes to the financial statements continued
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WH Smith PLC Annual Report and Accounts 2024
Financial statements
1. Accounting policies (continued)
c) Supplier arrangements (continued)
The types of supplier arrangements recognised by the Group, and the recognition policies are detailed below.
Retrospective discounts
Income earned based on sales or purchase volume triggers set by the supplier for specific products over specific periods.
Income is calculated and invoiced based upon actual sales or purchases over the period set out in the supplier agreement,
and is recognised in the income statement as it is earned. Where the period of an agreement spans accounting periods,
income is recognised based on forecasts for expected sales or purchase volumes, informed by current performance,
trends, and the terms of the supplier agreement. Income is invoiced throughout the year in accordance with the specific
supplier terms. The carrying value of inventories is adjusted to reflect unearned elements of supplier income as the
product has not yet been sold. This income is subsequently recognised in cost of sales when the product has been sold.
Promotional and marketing activity
Supplier income from promotional and marketing activity includes income in respect of in-store marketing and point
of sale, supplying dedicated promotional space or receiving margin support for products on promotion.
Income for promotional and marketing activity is agreed with suppliers for specific periods and products. Income is
recognised over the period of the agreement. Income is invoiced when the performance conditions in the supplier
agreement have been achieved.
d) Retirement benefit costs
Defined contribution pension schemes
Payments to the WH Smith Group defined contribution pension schemes are recognised as an expense in the income
statement as they fall due.
Defined benefit pension schemes
The cost of providing benefits for the United News Shops Retirement Benefits Scheme is determined by the Projected
Unit Credit Method, with actuarial calculations being carried out at the balance sheet date. Actuarial gains and losses
are recognised in full in the year in which they occur. They are recognised outside the income statement in the Group
statement of comprehensive income.
The retirement benefit surplus or obligation recognised in the balance sheet represents the difference between the fair
value of scheme assets and the present value of the defined benefit obligation. Any surplus resulting from the calculation
is limited to the present value of available refunds and reductions in future contributions to the plan. Where the Group is
considered to have a contractual obligation to fund the pension scheme above the accounting value of the liabilities, an
onerous obligation is recognised.
Following the finalisation of the buy-out of the defined benefit liabilities in the Retail Section of the WHSmith Pension
Trust, and confirmation of the Trustee’s intention to return surplus assets to the sponsor, the Group has determined that
it has an unconditional right to the surplus assets, and therefore a retirement benefit surplus has been recognised as a
current asset as at 31 August 2024. Further information is provided in Note 26.
e) Intangible assets
Business combinations
The acquisition of subsidiaries is accounted for using the acquisition method. The consideration transferred is measured
at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control, of the acquiree. Costs directly attributable to the business
combination are recognised in the income statement in the year they are incurred. The cost of a business combination is
allocated at the acquisition date by recognising the acquiree’s identifiable assets, liabilities and contingent liabilities that
satisfy the recognition criteria at their fair values at that date.
The acquisition date is the date on which the acquirer effectively obtains control of the acquiree. Intangible assets are
recognised if they meet the definition of an intangible asset contained in IAS 38 and their fair value can be measured
reliably. The excess of the cost of acquisition over the fair value of the Group’s share of identifiable net assets acquired is
recognised as goodwill.
Where less than the entire equity interest of a subsidiary is acquired, the non-controlling interest is recognised at the
non-controlling interest’s share of the net assets of the subsidiary. Changes in the Group’s ownership percentage of
subsidiaries are accounted for within equity.
WH Smith PLC Annual Report and Accounts 2024
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Strategic report Corporate governance Financial statements Additional information
1. Accounting policies (continued)
e) Intangible assets (continued)
Goodwill
Goodwill represents the excess of the fair value of purchase consideration over the net fair value of identifiable assets
and liabilities acquired.
Goodwill is recognised as an asset at cost and subsequently measured at cost less accumulated impairment. For the
purposes of impairment testing, goodwill is allocated to the cash-generating units (“CGUs”) that have benefited from
the acquisition. Each store is considered to be a CGU, or in some cases a group of stores is considered to be a CGU where
the stores do not generate largely independent cash inflows. Goodwill is allocated to the group of CGUs making up the
Group’s operating segments, as this is the lowest level at which management monitor goodwill.
The carrying value of goodwill is reviewed for impairment at least annually or where there is an indication that goodwill
may be impaired. If the recoverable amount of the group of cash-generating units is less than its carrying amount,
then the impairment loss is allocated first to reduce the carrying amount of the goodwill allocated to the units and then
to the other assets of the units on a pro-rata basis. Any impairment is recognised immediately in the income statement
and is not subsequently reversed.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit and loss
on disposal.
Other intangible assets
The costs of acquiring and developing software that is not integral to the related hardware is capitalised separately
as an intangible asset. These intangibles are stated at cost less accumulated amortisation and impairment losses.
Amortisation is charged so as to write off the costs of assets over their estimated useful lives, using the straight-line
method, and is recorded in Distribution costs. The amortisation period for capitalised software costs is over a maximum
period of five years.
Cloud-based software arrangements are treated as service contracts and expensed in the Group income statement
as the service is received, except where the arrangement meets the requirements for recognition as an intangible
asset of the Group under IAS 38. These criteria are met when the Group has both a contractual right to take possession
of the software without significant penalty, and the ability to run the software independently of the software host.
Configuration and customisation costs in relation to a cloud-based software arrangements are expensed alongside
the related service contract in the consolidated income statement, unless they create a separately identifiable resource
controlled by the Group, in which case they are capitalised.
Other intangible assets are valued at cost and amortised over their useful life, and the amortisation is recorded in
administrative expenses, unless the asset can be demonstrated to have an indefinite life. Other intangible assets, such as
brands, arising on business combinations are amortised on a straight line basis over their useful lives. Amortisation of other
intangible assets arising on business combinations is included in non-underlying costs. The useful life and residual value of
all intangible assets are determined at the time of acquisition and reviewed annually for appropriateness.
The useful economic lives of other intangible assets are as follows:
Software – up to five years
Brands – ten to twenty years
All intangible assets are reviewed for impairment in accordance with IAS 36 Impairment of Assets, when there
are indications that the carrying value may not be recoverable. Assets with indefinite useful lives are tested for
impairment annually .
f) Property, plant and equipment
Property, plant and equipment assets are carried at cost less accumulated depreciation and any recognised impairment
in value. Depreciation is charged so as to write off the costs of assets, other than land, over their estimated useful lives,
using the straight-line method, with the annual rates applicable to the principal categories being:
Freehold properties – over 20 years
Leasehold improvements – either the lease period or the estimated remaining economic life of up to ten years
Fixtures and fittings – up to ten years
Equipment and vehicles – up to ten years
The residual values of property, plant and equipment are reassessed on an annual basis. Where the Group has protected
tenancy rights and there is an intention to renew the lease, the useful life of leasehold improvements is assumed to be
up to ten years, irrespective of the remaining contractual lease term.
Notes to the financial statements continued
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WH Smith PLC Annual Report and Accounts 2024
Financial statements
1. Accounting policies (continued)
f) Property, plant and equipment (continued)
At each balance sheet date, property, plant and equipment is reviewed for impairment if events or changes in
circumstances indicate that the carrying amount may not be recoverable. When a review for impairment is conducted,
the recoverable amount is assessed by reference to the net present value of expected future pre-tax cash flows of the
relevant cash-generating unit, or fair value less costs to sell, if higher. Any impairment in value is charged to the income
statement in the year in which it occurs.
g) Leasing
The Group recognises a right-of-use asset and a corresponding lease liability for all lease arrangements in which it is
the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value
assets. For these leases, the Group recognises the lease payments in distribution costs on a straight-line basis over the
term of the lease.
Lease liabilities are measured at the present value of the future lease payments, which comprise:
• fixed lease payments, less any lease incentives receivable;
• variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
• the amount expected to be payable under residual value guarantees; and
• payments to exercise options, to the extent that the Group is reasonably certain to exercise the options.
The payments are discounted using the rate implicit in the lease, or where that cannot be readily determined, at an
incremental borrowing rate.
Right-of-use assets are measured initially at cost, being the value of the corresponding lease liability, adjusted for lease
payments made at or before the commencement date, initial direct costs and an estimate of the costs to dismantle and
remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required
by the terms and conditions of the lease. The right-of-use assets are presented as a separate line in the consolidated
balance sheet.
Subsequent to initial recognition, the lease liability is reduced for payments made and increased to reflect interest
on the lease liability (using the effective interest method). Right-of-use assets are subsequently measured at cost less
accumulated depreciation and impairment losses.
The Group includes remeasurements and modifications to the lease liability (and makes a corresponding adjustment to
the related right-of-use asset) whenever:
• The lease payments change due to changes in an index, rent review or rate, in which cases the lease liability is
remeasured by discounting the revised lease payments using the initial discount rate.
• A lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the
lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified
impairment loss as described in the accounting policies in Note 1(f) Property, plant and equipment.
Lease contracts that include variable rents based on revenue, which is the case with many of our retail concession
contracts, are not included in the measurement of the lease liability and the right-of-use asset. The related rents payable
are recognised as an expense in the year in which the event or condition that triggers those payables occurs and are
included in profit or loss (see Note 3).
Where a lease term ends and the Group continues to occupy the location on holdover terms, rent is recognised as an
expense in the income statement as incurred.
For leases acquired as part of a business combination, the lease liability is measured at the present value of the
remaining lease payments. The right-of-use asset is measured at the same amount as the lease liability adjusted to
reflect favourable or unfavourable terms of the lease when compared to market terms.
h) Inventories
Inventories comprise goods held for resale and are stated at the lower of cost or net realisable value. Consignment stocks
are not included within stocks held by the Group. Inventories are valued using a weighted average cost method.
Cost is calculated to include, where applicable, duties, handling, transport and directly attributable costs (including a
deduction for applicable supplier income) in bringing the inventories to their present location and condition. Net realisable
value is based on estimated normal selling prices less further costs expected to be incurred in selling and distribution.
Cost of inventories includes the transfer from equity of any gains or losses on qualifying cash flow hedges relating
to purchases.
Provisions are made for obsolescence, markdown below cost and shrinkage.
WH Smith PLC Annual Report and Accounts 2024
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Strategic report Corporate governance Financial statements Additional information
1. Accounting policies (continued)
i) Provisions
Provisions are recognised in the balance sheet when the Group has a present legal or constructive obligation as a
result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the
balance sheet date. Where the effect is material, the provision is determined by discounting the expected future cash
flows at a pre-tax rate which reflects current market assessments of the time value of money and, where appropriate,
the risks specific to the liability.
j) Foreign currencies
The consolidated financial statements are presented in pounds sterling (GBP), which is WH Smith PLC’s functional and
presentation currency. Items included in the financial statements of each of the Group’s subsidiaries are measured using
the currency of the primary economic environment in which the entity operates (the “functional currency”).
On consolidation, the assets and liabilities of the Group’s overseas operations are translated into sterling at exchange
rates prevailing on the balance sheet date. Income and expense items are translated into sterling at the average
exchange rates for the year. Exchange differences arising, if any, are classified as equity and transferred to the Group’s
translation reserve.
Transactions denominated in foreign currencies are recorded at the rates of exchange prevailing on the dates of
the transactions.
At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing
on the balance sheet date. Exchange differences arising on the settlement of monetary items, and on the retranslation
of monetary items, are included in the income statement for the year.
In order to hedge its exposure to certain foreign exchange risks, the Group enters into forward contracts (see below for
details of the Group’s accounting policies in respect of such derivative financial instruments).
k) Taxation
The tax expense included in the income statement comprises current and deferred tax.
Current tax is the expected tax payable or receivable based on the taxable profit or loss for the year, using tax rates that
have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against
which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition (other than in business combination) of other assets and
liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered. Deferred tax
is calculated at the tax rates that are expected to apply in the year when the liability is settled or the asset is realised.
Current and deferred tax is charged or credited in the income statement, except when it relates to items charged or
credited directly to equity, in which case the current or deferred tax is also recognised directly in equity. Deferred tax
assets and liabilities are offset where there is considered to be a legally enforceable right to do so.
l) Financial instruments
Financial assets and liabilities are recognised in the Group’s balance sheet when the Group becomes party to the
contractual provisions of the instrument.
i) Initial recognition and subsequent measurement
a) Financial assets
Trade and other receivables
Trade receivables are measured at fair value at initial recognition, do not carry any interest and are subsequently measured
at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts
are recognised in the income statement.
Allowances for doubtful debts are recognised based on management’s expectation of losses, without regard to whether
an impairment trigger has occurred or not (an “expected credit loss” model under IFRS 9).
Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits with an
original maturity of three months or less. Credit card receivables are included in cash and cash equivalents.
Notes to the financial statements continued
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WH Smith PLC Annual Report and Accounts 2024
Financial statements
1. Accounting policies (continued)
l) Financial instruments (continued)
i) Initial recognition and subsequentmeasurement (continued)
b) Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities.
Borrowings
Borrowings comprise interest-bearing bank loans and overdrafts and compound financial instruments
(convertible bonds).
Bank loans are initially measured at fair value (being proceeds received, net of direct issue costs), and are subsequently
measured at amortised cost, using the effective interest rate method. Transaction fees such as arrangement fees
associated with the securing of financing are capitalised and amortised through the income statement over the term of
the relevant facility. Finance charges, including premiums payable on settlement or redemptions and direct issue costs
are accounted for on an accruals basis and taken to the income statement using the effective interest rate method and
are added to the carrying value of the instrument to the extent that they are not settled in the year in which they arise.
Compound financial instruments issued by the Group comprise convertible bonds. The convertible bonds are
bifurcated into a liability component and an equity component on initial recognition. The carrying value of the liability
at initial recognition is measured using a market interest rate for an equivalent non-convertible bond at the issue date.
The remainder of the proceeds is allocated to the conversion option and recognised in equity (Other reserves), and not
subsequently remeasured. Any directly attributable transaction costs are allocated to each component in proportion to
their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised
cost using the effective interest method. Any transaction costs apportioned to the liability is included in the carrying
amount and recognised over the contractual life of the liability using the effective interest rate method.
Trade and other payables
Trade and other payables are initially measured at fair value and are subsequently measured at amortised cost, using the
effective interest rate method.
Equity instruments
Equity instruments issued are recorded at the proceeds received, net of direct issue costs.
ii) Derecognition of financial assets and liabilities
a) Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it
transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards
of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the
risks and rewards of ownership and it does not retain control of the financial asset.
b) Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
The Group also derecognises a financial liability when a qualitative review of its contractual terms shows that the terms
have been significantly changed or where the cash flows of the modified liability are substantially different, in which
case a new financial liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration
paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
iii) Offsetting
Financial assets and financial liabilities are offset and the net position presented in the balance sheet when, and only
when, the Group has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis
or to realise the asset and settle the liability simultaneously.
iv) Impairment
The Group recognises loss allowances for expected credit losses (“ECLs”) on financial assets measured at amortised cost.
These are always measured at an amount equal to lifetime ECL. The maximum period considered when estimating ECLs
is the maximum contractual period over which the Group is exposed to credit risk.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and
when estimating ECL, the Group considers reasonable and supportable information that is relevant and available
without undue cost or effort.
This includes both qualitative and quantitative information and analysis, based on the Group’s historical experience and
informed credit assessment and forward-looking information.
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Strategic report Corporate governance Financial statements Additional information
1. Accounting policies (continued)
l) Financial instruments (continued)
iv) Impairment (continued)
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the
assets. The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is
no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have
the assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off.
However, financial assets that are written off could still be subject to enforcement activities in order to comply with the
Group’s procedures for recovery of amounts due.
v) Derivative financial instruments and hedge accounting
The Group uses certain derivative financial instruments to reduce its exposure to foreign exchange movements in
accordance with its risk management policies. The Group primarily uses forward foreign currency contracts to manage
its exposure to changes in foreign exchange rates. The Group does not hold or use derivative financial instruments for
speculative purposes. Further details of the Group’s risk management policies are provided in Note 21.
These instruments are initially recognised at fair value on the trade date and are subsequently measured at their fair
value at the end of the financial year. The method of recognising the resulting gain or loss is dependent on whether
the derivative is designated as a hedging instrument and the nature of the items being hedged.
Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash
flows are recognised directly in equity and any ineffective portion is recognised immediately in the income statement.
If the cash flow hedge of a highly probable forecasted transaction results in the recognition of an asset or liability, then,
at the time the asset or liability is recognised, the associated gains or losses on the derivative that had previously been
recognised in equity are included in the initial measurement of the asset or liability. For hedges that do not result in the
recognition of an asset or a liability, amounts deferred in equity are recognised in the income statement in the same
period as the hedged item.
For an effective hedge of an exposure to changes in the fair value of a recognised asset or liability, changes in fair value
of the hedging instrument are recognised in profit or loss at the same time that the recognised asset or liability that is
being hedged is adjusted for movements in the hedged risk and that adjustment is also recognised in profit or loss in
the same period.
Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in
the income statement as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no
longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised
in equity is retained in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to
occur, the net cumulative gain or loss recognised in equity is transferred to profit or loss.
Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when
their risks and characteristics are not closely related to those of host contracts and the host contracts are not carried at
fair value with unrealised gains or losses reported in the income statement.
m) Share schemes
WH Smith Employee Benefit Trust
The shares held by the WH Smith Employee Benefit Trust are valued at the historical cost of the shares acquired.
They are deducted in arriving at shareholders’ funds and are presented as an Other reserve.
Share-based payments
Employees of the Group receive part of their remuneration in the form of share-based payment transactions, whereby
employees render services in exchange for shares or rights over shares (equity settled transactions).
Equity settled share-based payments are measured at fair value at the date of grant. The fair value is calculated using an
appropriate option pricing model. The fair value is expensed to the income statement on a straight-line basis over the
vesting period, based on the Group’s estimate of the number of shares that will eventually vest.
For cash-settled share-based payments, a liability is recognised at the current fair value determined at each balance
sheet date, taking into account performance conditions and the extent to which employees have rendered service to
date, with any changes in fair value recognised in the profit or loss for the year.
n) Dividends
Final dividends are recorded in the financial statements in the year in which they are approved by the Company’s
shareholders. Interim dividends are recorded in the year in which they are approved and paid.
Notes to the financial statements continued
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WH Smith PLC Annual Report and Accounts 2024
Financial statements
1. Accounting policies (continued)
o) Share capital, Share premium and Other reserves
Ordinary shares are classified as equity. Share premium arises on the excess between the fair value of the shares issued
and the par value of the shares issued. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, against share premium. The par value of shares repurchased and cancelled
under the Group’s share buyback programme is reclassified from Share capital to the Capital redemption reserve.
For a description of Other reserves, see Note 25.
p) Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make judgements, estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates
and any subsequent changes are accounted for with an effect on income at the time such updated information
becomes available.
The most critical accounting judgements and sources of estimation uncertainty in determining the financial condition
and results of the Group are those requiring the greatest degree of subjective or complex judgement. These relate to
the classification of items as non-underlying, assessment of lease substitution rights, determination of the lease term,
impairment reviews of non-current assets and inventory valuation.
Consideration of climate-related matters
In preparing the Financial statements, management has considered the potential impacts of climate change, in
the context of the Principal risks and TCFD disclosures included in the Strategic report on pages 44 to 52 in the
following areas:
• going concern assessment and viability of the Group over the next three years;
• cash flow forecasts used in the impairment assessments of non-current assets including goodwill;
• carrying value and useful economic lives of property, plant and equipment, right-of-use assets and intangible assets; and
• carrying value of inventories and valuation of other current assets.
Current assets, including inventories, are expected to be utilised within a short timeframe, and therefore no risks relating
to climate change have been identified.
The costs expected to be incurred in connection with our net zero commitments (as described on pages 44 to 52) are
included within the Group’s budget and three-year plan, which have been used to support the impairment reviews
of non-current assets, including goodwill, and the going concern and viability assessments. Further disclosures in
relation to the impact of climate change on the impairment assessment of right-of-use assets and property, plant and
equipment are included in Note 11, and on goodwill in Note 10.
The Group’s initial quantitative scenario analysis (as described on pages 44 to 52) has determined that operational
impacts are not expected to be significant within the short-term forecast period. Beyond the forecast periods, the
results of the quantitative scenario analysis have been incorporated into the sensitivity analyses of viability and goodwill
impairment where appropriate, however climate change is not considered to be a key driver in determining the
outcomes of these exercises and is therefore not currently classified as a key source of estimation uncertainty within our
financial statements. This assessment will be kept under review going forward.
Critical accounting judgements
Non-underlying items
The Group has chosen to present a measure of profit and earnings per share which excludes certain items, that are
considered non-underlying and exceptional due to their size, nature or incidence, and are not considered to be part of
the normal operations of the Group. The Group’s definition of non-underlying items is outlined in Note 1(a).
The classification of items as non-underlying requires management judgement. The definition of non-underlying items
has been applied consistently year on year. Further details of non-underlying items are provided in Note 4.
Lease accounting
Substantive substitution rights
Judgement is required in determining whether a contract meets the definition of a lease under IFRS 16. Management has
determined that certain retail concession contracts give the landlord substantive substitution rights because the contract
gives the landlord rights to relocate the retail space occupied by the Group. In such cases, management has concluded
that there is not an identified asset and therefore such contracts are outside the scope of IFRS 16. For these contracts,
the Group recognises the payments as an operating expense on a straight-line basis over the term of the contract unless
another systematic basis is more representative of the time pattern in which economic benefits from the underlying
contract are consumed.
WH Smith PLC Annual Report and Accounts 2024
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Strategic report Corporate governance Financial statements Additional information
1. Accounting policies (continued)
p) Critical accounting judgements and key sources of estimation uncertainty (continued)
Determination of lease term
In determining the lease term for contracts that have options to extend or terminate early at the Group’s discretion,
management has applied judgement in determining the likelihood of whether such options will be exercised. This is
based on the length of time remaining before the option is exercisable, performance of the individual store and the
trading forecasts.
Sources of estimation uncertainty
Intangible assets, property, plant and equipment and right-of-use asset impairment reviews
Property, plant and equipment, right-of-use assets and intangible assets are reviewed for impairment if events or
changes in circumstances indicate that the carrying amount may not be recoverable. When a review for impairment
is conducted, the recoverable amount of an asset or a cash-generating unit is determined based on value-in-use
calculations prepared on the basis of management’s assumptions and estimates. For impairment testing purposes,
the Group has determined that each store is a separate CGU or in some cases a group of stores is considered to be a
CGU where the stores do not generate largely independent cash inflows.
The key assumptions in the value-in-use calculations include growth rates of revenue and the pre-tax discount rate.
Value-in-use calculations will assume a lease is extended where management consider it likely that an extension will be
granted. Further information in respect of the Group’s intangible assets, property, plant and equipment and right-of-use
assets is included in Notes 10, 11 and 12 respectively.
Inventory valuation
Inventory is carried at the lower of cost and net realisable value, which requires the estimation of sell through rates,
and the eventual sales price of goods to customers in the future. Any difference between the expected and the actual
sales price achieved will be accounted for in the year in which the sale is made. A description of the Group’s accounting
policy in respect of inventories is included in Note 1(h). A sensitivity analysis has been carried out on the calculation of
inventory provisions. The key assumption driving the stock provision calculation is forecast revenue.
2. Segmental analysis of results
IFRS 8 requires segment information to be presented on the same basis as that used by the Chief Operating Decision
Maker for assessing performance and allocating resources. The Group’s operating segments are based on the reports
reviewed by the Board of Directors who are collectively considered to be the chief operating decision maker.
For management and financial reporting purposes, the Group is organised into two operating divisions which comprise
four reportable segments – Travel UK, North America, Rest of the World within the Travel division, and High Street.
The information presented to the Board is prepared in accordance with the Group’s IFRS accounting policies, with the
exception of IFRS 16, and is shown below as Headline information in Section b). A reconciliation to statutory measures is
provided below in accordance with IFRS 8, and in the Glossary on page 173 (Note A2).
a) Revenue
£m
2024
2023
Travel UK
795
709
North America
401
380
Rest of the World
270
235
Total Travel
1,466
1,324
High Street
452
469
Revenue
1,918
1,793
Rest of the World revenue includes revenue from Australia of £83m (2023: £82m), Ireland £53m (2023: £47m) and Spain
£55m (2023: £46m). No other country has individually material revenue in the context of total Group revenue.
Notes to the financial statements continued
136
WH Smith PLC Annual Report and Accounts 2024
Financial statements
2. Segmental analysis of results (continued)
b) Group results
2024
2023
Headline Headline
before non- Headline non- before non- Headline non-
underlying underlying underlying underlying
items
1
items
1
items
1
items
1
£m (pre-IFRS 16)
(pre-IFRS 16)
IFRS 16
Total
(pre-IFRS 16)
(pre-IFRS 16)
IFRS 16
Total
Travel UK trading profit/(loss)
122
–
4
126
102
–
(1)
101
North America trading profit
54
–
4
58
49
–
3
52
Rest of the World trading profit
13
–
5
18
13
–
–
13
Total Travel trading profit
189
–
13
202
164
–
2
166
High Street trading profit
32
–
7
39
32
–
11
43
Group profit from
trading operations
221
–
20
241
196
–
13
209
Unallocated central costs
(28)
–
–
(28)
(27)
–
–
(27)
Group operating profit before
non-underlying items
193
–
20
213
169
–
13
182
Non-underlying items (Note 4)
–
(56)
1
(55)
–
(13)
(13)
(26)
Group operating profit/(loss)
193
(56)
21
158
169
(13)
–
156
Finance costs
(27)
–
(25)
(52)
(26)
–
(19)
(45)
Non-underlying finance
–
(1)
1
–
–
(2)
1
(1)
(costs)/income (Note 4)
Profit/(loss) before tax
166
(57)
(3)
106
143
(15)
(18)
110
Income tax (expense)/credit
(39)
9
1
(29)
(28)
2
4
(22)
Profit/(loss) for the year
127
(48)
(2)
77
115
(13)
(14)
88
1 Presented on a pre-IFRS 16 basis. Alternative performance measures are defined and explained in the Glossary on page 173
c) Other segmental items
2024
Non-current assets
2
Right-of-use assets
Depreciation
Capital and
£m additions
amortisation
Impairment
Depreciation
Impairment
Travel UK
35
(20)
–
–
–
North America
60
(16)
–
–
–
Rest of the World
14
(8)
–
–
–
Total Travel
109
(44)
–
–
–
High Street
22
(15)
–
–
–
Unallocated
–
(1)
–
–
–
Headline, before non-underlying items (pre-IFRS 16)
131
(60)
–
–
–
Headline non-underlying items (pre-IFRS 16)
–
(3)
(23)
–
–
Headline, after non-underlying items (pre-IFRS 16)
131
(63)
(23)
–
–
Impact of IFRS 16
–
(1)
3
(112)
–
Non-underlying items (IFRS 16)
–
–
–
–
(10)
Group
131
(64)
(20)
(112)
(10)
2 Non-current assets including property, plant and equipment and intangible assets (excluding goodwill), but excluding right-of-use assets
WH Smith PLC Annual Report and Accounts 2024
137
Strategic report Corporate governance Financial statements Additional information
2. Segmental analysis of results (continued)
c) Other segmental items (continued)
2023
Non-current assets
1
Right-of-use assets
Depreciation
Capital and
£m additions
amortisation
Impairment
Depreciation
Impairment
Travel UK
30
(17)
–
–
–
North America
47
(13)
–
–
–
Rest of the World
17
(6)
–
–
–
Total Travel
94
(36)
–
–
–
High Street
28
(15)
–
–
–
Unallocated
–
(2)
–
–
–
Headline, before non-underlying items (pre-IFRS 16)
122
(53)
–
–
–
Headline non-underlying items (pre-IFRS 16)
–
(3)
(4)
–
–
Headline, after non-underlying items (pre-IFRS 16)
122
(56)
(4)
–
–
Impact of IFRS 16
–
–
–
(104)
–
Non-underlying items (IFRS 16)
–
–
–
–
(15)
Group
122
(56)
(4)
(104)
(15)
1 Non-current assets including property, plant and equipment and intangible assets (excluding goodwill), but excluding right-of-use assets
d) Non-current assets by geographical location
Non-current assets include property, plant and equipment, intangible assets and right-of-use assets.
£m
2024
2023
UK
435
396
USA
735
704
Spain
89
84
Australia
18
18
Other international
34
17
Total
1,311
1,219
3. Group operating profit
2024
2023
Before non- Non- Before non- Non-
underlying underlying underlying underlying
£m items
items
Total
items
items
Total
Revenue
1,918
–
1,918
1,793
–
1,793
Cost of sales
(706)
–
(706)
(682)
–
(682)
Gross profit
1,212
–
1,212
1,111
–
1,111
Distribution costs
(808)
–
(808)
(746)
–
(746)
Administrative expenses
(198)
–
(198)
(197)
–
(197)
Other income
2
7
–
7
14
–
14
Non-underlying items (Note 4)
–
(55)
(55)
–
(26)
(26)
Group operating profit
213
(55)
158
182
(26)
156
2 Other income includes remeasurement of right-of-use assets and other property-related income. Other income in the prior year also includes insurance recoveries
Notes to the financial statements continued
138
WH Smith PLC Annual Report and Accounts 2024
Financial statements
3. Group operating profit (continued)
£m
2024
2023
Cost of inventories recognised as an expense
706
682
Write-down of inventories in the year
1
1
3
Depreciation of property, plant and equipment
49
42
Depreciation of right-of-use assets
– land and buildings
110
101
– other
2
3
Amortisation of intangible assets
15
14
Impairment of property, plant and equipment
15
4
Impairment of right-of-use assets
10
15
Impairment of intangibles
5
–
Expenses relating to leasing:
– expense relating to short-term leases
20
22
– expense relating to variable lease payments not included in the measurement of the lease liability
38
29
Other occupancy costs
44
49
Staff costs (Note 5)
386
367
Auditors’ remuneration (see below)
Audit services
Fees payable to the Group’s auditors, included in the income statement, relate to:
Fees payable to the Group’s auditors for the audit of the Group’s financial statements
1.2
1.1
Fees payable to the Group’s auditors for other services to the Group including the audit of the
Company’s subsidiaries
0.4
0.3
Total audit and audit-related services
1.6
1.4
Non-audit services
Fees payable to the Group’s auditors for other services:
All other non-audit services
0.1
0.1
Non-audit fees including taxation and other services
0.1
0.1
Total auditors’ remuneration
1.7
1.5
Included in Administrative expenses is the auditors’ remuneration, including expenses, for audit and non-audit services,
payable to the Group’s auditors PricewaterhouseCoopers LLP and its associates as set out above. A description of the
work performed by the Audit Committee is set out in the Corporate governance section of the Directors’ report and
includes an explanation of how auditor objectivity and independence are safeguarded when non-audit services are
provided by auditors.
1 Write-down of inventories in the year are included within the amounts disclosed as Cost of inventories recognised as an expense, and recognised in Cost of sales
WH Smith PLC Annual Report and Accounts 2024
139
Strategic report Corporate governance Financial statements Additional information
4. Non-underlying items
Items which are not considered part of the normal operations of the business, are non-recurring or are considered
exceptional because of their size, nature or incidence, are treated as non-underlying items and disclosed separately.
Further details of non-underlying items are included in Note 1, Accounting policies and in the Strategic report on
page 28. The charge is mainly non-cash.
£m
2024
2023
Amortisation of acquired intangible assets
3
3
Impairment of non-current assets
– property, plant and equipment
15
4
– intangible assets
5
–
– right-of-use assets
10
15
Provisions for onerous contracts
6
3
Transformation programmes – supply chain and IT
9
–
Costs associated with pensions
2
1
IFRS 16 remeasurement gains
(3)
–
Costs relating to M&A activity and Group legal entity structure
4
–
Re-platform of whsmith.co.uk and other costs
4
–
Non-underlying items, included in operating profit
55
26
Finance costs associated with refinancing
–
1
Non-underlying items, before tax
55
27
Tax credit on non-underlying items
(9)
(5)
Non-underlying items, after tax
46
22
Amortisation of acquired intangible assets
Amortisation of acquired intangible assets primarily relates to the MRG and InMotion brands (see Note 10).
Impairment of non-current assets
The Group has carried out an assessment for indicators of impairment of non-current assets across the store and
online portfolio. Where an indicator of impairment has been identified, an impairment review has been performed
to compare the value-in-use of cash-generating units, based on management’s assumptions regarding likely future
trading performance, anchored in the latest Board-approved budget and three-year plan, to the carrying value of the
cash-generating unit as at 31 August 2024.
As a result of this exercise, a non-cash charge of £30m (2023: £19m) was recorded within non-underlying items for
impairment of non-current assets, of which £15m (2023: £4m) relates to property, plant and equipment, £5m (2023: £nil)
relates to intangible assets and £10m (2023: £15m) relates to right-of-use assets.
Refer to Notes 10, 11 and 12 for details of impairment of intangible assets, property, plant and equipment and right-of-use
assets, respectively.
The impairment recognised on a pre-IFRS 16 basis is provided in the Glossary on page 173.
Provisions for onerous contracts
A charge of £6m (2023: £3m) has been recognised in the income statement to provide for the unavoidable costs of
continuing to service a number of non-cancellable supplier and lease contracts where the space is vacant, a contract
is loss-making or currently not planned to be used for ongoing operations. This provision will be utilised over the next
two to four financial years. The unwinding of the discount on provisions for onerous contracts is treated as an imputed
interest charge, and has been recorded in non-underlying finance costs.
Transformation programmes
Costs of £9m (Aug 2023: £nil) have been classified as non-underlying in relation to a number of Board-approved
programmes relating to supply chain (£4m) and IT transformation (£5m).
The supply chain transformation programme includes costs related to outsourcing the Group’s distribution centres
and core distribution network to a third party (GXO) and costs of reconfiguration of the Group’s UK distribution centres,
in order to generate a more efficient and productive supply chain to support the performance and growth of the Group’s
UK businesses. This project is expected to conclude in 2025, incurring similar costs as in 2024.
Notes to the financial statements continued
140
WH Smith PLC Annual Report and Accounts 2024
Financial statements
4. Non-underlying items (continued)
The IT transformation programme includes costs relating to upgrading core IT infrastructure, data migration and
investment in data security, store systems modernisation and other significant IT projects. These strategic projects will
provide additional stability, longevity and operational benefits. The implementation will cover several years and we
anticipate costs in 2025 to be similar to 2024.
These multi-year programmes are reported as non-underlying items on the basis that they are significant in quantum,
relate to a Board-approved programme and to aid comparability from one period to the next.
Costs associated with pensions
Costs of £2m (2023: £1m) have been incurred relating to professional fees associated with the buy out of the WHSmith
Pension Trust.
This resulted in the recognition of an £87m gain being remeasurement of the recoverability of the retirement benefit
surplus, which is included in the Group’s Statement of other comprehensive income, in accordance with IAS 19.
Subsequent to the completion of the buyout, on 10 September the remaining surplus in the scheme of £87m was
transferred to the Group, comprising cash of £75m and investments of £12m.
See Note 26 for further details.
IFRS 16 remeasurement gains
Gains of £3m have been classified as non-underlying in relation to IFRS 16 remeasurement gains that have resulted from
the derecognition of lease liabilities on exit from certain locations, in which right-of-use assets were previously impaired.
Cost relating to M&A activity and Group legal entity structure
Costs incurred during the year include c.£2m of professional and legal fees in relation to a reorganisation of the Group’s
legal entity structure, and c.£1m relating to acquisition and integration costs of two small acquisitions in Ireland and
Australia, and c.£1m relating to final integration costs of the North American businesses.
Re-platform of whsmith.co.uk and other costs
Other non-underlying items recognised during the year of £4m include restructuring costs, stock write-offs and IT
costs in relation to the reconfiguration of the Group’s online operations, and costs associated with the resolution of a
long-running dispute.
A tax credit of £9m (2023: £5m) has been recognised in relation to non-underlying items.
Other prior year non-underlying items
Costs associated with refinancing
A charge of £1m was included in non-underlying items in the year ended 31 August 2023 to derecognise the carrying
value of unamortised fees in respect of the extinguished term loan and revolving credit facility. See Note 18.
5. Staff costs and employees
a) Staff costs
The aggregate remuneration of employees was:
£m
2024
2023
Wages and salaries
340
322
Social security costs
28
27
Other pension costs
7
6
Share-based payments
11
12
Total Group
386
367
b) Employee numbers
The monthly average total number of employees (including executive directors) was:
No. of employees
2024
2023
Total retailing
13,867
14,124
Support functions
54
53
Total Group
13,921
14,177
WH Smith PLC Annual Report and Accounts 2024
141
Strategic report Corporate governance Financial statements Additional information
6. Finance costs
£m
2024
2023
Interest payable on bank loans and overdrafts
13
12
Interest on convertible bonds
14
14
Interest on lease liabilities
25
19
Costs associated with refinancing
–
1
52
46
Interest on convertible bonds includes £5m (2023: £5m) coupon interest, £8m (2023: £8m) non-cash debt accretion charges
and £1m (2023: £1m) fee amortisation. Prior year costs associated with refinancing were included in non-underlying items
(see Note 4).
7. Income tax expense
£m
2024
2023
Tax on profit
21
13
Standard rate of UK corporation tax 25% (2023: blended rate 21.5%)
Adjustment in respect of prior years
–
(2)
Total current tax expense
21
11
Deferred tax – current year (Note 17)
22
19
Deferred tax – prior year (Note 17)
(5)
(3)
Tax on profit before non-underlying items
38
27
Tax on non-underlying items – current tax
(1)
–
Tax on non-underlying items – deferred tax (Note 17)
(8)
(5)
Total tax on profit
29
22
Reconciliation of the taxation charge
£m
2024
2023
Tax on profit at standard rate of UK corporation tax 25% (2023: blended rate 21.5%)
26
24
Tax effect of items that are not deductible or not taxable in determining taxable profit
5
(3)
Derecognition of deferred tax balances
1
7
Differences in overseas tax rates
2
(1)
Adjustment in respect of prior years – current tax
–
(2)
Adjustment in respect of prior years – deferred tax
(5)
(3)
Total income tax charge
29
22
The effective tax rate, before non-underlying items, is 23 per cent (2023: 19 per cent).
The UK corporation tax rate is 25 per cent effective from 1 April 2023.
The legislation implementing the Organisation for Economic Co-Operation and Development’s (“OECD”) proposals for
a global minimum corporation tax rate (Pillar Two) was substantively enacted in the UK on 20 June 2023 and applies to
reporting periods beginning on or after 1 January 2024.
Under the legislation the Group is liable to pay a top-up tax for the difference between their Global Anti-Base Erosion
Rules (“GloBE”) effective tax rate per jurisdiction and the 15 per cent minimum rate.
The rules will be applicable to the Group for the year ended 31 August 2025. The Group has performed an assessment of
the Group’s potential exposure to Pillar Two top-up taxes based on the most recent filings, country-by-country reporting,
and the most recent financial information available for the constituent entities in the Group. Based on this assessment,
the Pillar Two effective tax rates in most of the jurisdictions in which the Group operates are above 15 per cent or will
meet the financial thresholds required to meet the Transitional Safe Harbour Rules. However, there are a limited number
of jurisdictions where the Transitional Safe Harbour relief does not apply, and the Pillar Two effective rate is close to 15 per
cent. The Group does not expect a material exposure to Pillar Two taxes in those jurisdictions.
The Group applies the temporary exception from the accounting requirements for deferred taxes in IAS 12. Accordingly,
the Group neither recognises nor discloses information about deferred taxes in relation to Pillar Two.
Notes to the financial statements continued
142
WH Smith PLC Annual Report and Accounts 2024
Financial statements
8. Dividends
Amounts paid and recognised as distributions to shareholders in the year are as follows:
£m
2024
2023
Final dividend for the year ended 31 August 2023 of 20.8p per ordinary share
27
–
Interim dividend for the year ended 31 August 2024 of 11.0p per ordinary share
14
–
Final dividend for the year ended 31 August 2022 of 9.1p per ordinary share
–
12
Interim dividend for the year ended 31 August 2023 of 8.1p per ordinary share
–
10
41
22
The Board has proposed a final dividend of 22.6p per share, amounting to a final dividend of c.£30m, which is not
included as a liability in these financial statements and, subject to shareholder approval, will be paid on 6 February 2025
to shareholders registered at the close of business on 17 January 2025.
9. Earnings per share
a) Earnings
£m
2024
2023
Profit for the year, attributable to equity holders of the parent
67
79
Non-underlying items, after tax (Note 4)
46
22
Profit for the year before non-underlying items, attributable to equity holders of the parent
113
101
b) Weighted average share capital
Millions
2024
2023
Weighted average ordinary shares in issue
131
130
Less weighted average ordinary shares held in ESOP Trust
(2)
–
Weighted average shares in issue for earnings per share
129
130
Add weighted average number of ordinary shares under option
2
2
Weighted average ordinary shares for diluted earnings per share
131
132
c) Basic and diluted earnings per share
Pence
2024
2023
Basic earnings per share
51.9
60.8
Adjustment for non-underlying items
35.7
16.9
Basic earnings per share before non-underlying items
87.6
77.7
Pence
2024
2023
Diluted earnings per share
51.1
59.8
Adjustment for non-underlying items
35.2
16.7
Diluted earnings per share before non-underlying items
86.3
76.5
Diluted earnings per share takes into account various share awards and share options including SAYE schemes, which are
expected to vest, and for which a sum below fair value will be paid.
As at 31 August 2024 the convertible bond has no dilutive effect as the inclusion of these potentially dilutive shares would
improve earnings per share (2023: no dilutive effect).
The calculation of earnings per share on a pre-IFRS 16 basis is provided in the Glossary on page 173.
WH Smith PLC Annual Report and Accounts 2024
143
Strategic report Corporate governance Financial statements Additional information
10. Intangible assets
Brands and
franchise Tenancy
£m
Goodwill
contracts
rights
Software
Total
Cost
At 1 September 2023
436
46
13
128
623
Additions
6
–
–
16
22
Foreign exchange
(16)
(2)
(1)
–
(19)
At 31 August 2024
426
44
12
144
626
Accumulated amortisation
At 1 September 2023
–
14
8
96
118
Amortisation charge
–
3
–
12
15
Impairment charge
–
–
–
5
5
Foreign exchange
–
(1)
–
(1)
(2)
At 31 August 2024
–
16
8
112
136
Net book value at 31 August 2024
426
28
4
32
490
Cost
At 1 September 2022
471
50
13
114
648
Additions
–
–
–
16
16
Foreign exchange
(35)
(4)
–
(2)
(41)
At 31 August 2023
436
46
13
128
623
Accumulated amortisation
At 1 September 2022
–
12
8
85
105
Amortisation charge
–
3
–
11
14
Foreign exchange
–
(1)
–
–
(1)
At 31 August 2023
–
14
8
96
118
Net book value at 31 August 2023
436
32
5
32
505
Goodwill of US$58m (£44m) (2023: US$64m / £50m) relating to the acquisition of the InMotion Entertainment Group of
companies in 2018 is expected to be deductible for tax purposes in the future. Additions to Goodwill in the year relate to
small acquisitions in Ireland and Australia (Note 27).
The carrying value of goodwill is allocated to the segmental businesses as follows:
£m
2024
2023
Travel UK
262
272
North America
117
122
Rest of the World
32
27
Total Travel
411
421
High Street
15
15
Group
426
436
Included within Tenancy rights are certain assets that are considered to have an indefinite life of £4m (2023: £4m),
representing certain rights under tenancy agreements, which include the right to renew leases, therefore no amortisation
has been charged. Management has determined that the useful economic life of these assets is indefinite because the
Group can continue to occupy and trade from certain premises for an indefinite period. These assets are reviewed annually
for indicators of impairment.
Notes to the financial statements continued
144
WH Smith PLC Annual Report and Accounts 2024
Financial statements
10. Intangible assets (continued)
Impairment of goodwill and acquired intangible assets
The Group tests goodwill for impairment annually or where there is an indication that goodwill might be impaired.
For impairment testing purposes, goodwill is allocated to groups of CGUs in a manner that is consistent with our operating
segments, as this reflects the lowest level at which goodwill is monitored. All goodwill has arisen on acquisitions of groups
of retail stores. These acquisitions are then integrated into the Group’s operating segments as appropriate. Acquired brands
are considered together with goodwill for impairment testing purposes, and are therefore considered annually
for impairment.
Goodwill and acquired brands have been tested for impairment by comparing the carrying amount of each group
of CGUs, including goodwill and acquired brands, with the recoverable amount determined from value-in-use
calculations. The value-in-use of each group of CGUs has been calculated using cash flows derived from the Group’s latest
Board-approved budget and three-year plan, initially extrapolated to five years. The forecasts reflect management’s best
estimates of market conditions, together with the Group’s expectations on the future achievable growth and committed
store openings. Cash flows beyond the initial forecast period are extrapolated using estimated long-term growth rates.
For certain groups of CGUs, additional adjustments to cash flows have been applied in extrapolating for an extended
period of up to 15 years before calculating a terminal value. This extended period is required to establish a normalised
cash flow base on which a terminal value calculation can be appropriately calculated. The main reasons for adjustments
to cash flows include forecast lease renewals under IFRS 16, and the unwinding of certain cash flow benefits arising from
acquisitions in North America.
The key assumptions on which the forecast three-year cash flows of the CGUs are based include revenue and the pre-tax
discount rate. Other assumptions in the model relate to gross margin, cost inflation and longer-term growth rates:
• The values assigned to each of the revenue, product mix and operating cost assumptions were determined based on
the extrapolation of historical trends within the Group and external information on expected future trends in the travel
and high street retail sectors.
• The pre-tax discount rates are derived from the Group’s weighted average cost of capital, which has been calculated
using the capital asset pricing model, the inputs of which include a risk-free rate, equity risk premium, Group size
premium and a risk adjustment (beta). Country-specific discount rates were not considered to be materially different
to the Group rate. The pre-tax discount rate used in the calculations was 10.7 per cent (2023: 13.2 per cent).
• The long-term growth rate assumptions are between zero per cent and two per cent (2023: zero per cent and two
per cent).
The immediately quantifiable impacts of climate change and costs expected to be incurred in connection with our net
zero commitments, are included within the Group’s budget and three-year plan which have been used to support the
impairment reviews, with no material impact on cash flows.
The value-in-use estimates indicated that the recoverable amount of goodwill exceeded the carrying value for each
group of CGUs. As a result, no impairment has been recognised in respect of the carrying value of goodwill in the year
(2023: £nil).
As disclosed in Note 1, Accounting policies, the forecast cash flows used within the impairment model are based
on assumptions which are sources of estimation uncertainty and it is possible that significant changes to these
assumptions could lead to an impairment of goodwill and acquired brands. Given the inherent uncertainties due to
challenges in the macroeconomic environment, management have considered a range of sensitivities on each of the
key assumptions, with other variables held constant. The sensitivities include applying increases in the discount rate
by two per cent and reductions in the long-term growth rates by two per cent. Under these combined scenarios, the
estimated recoverable amount of goodwill and acquired brands would require an impairment of £5m.
Furthermore, outputs of the quantitative climate change scenario analysis as described on pages 44 to 52 have also
been taken into consideration in the sensitivity analysis, and has shown that climate change is not considered to be a
key driver in determining the outcome.
The sensitivity analysis showed that no reasonably possible change in assumptions would lead to a material impairment.
Impairment of other intangible assets
Other intangible assets including Software have been assessed for indicators of impairment during the year. Impairment to
software assets of £5m (2023: £nil) has been recorded during the year as a result of the Board-approved programmes
relating to supply chain and IT transformation, as well as the reconfiguration of the Group’s online operations.
The approach to impairment testing is described in detail in Note 11, Property, plant and equipment.
WH Smith PLC Annual Report and Accounts 2024
145
Strategic report Corporate governance Financial statements Additional information
11. Property, plant and equipment
Land and buildings
Freehold Leasehold Fixtures Equipment
£m properties improvements and fittings
and vehicles
Total
Cost or valuation:
At 1 September 2023
18
385
254
140
797
Additions
–
57
46
12
115
Disposals
–
(4)
(3)
–
(7)
Foreign exchange
–
(5)
(2)
–
(7)
At 31 August 2024
18
433
295
152
898
Accumulated depreciation:
At 1 September 2023
10
252
166
99
527
Depreciation charge
–
29
10
10
49
Impairment charge
–
6
7
2
15
Disposals
–
(4)
(3)
–
(7)
Foreign exchange
–
(1)
(1)
–
(2)
At 31 August 2024
10
282
179
111
582
Net book value at 31 August 2024
8
151
116
41
316
Cost or valuation:
At 1 September 2022
18
329
232
127
706
Additions
–
63
24
19
106
Reclassifications
–
–
5
(5)
–
Foreign exchange
–
(7)
(7)
(1)
(15)
At 31 August 2023
18
385
254
140
797
Accumulated depreciation:
At 1 September 2022
10
230
155
92
487
Depreciation charge
–
20
15
7
42
Impairment charge
–
3
–
1
4
Reclassifications
–
1
(1)
–
–
Foreign exchange
–
(2)
(3)
(1)
(6)
At 31 August 2023
10
252
166
99
527
Net book value at 31 August 2023
8
133
88
41
270
Impairment of property, plant and equipment
For impairment testing purposes, the Group has determined that each store is a separate CGU or in some cases a group
of stores is considered to be a CGU where the stores do not generate largely independent cash inflows. CGUs are tested
for impairment at the balance sheet date if any indicators of impairment have been identified. The identified indicators
include loss-making stores, stores earmarked for closure and under-performance of individual stores versus forecast.
For those CGUs where an indicator of impairment has been identified, property, plant and equipment and right-of-use
assets have been tested for impairment by comparing the carrying amount of the CGU with its recoverable amount
determined from value-in-use calculations. It was determined that value-in-use was higher than fair value less costs
to sell.
The value-in-use of CGUs is calculated using discounted cash flows derived from the Group’s latest Board-approved
budget and three-year plan, and reflects historical performance and understanding of the current market, together with
the Group’s views on the future achievable growth for these specific stores. Cash flows beyond the forecast period are
extrapolated using growth rates and inflation rates appropriate to each store’s location. Cash flows have been included for
the remaining lease life for the specific store. These growth rates do not exceed the long-term growth rate for the Group’s
retail businesses in the relevant territory. Where stores have a short remaining lease life, an extension to the lease has been
assumed where management consider it likely that an extension will be granted. The immediately quantifiable impacts of
climate change and costs expected to be incurred in connection with our net zero commitments, are included within the
Group’s budget and three-year plan which have been used to support the impairment reviews, with no material impact on
cash flows. The useful economic lives of store assets are short in the context of climate change scenario models therefore
no medium to long-term effects have been considered.
Notes to the financial statements continued
146
WH Smith PLC Annual Report and Accounts 2024
Financial statements
11. Property, plant and equipment (continued)
Impairment of property, plant and equipment (continued)
The key assumptions on which the forecast three-year cash flows of the CGUs are based include revenue and the pre-tax
discount rate. Other assumptions in the model relate to gross margin, cost inflation and longer-term growth rates.
In developing these forecasts, management have used available information, including historical knowledge of the store
level cash flows.
The pre-tax discount rates are derived from the Group’s weighted average cost of capital, which has been calculated
using the capital asset pricing model, the inputs of which include the risk-free rate, equity risk premium, Group size
premium and a risk adjustment (beta). Country-specific discount rates were not considered to be materially different
to the Group rate. The pre-tax discount rate used in the calculations was 10.7 per cent (2023: 13.2 per cent).
Where the value-in-use was less than the carrying value of the CGU, an impairment of property, plant and equipment
and right-of-use assets was recorded. These stores were impaired to their recoverable amount of £14m, which is their
carrying value at year end. The Group has recognised an impairment charge of £15m (2023: £4m) to property, plant and
equipment, £5m impairment to software (2023: £nil) and £10m (2023: £15m) to right-of-use assets.
Included in the impairment values above are impairments of property, plant and equipment connected with
Board-approved programmes relating to supply chain and IT transformation, as well as the reconfiguration of the
Group’s online operations. Assets have been impaired where their use is planned to be discontinued as a result of
these programmes.
As disclosed in Note 1, Accounting policies, the forecast cash flows used within the impairment model are based on
assumptions which are sources of estimation uncertainty and changes to these assumptions could lead to further
impairments to assets. As a result, the Group has applied certain sensitivities to demonstrate the impact on the
impairment charge of changes in key assumptions. The sensitivities include applying increases in the discount rate
by two per cent and reductions in expected future cash flows by two per cent. Under these combined scenarios,
the impairment charge for property, plant and equipment and right-of-use assets would increase by less than £1m.
Impairments to non-current assets have been presented as non-underlying items (see Note 4).
The impairment assessment has also been performed on a pre-IFRS 16 basis. See Glossary on page 173.
12. Right-of-use assets
Land and
£m
buildings
Equipment
Total
At 1 September 2023
440
4
444
Additions
152
–
152
Modifications and remeasurements
48
–
48
Disposals
(8)
–
(8)
Depreciation charge
(110)
(2)
(112)
Impairment charge
(10)
–
(10)
Effect of movements in foreign exchange rates
(9)
–
(9)
Net book value at 31 August 2024
503
2
505
Land and
£m
buildings
Equipment
Total
At 1 September 2022
440
6
446
Additions
93
–
93
Modifications and remeasurements
41
1
42
Depreciation charge
(101)
(3)
(104)
Impairment charge
(15)
–
(15)
Effect of movements in foreign exchange rates
(18)
–
(18)
Net book value at 31 August 2023
440
4
444
Information on the Group’s leasing activities is included in Note 15, Lease liabilities.
Impairment of right-of-use assets
Right-of-use assets of £10m (2023: £15m) have been impaired in the year. This impairment charge has been presented
in non-underlying items (see Note 4). The approach to impairment testing is described in detail in Note 11, Property,
plant and equipment along with sensitivity analysis.
WH Smith PLC Annual Report and Accounts 2024
147
Strategic report Corporate governance Financial statements Additional information
13. Trade and other receivables
£m
2024
2023
Current receivables
Trade receivables
81
68
Other receivables
7
3
Prepayments
17
15
Accrued income
45
26
150
112
Non-current receivables
Other receivables
7
5
Prepayments
5
4
Total trade and other receivables
162
121
Included in accrued income is £33m (2023: £19m) of accrued supplier income relating to retrospective discounts and
other promotional and marketing income that has been earned but not yet invoiced. Supplier income that has been
invoiced but not yet settled against trade payables balances is included in trade payables where the Group has a right
to offset.
The ageing of the Group’s trade and other receivables is as follows:
£m
2024
2023
Trade and other receivables gross
100
80
Expected credit losses
(5)
(4)
Trade and other receivables net
95
76
Of which:
Amounts neither impaired nor past due on the reporting date
71
54
Amounts past due but not impaired:
Less than one month old
17
15
Between one and three months old
3
5
Between three and six months old
3
2
Between six months and one year old
1
–
Trade and other receivables net carrying amount
95
76
The Group has limited exposure to expected credit losses due to the business model. An allowance has been made
for lifetime expected credit losses from receivables at 31 August 2024 of £5m (2023: £4m). The ageing analysis of these
receivables is given in the table below. This expected credit loss allowance reflects the application of the Group’s
provisioning policy in respect of bad and doubtful debts and is based upon the difference between the receivable value
and the estimated net collectible amount. The Group establishes its provision for bad and doubtful debts by reference
to past default experience.
Ageing analysis of bad and doubtful debt provisions:
£m
2024
2023
Less than one month old
–
–
Between one and three months old
–
–
Between three and six months old
1
1
Between six months and one year old
4
3
5
4
No trade and other receivables that would have been past due or impaired were renegotiated during the year.
No interest is charged on the receivables balance. The other classes within trade and other receivables do not include
impaired assets. The Group does not hold collateral over these balances. The directors consider that the carrying amount
of trade and other receivables approximates their fair value.
Notes to the financial statements continued
148
WH Smith PLC Annual Report and Accounts 2024
Financial statements
14. Trade and other payables
£m
2024
2023
Trade payables
153
130
Other tax and social security
34
30
Other payables
85
95
Accruals
66
68
Deferred income
14
17
352
340
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs.
The average credit period taken for trade purchases is 59 days (2023: 58 days). The directors consider that the carrying
amount of trade and other payables approximates their fair value.
Trade payables is stated net of £7m (2023: £8m) amounts receivable from suppliers in relation to supplier income,
that has been invoiced, for which the Group has the right to set off against amounts payable at the balance sheet date.
15. Lease liabilities
Land and
£m
buildings
Equipment
Total
At 1 September 2023
564
2
566
Additions
148
–
148
Modifications and remeasurements
47
–
47
Disposals
(12)
–
(12)
Interest
25
–
25
Payments
(135)
(1)
(136)
Effect of movements in foreign exchange rates
(12)
–
(12)
At 31 August 2024
625
1
626
Land and
£m
buildings
Equipment
Total
At 1 September 2022
574
3
577
Additions
91
–
91
Modifications and remeasurements
39
1
40
Disposals
(2)
–
(2)
Interest
19
–
19
Payments
(135)
(2)
(137)
Effect of movements in foreign exchange rates
(22)
–
(22)
At 31 August 2023
564
2
566
£m
2024
2023
Analysis of total lease liabilities:
Non-current
501
450
Current
125
116
Total
626
566
The Group leases land and buildings for its retail stores, distribution centres, storage locations and office property.
These leases have an average remaining lease term of four years. Some leases include an option to break before the end
of the contract term or an option to renew the lease for an additional term after the end of the term. Management assess
the lease term at inception based on the facts and circumstances applicable to each property.
Other leases are mainly forklift trucks for the retail stores and distribution centres, office equipment and vehicles.
These leases have an average remaining lease term of three years.
WH Smith PLC Annual Report and Accounts 2024
149
Strategic report Corporate governance Financial statements Additional information
15. Lease liabilities (continued)
The Group reviews the retail lease portfolio on an ongoing basis, taking into account retail performance and future
trading expectations. The Group may exercise extension options, negotiate lease extensions or modifications. In other
instances, the Group may exercise break options, negotiate lease reductions or decide not to negotiate a lease extension
at the end of the lease term. Certain property leases contain rent review terms that require rent to be adjusted on a
periodic basis, which may be subject to market rent or increases in inflation measurements.
Many of the Group’s property leases, particularly in Travel locations, also incur payments based on a percentage of
revenue (variable lease payments) achieved at the location. In line with IFRS 16, variable lease payments which are
not based on an index or rate are not included in the lease liability. See Note 3 for the expense charged to the Income
statement relating to variable lease payments not included in the measurement of the lease liability.
The Group’s accounting policy for leases is set out in Note 1. Details of Income statement charges for leases are set out
in Note 3. The right-of-use asset categories on which depreciation is incurred are presented in Note 12. Interest expense
incurred on lease liabilities is presented in Note 6. The maturity of undiscounted future lease liabilities are set out in
Note 21.
The total cash outflow for leases in the financial year was £187m (2023: £181m). This includes cash outflow for short-term
leases of £19m (2023: £19m) and variable lease payments (not included in the measurement of lease liability) of £32m
(2023: £25m).
16. Provisions
Property Other
£m provisions
provisions
Total
At 1 September 2023
17
–
17
Charge in the year
4
2
6
Released in the year
(1)
–
(1)
Utilised in year
(2)
–
(2)
Reclassifications to creditors
(3)
–
(3)
At 31 August 2024
15
2
17
Property Other
£m provisions
provisions
Total
At 1 September 2022
14
–
14
Charge in the year
3
–
3
Utilised in year
(1)
–
(1)
Reclassifications from creditors
1
–
1
At 31 August 2023
17
–
17
Total provisions are split between current and non-current liabilities as follows:
£m
2024
2023
Included in current liabilities
4
1
Included in non-current liabilities
13
16
17
17
Property provisions principally relate to reinstatement liabilities for stores where the long-term viability has been
impacted primarily by Covid-19 and onerous lease provisions. These expected costs of store closures are reviewed
frequently and are based on information available as at the reporting date as well as management’s historical
experience of similar transactions. Utilisations of the property provisions are expected to be incurred in line with the
profile of the leases to which they relate, which range from one year up to ten years.
A charge of £6m (2023: £3m) has been recognised in the income statement to provide for the unavoidable costs of
continuing to service a number of non-cancellable supplier and lease contracts where the space is vacant, a contract is
loss-making or currently not planned to be used for ongoing operations. This provision will be utilised over the next two
to four financial years.
Notes to the financial statements continued
150
WH Smith PLC Annual Report and Accounts 2024
Financial statements
17. Deferred tax
The following are the deferred tax liabilities and assets recognised by the Group and movements thereon during the
current and prior years.
Opening (Credited)/ (Credited)/ Closing
balance charged to charged to Foreign balance
£m
1 September
Rate change
income equity exchange 31 August
Accelerated tax depreciation
(11)
–
1
–
–
(10)
IFRS 16 transitional adjustment
5
–
(2)
–
–
3
Share-based payments
6
–
1
(1)
–
6
Intangible assets
(14)
–
1
–
–
(13)
Losses carried forward
30
–
(19)
–
–
11
Unutilised interest expense
8
–
6
–
–
14
Other temporary differences
19
–
3
–
–
22
Year ended 31 August 2024
43
–
(9)
(1)
–
33
Accelerated tax depreciation
3
(1)
(14)
–
1
(11)
IFRS 16 transitional adjustment
5
–
–
–
–
5
Share-based payments
4
–
2
–
–
6
Intangible assets
(14)
–
–
–
–
(14)
Losses carried forward
45
1
(15)
–
(1)
30
Unutilised interest expense
7
–
2
–
(1)
8
Other temporary differences
5
–
14
–
–
19
Year ended 31 August 2023
55
–
(11)
–
(1)
43
Deferred tax assets have not been recognised in respect of the following tax losses:
£m
2024
2023
Capital losses
81
83
Trading losses
48
28
129
111
Substantially all of the deferred income tax assets are expected to be recovered after more than one year.
The UK corporation tax rate is 25 per cent.
At 31 August 2024, deferred tax assets have been recognised in respect of tax losses and US unutilised interest expense.
The deferred tax assets of £51m (2023: £119m) relate to carried forward tax losses which have been recognised to the
extent that they will be recoverable using the estimated future taxable income based on the approved budgets for
the Group. The Group has not recognised deferred tax assets on losses (including capital losses) amounting to £129m
(2023: £111m) and US unutilised interest expense amounting to £16m (2023: £33m) due to uncertainty over the timing
and extent of their utilisation. These losses can be carried forward indefinitely and have no expiry date. Other temporary
differences include amounts in respect of right-of-use assets (deferred tax asset of £31m, with an offsetting deferred tax
liability of £24m).
All deferred tax assets and liabilities are offset where there is considered to be a legally enforceable right to do so.
The following is an analysis of the deferred tax balances (after offset) for financial reporting purposes:
£m
2024
2023
Deferred tax liabilities (non-current liabilities)
–
–
Deferred tax assets
33
43
33
43
WH Smith PLC Annual Report and Accounts 2024
151
Strategic report Corporate governance Financial statements Additional information
18. Analysis of net debt
Movements in net debt can be analysed as follows:
Sub-total
Liabilities
from
Convertible Revolving financing Cash and cash
£m
Term loans
bonds
credit facility
Leases
activities
equivalents
Net debt
At 1 September 2023
–
(301)
(84)
(566)
(951)
56
(895)
Bond accretion and fee amortisation
–
(9)
–
–
(9)
–
(9)
Lease additions, modifications and interest
–
–
–
(208)
(208)
–
(208)
Cash movements
–
–
(33)
136
103
–
103
Currency translation
–
–
–
12
12
–
12
At 31 August 2024
–
(310)
(117)
(626)
(1,053)
56
(997)
Sub-total
Liabilities
from
Convertible Revolving financing Cash and cash
£m
Term loans
bonds
credit facility
Leases
activities
equivalents
Net debt
At 1 September 2022
(132)
(292)
–
(577)
(1,001)
132
(869)
Bond accretion and fee amortisation
(1)
(9)
–
–
(10)
–
(10)
Lease additions, modifications and interest
–
–
–
(148)
(148)
–
(148)
Cash movements
133
–
(84)
137
186
(74)
112
Currency translation
–
–
–
22
22
(2)
20
At 31 August 2023
–
(301)
(84)
(566)
(951)
56
(895)
An explanation of Alternative Performance Measures, including Net debt on a pre-IFRS 16 basis, is provided in the
Glossary on page 173.
Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity
of three months or less. The carrying amount of these assets approximates to their fair value.
Lease liabilities
Non-cash movements in lease liabilities mainly relate to new leases, modifications and remeasurements in the year.
Cash movements on leases include principal repayments of £112m (2023: £118m) and interest paid of £24m (2023: £19m).
Revolving credit facilities
The Group has a £400m committed revolving credit facility (“RCF”). The first extension option has been exercised during
the year, taking the maturity to 13 June 2029. The RCF has one remaining uncommitted extension option of one year,
which would, subject to lender approval, extend the maturity date to 13 June 2030 if exercised.
The RCF is provided by a syndicate of banks: Barclays Bank PLC, BNP Paribas, Citibank N.A. London Branch, Fifth Third
Bank National Association, HSBC UK Bank PLC, JP Morgan Securities PLC, PNC Capital Markets LLC, Banco Santander
SA London Branch and Skandinaviska Enskilda Banken AB (PUBL). Utilisation is interest bearing at a margin over SONIA.
As at 31 August 2024, the Group has drawn down £117m on the RCF (2023: £84m).
Transaction costs of £4m relating to the RCF have been capitalised and are amortised to Income statement on a
straight-line basis.
Term loans
Term loans of £133m were repaid in the prior year.
Convertible bonds
The Group issued £327m guaranteed senior unsecured convertible bonds on 7 May 2021 with a 1.625 per cent per
annum coupon payable semi-annually in arrears in equal instalments. The bonds are convertible into new and/or
existing ordinary shares of WH Smith PLC. The initial conversion price was set at £24.99 representing a premium of 40
per cent above the reference share price on 28 April 2021 (£17.85). The conversion price at 31 August 2024 was £24.3104
(2023: £24.7032). If not previously converted, redeemed or purchased and cancelled, the bonds will be redeemed at par
on 7 May 2026.
Notes to the financial statements continued
152
WH Smith PLC Annual Report and Accounts 2024
Financial statements
18. Analysis of net debt (continued)
Convertible bonds (continued)
The convertible bond is a compound financial instrument, consisting of a financial liability component and an equity
component, representing the value of the conversion rights. The initial fair value of the liability portion of the convertible
bond was determined using a market interest rate for an equivalent non-convertible bond at the issue date. The liability
is subsequently recognised on an amortised cost basis using the effective interest rate method until extinguished
on conversion or maturity of the bonds. The remainder of the proceeds was allocated to the conversion option and
recognised in equity (Other reserves), and not subsequently remeasured. As a result, £41m of the initial proceeds of
£327m was recognised in equity representing the option component.
Transaction costs of £6m were allocated between the two components and the element relating to the debt component
of £5m is amortised through the effective interest rate method. The issue costs apportioned to the equity component of
£1m have been deducted from equity.
Further information regarding the Group’s borrowings and revolving credit facilities is provided in Note 21.
19. Contingent liabilities and capital commitments
£m
2024
2023
Bank guarantees and guarantees in respect of lease agreements
71
61
Bank guarantees are principally in favour of landlords and could be drawn down on by landlords in the event that the
Group does not settle its contractual obligations under lease or other agreements.
Contracts placed for future capital expenditure approved by the directors but not provided for in these financial
statements amount to £36m (2023: £27m).
£m
2024
2023
Commitments in respect of property, plant and equipment
34
25
Commitments in respect of other intangible assets
2
2
36
27
20. Cash generated from operating activities
£m
2024
2023
Group operating profit
158
156
Depreciation of property, plant and equipment
49
42
Impairment of property, plant and equipment
15
4
Amortisation of intangible assets
15
14
Impairment of intangible assets
5
–
Depreciation of right-of-use assets
112
104
Impairment of right-of-use assets
10
15
Non-cash change in lease liabilities
(3)
–
Non-cash movement in pensions
1
–
Share-based payments
11
12
Gain on remeasurement of leases
(4)
(5)
Other non-cash items (incl. foreign exchange)
9
7
Increase in inventories
(15)
(12)
Increase in receivables
(41)
(22)
Increase/(decrease) in payables
10
(15)
Movement on provisions (through utilisation or income statement)
3
2
Cash generated from operating activities
335
302
WH Smith PLC Annual Report and Accounts 2024
153
Strategic report Corporate governance Financial statements Additional information
21. Financial instruments
Categories of financial instruments
Carrying value
£m
2024
2023
Financial assets
Derivative instruments not in designated hedge accounting relationships
1
–
1
Receivables at amortised cost
1
140
102
Cash and cash equivalents
56
56
Financial liabilities
Derivative instruments in designated hedge accounting relationships
1
–
(1)
Amortised cost
2
(1,357)
(1,244)
1 Included within receivables held at amortised cost are trade and other receivables (excluding prepayments) and cash and cash equivalents
2 Included within amortised cost are trade payables, other payables, accruals, borrowings, lease obligations and other non-current liabilities
Comparison of carrying values and fair values
The carrying value of the convertible bond on the Group’s balance sheet is £310m (2023: £301m). The fair value of the
convertible bond has been estimated at £303m (2023: £287m) using a discounted cash flow approach based on market
interest rates. This represents Level 2 fair value measurements as defined by IFRS 13.
There were no material differences between the carrying value of non-derivative financial assets and other financial
liabilities and their fair values as at the balance sheet date.
Risk management
The Group’s treasury function seeks to reduce exposures to interest rate, foreign exchange and other financial risks,
and to ensure liquidity is available to meet the foreseeable needs of the Group and to invest cash assets safely and
profitably. The Group does not engage in speculative trading in financial instruments and transacts only in relation to
underlying business requirements. The Group’s treasury policies and procedures are periodically reviewed and approved
by the Group’s Audit Committee and are subject to regular Group Internal Audit review.
Capital risk
The Group’s objectives with respect to managing capital (defined as net debt plus equity) are to safeguard the Group’s
ability to continue as a going concern, in order to optimise returns to shareholders and benefits for other stakeholders,
through an appropriate balance of debt and equity funding. Refer to Note 18 for the value of the Group’s net debt and
refer to the Group statement of changes in equity for the value of the Group’s equity.
In managing the Group’s capital levels, the Board regularly monitors the level of debt in the business, the working capital
requirements, forecast financing and investing cash flows. Based on this analysis, the Board determines the appropriate
return to investors, while ensuring sufficient capital is retained in the business to meet its strategic objectives. The Board
has a progressive dividend policy and expects that, over time, dividends would be broadly covered two and a half times
by earnings calculated on a normalised tax basis.
The Group has in place a £400m committed multi-currency revolving credit facility. The covenants, tested half-yearly,
are based on fixed charges cover and leverage (defined as total borrowings excluding lease liabilities that would have
been treated as an operating lease prior to the adoption of IFRS 16, less cash and cash equivalents/consolidated pre-IFRS
16 EBITDA).
The Group has issued £327m of guaranteed senior unsecured convertible bonds due in May 2026. Settlement and
delivery of the convertible bonds took place on 7 May 2021. The total bond offering of £327m covers a five-year term
beginning on 7 May 2021 with a 1.625 per cent per annum coupon payable semi-annually in arrears in equal instalments.
The bonds are convertible into new and/or existing ordinary shares of the WH Smith PLC. The initial conversion price
was set at £24.99 representing a premium of 40 per cent above the reference share price on 28 April 2021 (£17.85).
The conversion price at 31 August 2024 is £24.3104 (2023: £24.7032). If not previously converted, redeemed or purchased
and cancelled, the Bonds will be redeemed at par on 7 May 2026.
Liquidity risk
The Group manages its exposure to liquidity risk by reviewing the cash resources required to meet its business objectives
through both short- and long-term cash flow forecasts. The Group has a committed multi-currency revolving credit
facility with a number of financial institutions, which is available to be drawn for general corporate purposes including
working capital. The facility is due to mature on 13 June 2029.
The Group has a policy of pooling cash flows in order to optimise the return on surplus cash and also to utilise cash
within the Group to reduce the costs of external short-term funding.
Notes to the financial statements continued
154
WH Smith PLC Annual Report and Accounts 2024
Financial statements
21. Financial instruments (continued)
The table below shows the maturity analysis of the undiscounted remaining contractual cash flows of the Group’s
financial liabilities:
Due within Due between Due between Due over
2024 (£m) 1 year 1 and 2 years 2 and 5 years
5 years
Total
Non-derivative financial liabilities
Bank loans and overdrafts
122
331
–
–
453
Trade and other payables
304
–
–
–
304
Lease liabilities
146
123
273
186
728
Total cash flows
572
454
273
186
1,485
Due within Due between Due between Due over
2023 (£m) 1 year 1 and 2 years 2 and 5 years
5 years
Total
Non-derivative financial liabilities
Bank loans and overdrafts
89
5
331
–
425
Trade and other payables
293
–
–
–
293
Lease liabilities
136
110
253
164
663
Total cash flows
518
115
584
164
1,381
Credit risk
Credit risk is the risk that a counterparty may default on their obligation to the Group in relation to lending, hedging,
settlement and other financial activities. The Group’s principal financial assets are trade and other receivables, and bank
balances and cash, which are considered to have low credit risk on initial recognition.
The Group has credit risk attributable to its trade and other receivables, including a number of sale or return contracts
with suppliers. The amounts included in the balance sheet are net of allowances for expected credit losses. The Group
has adopted the simplified approach to calculating expected credit losses allowed by IFRS 9. Historical credit loss rates
are applied consistently to groups of financial assets with similar risk characteristics. These are then adjusted for known
changes in, or any forward-looking impacts on, creditworthiness.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that credit risk might
have increased significantly include the failure of the debtor to engage in a payment plan and failure to make contractual
payments within 180 days past due, which is in line with historical experience of increased credit risk. Indicators that an
asset is credit-impaired would include observable data in relation to the financial health of the debtor or if the debtor
breaches contract.
The Group has low retail credit risk due to the transactions being principally high volume, low-value and of short
maturity. The Group has no significant concentration of credit risk, with the exposure spread over a large number of
counterparties and customers.
The credit risk on liquid funds and derivative financial instruments is considered to be low, as the Board-approved
Group treasury policy limits the value that can be placed with each approved counterparty to minimise the risk of loss.
These limits are based on a short-term credit rating of P–1.
The carrying amount of financial assets recorded in the financial statements represents the Group’s maximum exposure
to credit risk. The Group does not hold collateral over any of these financial assets.
Interest rate risk
The Group is exposed to cash flow interest rate risk on floating rate deposits and overdrafts.
At 31 August 2024, the Group had drawn down £117m (2023: £84m) from its £400m committed revolving credit facility.
When the Group draws down on this facility, it does not view any draw down as long-term in nature and therefore does
not enter into interest rate derivatives to mitigate this risk.
Foreign currency risk
Foreign exchange rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of the changes in foreign exchange rates. The Group’s foreign currency exposures are principally to the US dollar, Euro and
Australian dollar. The Group’s treasury function uses financial instruments to mitigate foreign exchange risk, in line
with treasury policies approved by the Board. Financial instruments include foreign exchange contracts, deposits and
bank loans.
WH Smith PLC Annual Report and Accounts 2024
155
Strategic report Corporate governance Financial statements Additional information
21. Financial instruments (continued)
The Group uses forward foreign exchange contracts to hedge significant future transactions and cash flows denominated
in currencies other than pounds sterling. The hedging instruments have been used to hedge purchases in US dollars
and to minimise foreign exchange risk in movements of the USD/GBP exchange rates. These are designated as cash flow
hedges. At 31 August 2024 the Group had no material unhedged currency exposures.
The Group’s US dollar, Euro and Australian dollar exposure is principally operational and arises mainly through the
operation of retail stores in North America, France, Ireland, Spain, Germany, Netherlands, Italy and Australia. The Group
does not use derivatives to hedge balance sheet and profit and loss translation exposure.
The fair value of cash flow hedges recognised within derivative assets/liabilities is shown below:
£m
2024
2023
Fair value of derivative (liabilities)/assets
–
(1)
At 31 August 2024, the total notional amount of outstanding forward foreign exchange contracts to which the Group has
committed is US$30m (2023: US$30m). These instruments will be used to hedge cash flows occurring up to one year
from the balance sheet date.
Gains of £nil (2023: £nil) have been transferred to the income statement and gains of £nil (2023: £nil) have been
transferred to inventories in respect of contracts that matured during the year ended 31 August 2024. In the year to
31 August 2024, the fair value loss on the Group’s currency derivatives that are designated and effective as cash flow
hedges amounted to £nil (2023: loss of £2m).
All the derivatives held by the Group at fair value are considered to have fair values determined by Level 2 inputs as
defined by the fair value hierarchy. There are no non-recurring fair value measurements nor have there been any
transfers of assets or liabilities between levels of the fair value hierarchy.
Sensitivity analysis as at 31 August 2024
Financial instruments affected by market risks include borrowings, deposits and derivative financial instruments.
The following analysis, required by IFRS 7 “Financial Instruments”: Disclosures, is intended to illustrate the sensitivity to
changes in market variables, being UK interest rates, and USD/GBP, EUR/GBP and AUD/GBP exchange rates.
The following assumptions were made in calculating the sensitivity analysis:
• Exchange rate fluctuations on currency derivatives that form part of an effective cash flow hedge relationship affect
the hedging reserve in equity and the fair value of the hedging derivatives.
• Year end exchange rates applied in the analysis are USD/GBP 1.3167/1 (2023: 1.2689/1), EUR/GBP 1.1887/1 (2023: 1.1666/1)
and AUD/GBP 1.9352/1 (2023: 1.9583/1).
• Group debt and hedging activities reflect the positions at 31 August 2024 and 31 August 2023 respectively.
As a consequence, the analysis relates to the position at those dates and is not necessarily representative of the years
then ended.
The above assumptions are made when illustrating the effect on the Group’s income statement and equity given
reasonable movements in foreign exchange and interest rates before the effect of tax. The Group considers a reasonable
interest rate movement in GBP SONIA/base rate to be one per cent. Similarly, sensitivity to movements in USD/GBP,
EUR/GBP and AUD/GBP exchange rates of ten per cent are shown, reflecting changes of reasonable proportion in the
context of movement in those currency pairs over time.
Using these assumptions, the following table shows the illustrative effect on the Group income statement and equity.
2024
2023
Income Equity Income Equity
£m gain/(loss) gain/(loss) (loss)/gain (loss)/gain
GBP SONIA/base rate interest rates 1% increase
(1)
–
(1)
–
USD/GBP exchange rates 10% increase
(1)
(35)
(3)
(36)
EUR/GBP exchange rates 10% increase
(1)
–
1
(4)
AUD/GBP exchange rates 10% increase
–
(1)
–
(1)
GBP SONIA/base rate interest rates 1% decrease
1
–
1
–
USD/GBP exchange rates 10% decrease
2
47
3
47
EUR/GBP exchange rates 10% decrease
1
(3)
(2)
(2)
AUD/GBP exchange rates 10% decrease
–
1
1
1
Notes to the financial statements continued
156
WH Smith PLC Annual Report and Accounts 2024
Financial statements
22. Called up share capital
Allotted and fully paid
2024
2023
Number Nominal Number Nominal
of shares value of shares value
(millions) £m (millions) £m
Equity:
Ordinary shares of 22
6
⁄
67
p
131
29
131
29
Total
131
29
131
29
During the year there were no ordinary shares allotted under the terms of the Company’s Sharesave Scheme (2023: 2,019
ordinary shares). There was no effect from the prior year allotment of ordinary shares on share premium.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at the meetings of the Company.
The ESOP reserve of £27m (2023: £15m) represents the cost of shares in WH Smith PLC purchased in the market and
held by the WH Smith Employee Benefit Trust to satisfy awards and options under the Group’s executive share schemes.
The total shareholding is 1,892,970 (2023: 1,031,943).
23. Share-based payments
Summary of movements in awards and options
Sharesave Cash-settled
Number of shares
Schemes
LTIPs
PSP
awards
Total
Outstanding at 1 September 2023
433,149
3,331,230
487,099
111,934
4,363,412
Options and awards granted
–
1,649,091
367,058
–
2,016,149
Options and awards exercised
–
–
(45,941)
–
(45,941)
Options and awards lapsed/cancelled
(112,833)
(622,734)
(100,631)
(69,701)
(905,899)
Outstanding at 31 August 2024
320,316
4,357,587
707,585
42,233
5,427,721
Exercisable at 31 August 2024
141,665
10,764
40,512
–
192,941
Outstanding at 1 September 2022
318,615
2,512,407
461,277
111,934
3,404,233
Options and awards granted
246,718
1,403,432
278,982
–
1,929,132
Options and awards exercised
(2,019)
(69,916)
(34,111)
–
(106,046)
Options and awards lapsed/cancelled
(130,165)
(514,693)
(219,049)
–
(863,907)
Outstanding at 31 August 2023
433,149
3,331,230
487,099
111,934
4,363,412
Exercisable at 31 August 2023
245
10,764
41,726
–
52,735
Pence
2024
2023
Weighted average exercise price of awards:
– Outstanding at the beginning of the year
134.87
136.94
– Granted in the year
–
16.46
– Exercised in the year
–
30.65
– Lapsed in the year
169.29
233.18
– Outstanding at the end of the year
80.17
134.87
– Exercisable at the end of the year
1,027.94
7.48
WH Smith PLC Annual Report and Accounts 2024
157
Strategic report Corporate governance Financial statements Additional information
23. Share-based payments (continued)
Detail of movements in options and awards
LTIPs
Under the terms of the LTIP, executive directors and key senior executives may be granted conditional awards to acquire
ordinary shares in the Company (in the form of nil cost options) which will only vest and become exercisable to the
extent that the related performance targets are met.
Outstanding awards granted under the LTIPs are as follows:
Number of shares
Exercise
Date of grant
2024
2023
price (pence)
Exercise period
20 October 2016
8,404
8,404
Nil
Oct 2019 – 20.10.26
26 October 2017
2,360
2,360
Nil
Oct 2020 – 26.10.27
19 November 2020
653,125
1,004,807
Nil
Nov 2025 – 19.11.30
19 November 2021
946,424
1,004,940
Nil
Nov 2026 – 19.11.31
21 November 2022
1,132,460
1,310,719
Nil
Nov 2027 – 21.11.32
27 April 2023
50,996
–
Nil
Nov 2027 – 21.11.32
14 September 2023
179,640
–
Nil
Nov 2028 – 21.11.32
16 November 2023
1,347,425
–
Nil
Nov 2028 – 16.11.33
1 February 2024
36,753
–
Nil
Nov 2028 – 16.11.33
4,357,587
3,331,230
Awards will first become exercisable on the vesting date, which is the third anniversary of the date of grant.
Awards made on or after October 2016 are subject to holding periods preventing the delivery and sale of shares until the
fifth anniversary of the date of grant. For awards made in October 2016 and October 2017, the holding period applies to
50 per cent of any shares which vest. For awards made in November 2018, and all subsequent awards, the holding period
applies to 100 per cent of any shares that vest. The awards will accrue dividends paid over the performance and any
holding period. LTIP awards are equity-settled.
Sharesave Scheme
Under the terms of the Sharesave Scheme, the Board grants options to purchase ordinary shares in the Company to
employees with at least three months service who enter into an HM Revenue & Customs approved Save-As-You-Earn
(“SAYE”) savings contract for a term of three years. Options are granted at up to a 20 per cent discount to the market
price of the shares on the date of offer and are normally exercisable for a period of six months after completion of the
SAYE contract. SAYE options are equity-settled.
Outstanding options granted under the Sharesave Scheme at 31 August 2024 and 31 August 2023 are as follows:
Number of shares
Exercise
Date of grant
2024
2023
price (pence)
Exercise period
5 June 2019 (3 year)
–
245
1,609.60
01.08.22 – 31.01.23
9 June 2021 (3 year)
141,665
191,679
1,400.00
01.08.24 – 31.01.25
14 June 2023 (3 year)
178,651
241,225
1,325.60
01.08.26 – 31.01.27
320,316
433,149
Performance Share Plan (“PSP”)
Under the terms of the Performance Share Plan, the Board may grant conditional awards to executives. The exercise
of awards is conditional on the achievement of a performance target, which is determined by the Board at the time of
grant. The executive directors do not participate in this plan. PSP awards are equity-settled.
Notes to the financial statements continued
158
WH Smith PLC Annual Report and Accounts 2024
Financial statements
23. Share-based payments (continued)
Outstanding awards granted under the PSP are as follows:
Number of shares
Exercise
Date of grant
2024
2023
price (pence)
Exercise period
23 October 2014
870
870
Nil
Oct 2017 – 23.10.24
20 October 2016
3,039
3,287
Nil
Oct 2019 – 20.10.26
19 November 2020
36,603
83,774
Nil
Nov 2021 – 19.11.30
19 November 2021
136,860
145,123
Nil
Nov 2024 – 19.11.31
21 November 2022
217,793
254,045
Nil
Nov 2025 – 21.11.32
16 November 2023
312,420
–
Nil
Nov 2026 – 16.11.33
707,585
487,099
Deferred Bonus Plan (“DBP”)
The Deferred Bonus Plan is applicable to executive directors only. Under the terms of the DBP, any bonus payable over
target is deferred into shares for a period of up to three years. One third of the deferred shares are released on each
anniversary of the bonus.
At 31 August 2024, 117,516 (2023: 73,049) shares remain deferred in accordance with this plan.
Cash-settled schemes
Under the terms of the LTIP and PSP, the Board may grant cash-settled awards to executives. The exercise of options
is conditional on the achievement of a performance target, which is determined by the Board at the time of grant.
These awards will be settled in cash based on the share price at the date of exercise. As at 31 August 2024 there were
42,233 outstanding nil-cost cash-settled awards (2023: 111,934), which will be settled at various dates up to November 2031.
The carrying amount of liabilities arising from share-based payment transactions is less than £1m (2023: less than £1m).
Fair value information
2024
2023
Weighted average share price at date of exercise of share options exercised during year – pence
1,299.63
1,429.62
Weighted average remaining contractual life at end of year – years
8
8
Share options and awards granted
The aggregate of the estimated fair value of the options and awards granted in the year is:
£m 2024 2023
20 20
The fair values of the LTIP and PSP awards granted were measured using a Monte Carlo simulation model. The input
range into the Monte Carlo models was as follows:
2024
2023
Share price – pence
1,287.00
1,364.50
Exercise price – pence
Nil
Nil
Expected volatility – per cent
35–36
47
Expected life – years
3.0
3.0
Risk-free rate – per cent
4.15–4.19
3.17
Dividend yield – per cent
0%–2.25%
0%–2%
Weighted average fair value of options – pence
972.74
1,042.45
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the expected life
of the option.
WH Smith PLC Annual Report and Accounts 2024
159
Strategic report Corporate governance Financial statements Additional information
23. Share-based payments (continued)
The fair values of the Sharesave options granted in the year ended 31 August 2023 were measured using a Black–Scholes
model. None were granted in the year ended 31 August 2024. The input range into the Black–Scholes models was as
follows in the year ended 31 August 2023:
2023
Share price – pence
1,638.00
Exercise price – pence
1,325.60
Expected volatility – per cent
76
Expected life – years
3.38
Risk-free rate – per cent
4.14
Dividend yield – per cent
1.05
Weighted average fair value of options – pence
946
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the expected life
of the option.
24. Related party transactions
Transactions between businesses within this Group which are related parties have been eliminated on consolidation and
are not disclosed in this Note.
Remuneration of key management personnel
The remuneration of the executive and non-executive directors, who are the key management personnel of the Group,
is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
Further information about the remuneration of individual directors is provided in the Directors’ remuneration report on
pages 85 to 109.
£’000
2024
2023
Short-term employee benefits
3,315
3,509
Post-employment benefits
33
83
Share-based payments
1,907
2,076
5,255
5,668
There are no other transactions with directors.
25. Other reserves
Other Revaluation ESOP Hedging Convertible
£m reserves reserve reserve reserve
bond reserve
Total
Balance as at 1 September 2023
(282)
2
(15)
–
40
(255)
Cash flow hedges
–
–
–
–
–
–
Employee share schemes
(1)
–
(12)
–
–
(13)
Balance at 31 August 2024
(283)
2
(27)
–
40
(268)
Revaluation ESOP Hedging Convertible
£m
Other reserves
reserve reserve reserve
bond reserve
Total
Balance as at 1 September 2022
(280)
2
(9)
3
40
(244)
Cash flow hedges
–
–
–
(3)
–
(3)
Employee share schemes
(2)
–
(6)
–
–
(8)
Balance at 31 August 2023
(282)
2
(15)
–
40
(255)
The Other reserves include reserves created in relation to historical capital reorganisation and proforma restatement of
£(238)m (2023: £(238)m), demerger from Smiths News PLC in 2006 of £69m (2023: £69m), and cumulative amounts
relating to employee share schemes of £114m (2023: £(113)m).
Notes to the financial statements continued
160
WH Smith PLC Annual Report and Accounts 2024
Financial statements
25. Other reserves (continued)
The convertible bond reserve is a reserve created to recognise the equity component of the convertible bond issued in
April 2021 (see Note 18) and represents the value of the conversion rights at initial recognition of £41m, net of transaction
costs of £1m.
Capital redemption reserve
The Capital redemption reserve of £13m (2023: £13m) represents the par value of shares repurchased and cancelled
under the Group’s share buyback programme and is reclassified from Share capital to the Capital redemption reserve.
26. Retirement benefit surplus
WH Smith PLC has operated a number of defined benefit and defined contribution pension plans. The main pension
arrangements for employees are operated through two defined benefit schemes, the WHSmith Pension Trust and
the United News Shops Retirement Benefits Scheme, and a defined contribution scheme, WH Smith Retirement
Savings Plan.
a) Defined benefit pension schemes
i) The WHSmith Pension Trust
The WHSmith Pension Trust Final Salary Section is a funded final salary defined benefit scheme; it was closed to defined
benefit service accrual on 2 April 2007 and has been closed to new members since 1996.
Following the purchase of a bulk annuity during the year ended 31 August 2022 (the buy in), the Trustee commenced the
process to move to buy out and wind up of the scheme. During the year ended 31 August 2024 the Trustee completed
the activities necessary to move to buy out, with administration transferred to Standard Life, and commenced formal
winding up of the Scheme.
In June 2024, following the member consultation process and the conclusion of the statutory notification process,
the Trustee was advised that it could legally distribute the remaining pension cash surplus to the sponsoring employer,
and therefore confirmed its intention to return surplus assets, after associated costs, to the sponsor. As a result,
the Group determined that it has an unconditional right to the surplus asset, and the IAS 19 post-tax surplus of £87m
has been recognised through other comprehensive income in the year and the IFRIC 14 ceiling eliminated.
The amounts recognised in the Group balance sheet at 31 August 2024 are as follows:
£m
2024
Present value of the obligations
–
Fair value of plan assets
87
Net surplus recognised in the balance sheet
87
At the prior year balance sheet date, 31 August 2023, the Group did not have an unconditional right to derive economic
benefit from any surplus in the scheme, as the Trustees retained the right to enhance benefits under the Trust deed,
and therefore the present value of the economic benefits of any IAS 19 surplus in the pension scheme available to the
Group was £nil. Accordingly, no balance sheet asset or liability existed at 31 August 2023 in relation to this scheme.
The amounts recognised in the Statement of other comprehensive income are as follows:
£m
2024
Reassessment of the recoverability of retirement benefit scheme surplus
87
Actuarial gains on defined benefit pension schemes
2
89
The amounts recognised in the Income statement are as follows:
£m
2024
Administrative expenses (recognised in non-underlying items)
2
Costs of £2m relating to legal and consulting advice, Trustee indemnity insurance and run-off cover, have been incurred
during the year ended 31 August 2024 in relation to the buy out and wind up of the scheme and have been recognised
in the income statement in non-underlying items.
WH Smith PLC Annual Report and Accounts 2024
161
Strategic report Corporate governance Financial statements Additional information
26. Retirement benefit surplus (continued)
a) Defined benefit pension schemes (continued)
i) The WHSmith Pension Trust (continued)
Post balance sheet event
In September 2024, the Trustee transferred the surplus assets to the Group, comprising cash of £75m and an investment
in Permira Credit Solutions III Fund of £12m following finalisation of the buy-out of the defined benefit liabilities in the
Retail Section of the WHSmith Pension Trust. The transfer of assets was net of applicable taxes payable by the Trust of
taxes owed to HMRC, which were settled by the Trustee. As agreed with the Trustee, the return of the surplus preceded
the formal winding up steps of the Retail Section.
The pension surplus of £87m (net of tax and costs) comprises cash of £75m and investments of £12m.
Following the publication of an HMRC newsletter on 24 October 2024, the Group has become aware of a difference in
interpretation of the rules on the calculation of the tax due between the Trustee and HMRC on the surplus arising from
the buy out of the defined benefit pension scheme. As a result, the Group could be required to reimburse the Trustee
£6m. This has not been recorded as a liability in the financial statements of the Group as at 31 August 2024.
ii) United News Shops Retirement Benefit Scheme
The Group also operates a smaller scheme, the United News Shops Retirement Benefits Scheme (“UNSRBS”), which is
closed to new entrants and further service accrual. The scheme provides pension benefits for pensioners and deferred
members based on salary at the date of closure, with increases based on inflation.
A full actuarial valuation of the scheme is carried out every three years with interim reviews in the intervening years.
The latest full actuarial valuation of the scheme was carried out at 5 April 2021 by independent actuaries. Following this
valuation, the deficit was less than £1m.
The present value of obligations and fair value of assets are stated below.
£m
2024
2023
Present value of the obligations
(5)
(5)
Fair value of plan assets
5
5
Retirement benefit obligation recognised in the balance sheet
–
–
b) Defined contribution pension scheme
The pension cost charged to income for the Group’s defined contribution schemes amounted to £7m for the year ended
31 August 2024 (2023: £6m).
27. Acquisitions
During the year, the Group completed two small acquisitions in Ireland and Australia for total consideration of £6m.
These acquisitions resulted in the recognition of additions to goodwill of £6m. There were no acquisitions in the
prior year.
28. Events after the balance sheet date
Share buyback programme
On 10 September 2024, the Company announced its intention to return up to £50m of cash to shareholders through a
rolling share buyback programme. As at 13 November 2024, the Company has repurchased 0.4m of its own shares in the
open market as part of the Company’s share buyback programme for a consideration of £6m.
Return of pension surplus
See Note 26 for information concerning the refund of the WHSmith Pension Trust surplus to the Group in
September 2024.
Notes to the financial statements continued
162
WH Smith PLC Annual Report and Accounts 2024
Financial statements
29. Subsidiary companies
The subsidiary companies included within the financial statements are disclosed below.
UK subsidiaries
Proportion of
shares held
Country of incorporation/ Registered by Group
Name registration
address
Class of shares
companies %
Principal activity
Held directly by WH Smith PLC:
WH Smith Group Limited
England & Wales
1
Ordinary
100
Holding company
Held indirectly:
Books & Stationers Limited
England & Wales
1
Ordinary
100
Retailing
Card Market Limited
England & Wales
1
Ordinary
100
Retailing
funkypigeon.com Limited
England & Wales
1
Ordinary
100
Retailing
Modelzone Limited
England & Wales
1
Ordinary
100
Dormant
Sussex Stationers Limited
England & Wales
1
Ordinary
100
Dormant
The SQL Workshop Limited
England & Wales
1
Ordinary
100
Retailing
The Websters Group Limited
England & Wales
1
Ordinary
100
Dormant
WH Smith (Qatar) Limited
England & Wales
1
Ordinary
100
Dormant
WH Smith Online Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith HS Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith Retail Holdings Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith 1955 Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith High Street Holdings Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith High Street Limited
England & Wales
1
Ordinary &
100
Retailing
Preference
WH Smith Hospitals Holdings Limited
England & Wales
1
Ordinary &
100
Holding Company
Preference
WH Smith Hospitals Limited
England & Wales
1
Ordinary
100
Retailing
WH Smith Promotions Limited
England & Wales
1
Ordinary
100
Retailing
WH Smith Retirement Savings Plan Limited
England & Wales
1
Ordinary
100
Dormant
WH Smith Travel 2008 Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith Travel Holdings Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith Travel Limited
England & Wales
1
Ordinary &
100
Retailing
Preference
WH Smith US Group Holdings Limited
England & Wales
1
Ordinary
100
Holding Company
WH Smith US Retail Holdings Limited
England & Wales
1
Ordinary
100
Holding Company
The following UK subsidiaries will take advantage of the audit exemption set out within Section 479A of the Companies
Act 2006 for the year ended 31 August 2024.
WH Smith PLC Annual Report and Accounts 2024
163
Strategic report Corporate governance Financial statements Additional information
29. Subsidiary companies (continued)
The Company will guarantee the debts and liabilities of the UK subsidiary undertakings below at the balance sheet date
in accordance with Section 479C of the Companies Act 2006. The Company has assessed the probability of loss under
the guarantee as remote.
Name
Company number
Held indirectly:
Books & Stationers Limited
07515820
Card Market Limited
08956574
WH Smith 1955 Limited
00549069
WH Smith High Street Holdings Limited
06560371
WH Smith Hospitals Holdings Limited
03806896
WH Smith Promotions Limited
02339902
The SQL Workshop Limited
02676287
WH Smith Travel 2008 Limited
06560390
WH Smith US Group Holdings Limited
11615426
WH Smith US Retail Holdings Limited
11618458
International joint ventures
The below entities are joint ventures and per the Group’s accounting policies on page 128, the Group’s share of results of
these joint ventures is included in the Group consolidated income statement using the equity method of accounting.
Proportion of
Country of shares held
incorporation/ Registered by Group
Name registration
address
Class of shares
companies %
Principal activity
Held indirectly:
WH Smith – DFA Brasil Cafeteria, Livraria E
Brazil
15
Ordinary
50
Retailing
Conveniencia Eireli
WH Smith Malaysia SDN BHD
Malaysia
11
Ordinary
50
Retailing
WH Smith LLC
Oman
10
Ordinary
50
Retailing
MSP Innovations, LLC
USA
16
Ordinary
33
Retailing
Nash Nails MRG, LLC
USA
16
Ordinary
39
Retailing
International subsidiaries
The below list of interests in overseas entities includes certain entities, particularly in the United States of America,
in which WH Smith PLC holds less than 100 per cent ownership. These entities primarily relate to airport operations in
which the Group is required to engage with a local partner in order to operate the stores. Per the accounting policy set
out on page 128, the Group has determined that it has control of these entities and has therefore consolidated their results.
Proportion of
Country of shares held
incorporation/ Registered by Group
Name registration
address
Class of shares
companies %
Principal activity
Held indirectly:
WH Smith (Global Sourcing) Ltd
Hong Kong
2
Ordinary
100
Product sourcing for
Group companies
WH Smith Australia Pty Limited
Australia
3
Ordinary
100
Retailing
WH Smith Calais S.A.S
France
4
Ordinary
100
Retailing
WH Smith Germany GmbH
Germany
5
Ordinary
100
Retailing
WH Smith Hungary Korlátolt
Hungary
21
Ordinary
100
Retailing
WH Smith Ireland Limited
Ireland
6
Ordinary
100
Retailing
WH Smith Italia S.R.L
Italy
7
Ordinary
100
Retailing
WH Smith Jersey Limited
Jersey
8
Ordinary
100
Retailing
WH Smith LLC
Qatar
9
Ordinary
49
Retailing
WH Smith Nederland B.V.
Netherlands
12
Ordinary
100
Dormant
Notes to the financial statements continued
164
WH Smith PLC Annual Report and Accounts 2024
Financial statements
29. Subsidiary companies (continued)
Proportion of
Country of shares held
incorporation/ Registered by Group
Name registration
address
Class of shares
companies %
Principal activity
WH Smith Belgium (SRL)
Belgium
18
Ordinary
100
Retailing
WH Smith Norway AS
Norway
19
Ordinary
100
Retailing
WH Smith Singapore Pte. Limited
Singapore
13
Ordinary
100
Retailing
WH Smith Spain S.L.
Spain
14
Ordinary
100
Retailing
WH Smith Sweden AB
Sweden
20
Ordinary
100
Retailing
WH Smith USA Holdings Inc
USA
16
Ordinary
100
Holding Company
InMotion Entertainment Holdings LLC
USA
16
Ordinary
100
Holding Company
InMotion Entertainment Personnel Leasing Corp
USA
16
Ordinary
100
Holding Company
WH Smith USA Retail Inc
USA
16
Ordinary
100
Holding Company
InMotion SFO, LLC
USA
16
Ordinary
88
Retailing
Wild Retail Group Pty Limited
Australia
3
Ordinary
100
Retailing
InMotion Entertainment Group, LLC
USA
16
Ordinary
100
Retailing
InMotion AUS, LLC
USA
16
Ordinary
88
Retailing
InMotion BNA-C,LLC
USA
16
Ordinary
80
Retailing
InMotion BOS-BCE, LLC
USA
16
Ordinary
80
Retailing
InMotion BWI, LLC
USA
16
Ordinary
60
Retailing
InMotion CLE, LLC
USA
16
Ordinary
67
Retailing
Soundbalance CLT, LLC
USA
16
Ordinary
67
Retailing
InMotion – SB DC, LLC
USA
16
Ordinary
75
Retailing
InMotion DCA, LLC
USA
16
Ordinary
75
Retailing
InMotion DEN-B, LLC
USA
16
Ordinary
75
Retailing
DFW-A Retail Partners, LLC
USA
16
Ordinary
60
Retailing
DFW-E Retail Partners, LLC
USA
16
Ordinary
65
Retailing
DFW-D/E Retail Partners, LLC
USA
16
Ordinary
70
Retailing
Soundbalance DTW, LLC
USA
16
Ordinary
67
Retailing
InMotion DTW, LLC
USA
16
Ordinary
75
Retailing
InMotion EWR, LLC
USA
16
Ordinary
80
Retailing
InMotion EWR-B, LLC
USA
16
Ordinary
85
Retailing
InMotion FLL, LLC
USA
16
Ordinary
62
Retailing
InMotion FLL-T4, LLC
USA
16
Ordinary
62
Retailing
InMotion IAD, LLC
USA
16
Ordinary
75
Retailing
InMotion LAX, LLC
USA
16
Ordinary
75
Retailing
InMotion LAX-IT,LLC
USA
16
Ordinary
80
Retailing
Soundbalance IAH, LLC
USA
16
Ordinary
67
Retailing
Soundbalance MCO, LLC
USA
16
Ordinary
67
Retailing
InMotion MCO, LLC
USA
16
Ordinary
73
Retailing
Soundbalance Miami, LLC
USA
16
Ordinary
67
Retailing
InMotion Bright, LLC
USA
16
Ordinary
75
Retailing
InMotion MSY, LLC
USA
16
Ordinary
64
Retailing
InMotion ORD, LLC
USA
16
Ordinary
70
Retailing
InMotion ORD T2, LLC
USA
16
Ordinary
70
Retailing
Soundbalance PDX, LLC
USA
16
Ordinary
67
Retailing
Soundbalance PHL, LLC
USA
16
Ordinary
67
Retailing
InMotion PHL, LLC
USA
16
Ordinary
70
Dormant
Soundbalance ATL-E, LLC
USA
16
Ordinary
67
Retailing
WH Smith PLC Annual Report and Accounts 2024
165
Strategic report Corporate governance Financial statements Additional information
29. Subsidiary companies (continued)
Proportion of
Country of shares held
incorporation/ Registered by Group
Name registration
address
Class of shares
companies %
Principal activity
InMotion ATL, LLC
USA
16
Ordinary
80
Retailing
InMotion ATL-A, LLC
USA
16
Ordinary
64
Retailing
InMotion PHX, LLC
USA
16
Ordinary
80
Retailing
InMotion PHX T3, LLC
USA
16
Ordinary
90
Retailing
Soundbalance SAN, LLC
USA
16
Ordinary
55
Retailing
InMotion SAT, LLC
USA
16
Ordinary
75
Retailing
InMotion SEA, LLC
USA
16
Ordinary
88
Retailing
InMotion SFO-T3, LLC
USA
16
Ordinary
85
Retailing
InMotion SFO-IT, LLC
USA
16
Ordinary
90
Retailing
InMotion SLC-A,LLC
USA
16
Ordinary
85
Retailing
InMotion SLC-B,LLC
USA
16
Ordinary
90
Retailing
InMotion SMF,LLC
USA
16
Ordinary
90
Retailing
InMotion CLT, LLC
USA
16
Ordinary
74
Retailing
Marshall Retail Group Holding Co Inc
USA
16
Ordinary
100
Holding company
MRG Holdings Corp
USA
16
Ordinary
100
Holding company
Marshall Retail Group LLC
USA
16
Ordinary
100
Retailing
The Marshall Retail Group Canada Inc
Canada
17
Ordinary
100
Retailing
MRG Baltimore Concourse A, LLC
USA
16
Ordinary
70
Retailing
MRG Baltimore (BWI), LLC
USA
16
Ordinary
70
Retailing
MRG Chicago, LLC
USA
16
Ordinary
65
Retailing
MRG Denver, LLC
USA
16
Ordinary
75
Retailing
MRG Dallas II, LLC
USA
16
Ordinary
65
Retailing
MRG Kansas City, LLC
USA
16
Ordinary
80
Retailing
MRG LaGuardia, LLC
USA
16
Ordinary
80
Retailing
MRG LaGuardia Terminal A, LLC
USA
16
Ordinary
75
Retailing
MRG Los Angeles, LLC
USA
16
Ordinary
70
Retailing
MRG Los Angeles T3
USA
16
Ordinary
70
Retailing
MRG Jacksonville, LLC
USA
16
Ordinary
70
Retailing
MRG Las Vegas, LLC
USA
16
Ordinary
90
Retailing
MRG Oakland, LLC
USA
16
Ordinary
80
Retailing
MRG Palm Springs, LLC
USA
16
Ordinary
75
Retailing
MRG Portland, LLC
USA
16
Ordinary
75
Retailing
MRG Phoenix 1, LLC
USA
16
Ordinary
65
Retailing
MRG Phoenix 2, LLC
USA
16
Ordinary
65
Retailing
MRG Newark, LLC
USA
16
Ordinary
74
Retailing
MRG Newark 2, LLC
USA
16
Ordinary
74
Retailing
MRG Nashville, LLC
USA
16
Ordinary
80
Retailing
MRG Orlando, LLC
USA
16
Ordinary
70
Retailing
MRG Raleigh Terminal 1, LLC
USA
16
Ordinary
55
Retailing
MRG RDU T2, LLC
USA
16
Ordinary
80
Retailing
MRG Sacramento, LLC
USA
16
Ordinary
90
Retailing
MRG Salt Lake City, LLC
USA
16
Ordinary
80
Retailing
MRG San Francisco, LLC
USA
16
Ordinary
80
Retailing
MRG San Francisco Terminal 1, LLC
USA
16
Ordinary
80
Retailing
Notes to the financial statements continued
166
WH Smith PLC Annual Report and Accounts 2024
Financial statements
29. Subsidiary companies (continued)
Proportion of
Country of shares held
incorporation/ Registered by Group
Name registration
address
Class of shares
companies %
Principal activity
MRG San Francisco Terminal 2, LLC
USA
16
Ordinary
85
Retailing
MRG San Francisco Terminal 3, LLC
USA
16
Ordinary
80
Retailing
MRG Savannah, LLC
USA
16
Ordinary
55
Retailing
MRG Seattle, LLC
USA
16
Ordinary
80
Retailing
MRG Washington (DCA), LLC
USA
16
Ordinary
75
Retailing
MRG Washington (DCA) II, LLC
USA
16
Ordinary
75
Retailing
MRG Washington (DCA) III, LLC
USA
16
Ordinary
70
Retailing
MRG Washington (DCA) IV, LLC
USA
16
Ordinary
75
Retailing
MRG Washington (IAD), LLC
USA
16
Ordinary
75
Retailing
Midway Fresh MRG, LLC
USA
16
Ordinary
20
Retailing
WH Smith DEN, LLC
USA
16
Ordinary
70
Retailing
Newsrail Resources Ltd
Ireland
6
Ordinary
100
Retailing
MRG Las Vegas II, LLC
USA
16
Ordinary
95
Retailing
MRG Portland II, LLC
USA
16
Ordinary
70
Retailing
MRG Sarasota, LLC
USA
16
Ordinary
80
Retailing
MRG San Diego, LLC
USA
16
Ordinary
75
Retailing
InMotion New Jersey, LLC
USA
16
Ordinary
65
Retailing
InMotion New York, LLC
USA
16
Ordinary
80
Retailing
InMotion Pittsburgh, LLC
USA
16
Ordinary
90
Retailing
WH Smith Travel (Jersey) Ltd
Jersey
8
Ordinary
100
Retailing
WH Smith DCA, LLC
USA
16
Ordinary
75
Retailing
Registered addresses
1
Greenbridge Road, Swindon, Wiltshire SN3 3RX
2
Suites 13A01–04, 13 Floor, South Tower, World Finance Centre, Harbour City, Tsim Sha Tsui, Kowloon, Hong Kong
3
Suite 401, 80 William Street, Woolloomooloo NSW 2011, Australia
4
38 Rue des Mathurins, 75008 Paris 8, France
5
Terminal Ring 1, Zentralgebaude Ost, Zi. 5. 035, 40474 Dusseldorf, Germany
6
6th Floor, Grand Canal Square, Dublin 2, Ireland
7
Via Porlezza 12, Cap 20123, Milano, Italy
8
72/74 King Street, St Helier, Jersey, JE2 4WE
9
27 Um Ghwalinah Road, 230 C-ring Road, Doha, Qatar
10
PO Box 3275, PC112, Ruwi, Oman
11
C2–6–1, Solaris Dutamas, 1, Jalan Dutamas 1, 50480, Kuala Lumpur, Malaysia
12
Weteringschans 94, 1017 XS, Amsterdam, Netherlands
13
11 Keng Cheow Street #3–10 The Riverside Piazza, Singapore 059608
14
Paseo de Recoletos, 27, 7ª, 28004, Madrid, Spain
15
Avenida das Americas, No. 3434, Barra da Tijuca, CEP 22640–102, Rio de Janeiro, RJ, Brazil
16
6600
Bermuda Road, Las Vegas, Nevada, NV 89119, USA
17
2200
HSBC Building, 885 West Georgia Street, Vancouver, BC V6C 3E8, Canada
18
Posthofbrug 10 boîte 4, 2600 Anvers, Belgium
19
Bryggegata 6, 0250 Oslo, Norway
20
Norrlandsgatan 16, 111 43 Stockholm
21
1139
Budapest, Vaci ut 99–105, Hungary
WH Smith PLC Annual Report and Accounts 2024
167
Strategic report Corporate governance Financial statements Additional information
Company balance sheet
As at 31 August 2024
£m Note 2024 2023
Non-current assets
Investments 3 835 835
835 835
Current assets
Receivables: amounts falling due within one year 4 44 87
44 87
Current liabilities
Payables: amounts falling due within one year 5 (130) (130)
(130) (130)
Net current liabilities (86) (43)
Non-current liabilities
Borrowings 6 (310) (301)
(310) (301)
Total net assets 439 491
Shareholders’ equity
Called up share capital 9 29 29
Share premium account 316 316
Other reserves 10 40 40
Capital redemption reserve 10 13 13
Profit and loss account
1
41 93
Total equity 439 491
1 The loss for the year attributable to shareholders was £11m (2023: loss of £19m). See Note 2
The financial statements of WH Smith PLC, registered number 5202036, on pages 168 to 172 were approved by the Board
of Directors and authorised for issue on 14 November 2024 and were signed on its behalf by:
Carl Cowling Robert Moorhead
Group Chief Executive Chief Financial Officer and Chief Operating Officer
Company statement of changes in equity
For the year ended 31 August 2024
£m
Share
capital
Share
premium
Capital
redemption
reserve
Other
reserves
Profit
and loss
account Total
Balance at 1 September 2023 29 316 13 40 93 491
Loss for the financial year – – – – (11) (11)
Total comprehensive loss for the year – – – – (11) (11)
Equity dividends paid during the year – – – – (41) (41)
Balance at 31 August 2024 29 316 13 40 41 439
Balance at 1 September 2022 29 316 13 40 134 532
Loss for the financial year – – – – (19) (19)
Total comprehensive loss for the year – – – – (19) (19)
Equity dividends paid during the year – – – – (22) (22)
Balance at 31 August 2023 29 316 13 40 93 491
168
WH Smith PLC Annual Report and Accounts 2024
Financial statements
Notes to the Company financial statements
1. Accounting policies
a) Basis of preparation
The Company’s financial statements have been prepared on a going concern basis, as detailed in Note 1 of the Notes
tothe consolidated financial statements on page 126.
The financial statements are prepared in accordance with the Companies Act 2006 as applicable to companies using
FRS 101. The Company meets the definition of a qualifying entity under FRS 100 (Application of Financial Reporting
Requirements) issued by the Financial Reporting Council. Accordingly, the financial statements have been prepared
inaccordance with FRS 101 “Reduced Disclosure Framework” as issued by the Financial Reporting Council.
As permitted by FRS 101, the Company has taken advantage of the disclosure exemption available under the standard in
relation to share-based payments, financial instruments, capital management, presentation of comparative information
in respect of certain assets, presentation of a cash flow statement, standards not yet effective, impairment of assets and
related party transactions. Where required, equivalent disclosures are given in the consolidated financial statements of
the Group.
The financial statements are prepared under the historical cost convention.
The principal accounting policies adopted are the same as those set out in Note 1 to the consolidated financial statements
except as noted below. No new accounting standards, or amendments to accounting standards, or IFRIC interpretations
that are effective for the year ended 31 August 2024, have had a material impact on the Company.
In the application of the Company’s accounting policies, the Directors do not consider that there are any further critical
accounting judgements or sources of estimation uncertainty that could lead to a material change in the carrying
amounts of assets and liabilities.
b) Investments in subsidiary undertakings
Investments in subsidiaries are valued at historical cost less provision for impairment in value. Investments in subsidiaries
are tested annually for impairment. An impairment loss is recognised for the amount by which the carrying value exceeds
its recoverable amount. The recoverable amount is the higher of an asset’s net realisable value and value-in-use.
c) Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered)
using the tax rates and laws that have been enacted or substantively enacted at the balance sheet date.
d) Receivables
Receivables represent amounts due from other Group companies. Receivables are initially measured at fair value and
subsequently measured at amortised cost using the effective interest rate method, less provision for impairment.
A provision for the expected credit loss on receivables is established at inception. This is modified when there is a change
in the credit risk and hence evidence that the Company will not be able to collect all amounts due according to the
original terms of receivables.
2. Loss for the year
The Company has not presented its own profit and loss account as permitted by Section 408 of the Companies Act 2006.
The loss for the year attributable to shareholders, which is stated on an historical cost basis, was £11m (2023: loss of £19m)
comprising finance costs of £15m (2023: £23m), non-underlying items of £nil (2023: £1m), offset by a tax credit of £4m
(2023: £5m). There were no other recognised gains or losses.
The Company did not have any employees during the year ended 31 August 2024 (2023: nil). All directors were remunerated
by other Group companies. Disclosure of audit fees payable in respect of the Company is included in Note 3 to the Group’s
consolidated financial statements.
3. Investments
A full list of the Company’s subsidiary undertakings is included in Note 29 of the Notes to the consolidated financial
statements. The registered office of WH Smith Retail Holdings Limited is Greenbridge Road, Swindon, Wiltshire SN3 3RX.
The investment in subsidiaries balance has been tested for impairment at the balance sheet date. The recoverable
amount of the investment is assumed to approximate the Group’s market capitalisation on the London Stock Exchange,
adjusted for any assets or liabilities on the Company’s balance sheet. There was substantial headroom between the
recoverable amount of the investment and its carrying value. Consequently, no impairment has been recognised in
respect of the investment.
During the year, the Company completed in a share for share exchange transaction with WH Smith Group Limited
(awholly owned subsidiary) whereby the Company received additional shares in WH Smith Group Limited in exchange
for the entire issued share capital of WH Smith Retail Holdings Limited. The exchange did not impact the carrying value
of the investment.
WH Smith PLC Annual Report and Accounts 2024
169
Strategic report Corporate governance Financial statements Additional information
4. Receivables: amounts falling due within one year
£m 2024 2023
Amounts owed by subsidiary undertakings 40 82
Current tax receivable 4 5
44 87
Amounts receivable from subsidiary undertakings are non-interest bearing and repayable on demand. The Company has
undertaken a review of the liquidity position of the counterparty subsidiaries and noted that the subsidiaries continue to
have sufficient immediately available funds to settle the receivables at the balance sheet date. As a result, no expected
credit losses have been included in the profit and loss account in the current year in respect of these receivables.
5. Payables: amounts falling due within one year
£m 2024 2023
Amounts owed to subsidiary undertakings 129 129
Accruals and deferred income 1 1
130 130
Amounts owed to subsidiary undertakings are unsecured, non-interest bearing and repayable on demand.
6. Borrowings
£m 2024 2023
Convertible bonds 310 301
310 301
Revolving credit facilities
The Group has a £400m committed revolving credit facility (“RCF”). The first extension option has been exercised during
the year, taking the maturity to 13 June 2029. The RCF has one further uncommitted extension option of one year,
which would, subject to lender approval, extend the maturity date to 13 June 2030 if exercised. Alongside other Group
companies, the Company is a guarantor on this facility.
The RCF is provided by a syndicate of banks: Barclays Bank PLC, BNP Paribas, Citibank N.A. London Branch, Fifth Third
Bank National Association, HSBC UK Bank PLC, JP Morgan Securities PLC, PNC Capital Markets LLC, Banco Santander
SA London Branch and Skandinaviska Enskilda Banken AB (PUBL). Utilisation is interest bearing at a margin over SONIA.
As at 31 August 2024, theGroup has drawn down £117m on the RCF (2023: £84m, on the RCF). The Company has not
drawn on the facility.
Term loans
Term loans of £133m were repaid in the prior year.
Convertible bonds
The Company issued £327m guaranteed senior unsecured convertible bonds on 7 May 2021 with a 1.625 per cent
per annum coupon payable semi-annually in arrears in equal instalments. The bonds are convertible into new and/
or existing ordinary shares of WH Smith PLC. The initial conversion price was set at £24.99 representing a premium of
40per cent above the reference share price on 28 April 2021 (£17.85). The conversion price at 31 August 2024 was £24.3104
(2023: £24.7032). If not previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed at par
on 7 May 2026.
The convertible bond is a compound financial instrument, consisting of a financial liability component and an equity
component, representing the value of the conversion rights. The initial fair value of the liability portion of the convertible
bond is determined using a market interest rate for an equivalent non-convertible bond at the issue date. The liability
is subsequently recognised on an amortised cost basis using the effective interest rate method until extinguished
on conversion or maturity of the bonds. The remainder of the proceeds was allocated to the conversion option and
recognised in equity (Other reserves), and not subsequently remeasured. As a result £41m of the initial proceeds of
£327m was recognised in equity representing the option component.
Transaction costs of £6m were allocated between the two components and the element relating to the debt component
of £5m is amortised through the effective interest rate method. The issue costs apportioned to the equity component of
£1m have been deducted from equity.
Notes to the Company financial statements continued
170
WH Smith PLC Annual Report and Accounts 2024
Financial statements
7. Dividends
Amounts paid and recognised as distributions to shareholders in the year are as follows:
£m 2024 2023
Final dividend for the year ended 31 August 2023 of 20.8p per ordinary share 27 –
Interim dividend for the year ended 31 August 2024 of 11.0p per ordinary share 14 –
Final dividend for the year ended 31 August 2022 of 9.1p per ordinary share – 12
Interim dividend for the year ended 31 August 2023 of 8.1p per ordinary share – 10
41 22
The Board has proposed a final dividend of 22.6p per share, amounting to a final dividend of c.£30m, is not included
as a liability in these financial statements and, subject to shareholder approval, will be paid on 6 February 2025 to
shareholders registered at the close of business on 17 January 2025.
8. Contingent liabilities
Contingent liabilities of £1m (2023: £1m) are in relation to insurance letters of credit.
The Company will guarantee the debts and liabilities of the below UK subsidiary undertakings at the balance sheet date
in accordance with Section 479C of the Companies Act 2006. The Company has assessed the probability of loss under
the guarantee as remote.
Name Company number
Held indirectly:
Books & Stationers Limited 07515820
Card Market Limited 08956574
WH Smith 1955 Limited 00549069
WH Smith High Street Holdings Limited 06560371
WH Smith Hospitals Holdings Limited 03806896
WH Smith Promotions Limited 02339902
The SQL Workshop Limited 02676287
WH Smith Travel 2008 Limited 06560390
WH Smith US Group Holdings Limited 11615426
WH Smith US Retail Holdings Limited 11618458
9. Called up share capital
Allotted and fully paid
2024 2023
Number of
shares
(millions)
Nominal
value
£m
Number of
shares
(millions)
Nominal
value
£m
Equity:
Ordinary shares of 22
6
⁄
67
p 131 29 131 29
Total 131 29 131 29
During the year there were no ordinary shares allotted under the terms of the Company’s Sharesave Scheme
(2023: 2,019ordinary shares). There was no effect from the prior year allotment of ordinary shares on share premium.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at the meetings of the Company.
WH Smith PLC Annual Report and Accounts 2024
171
Strategic report Corporate governance Financial statements Additional information
10. Other reserves and Capital redemption reserve
Other reserves are reserves created to recognise the equity component of the convertible bond issued in April 2021
(seeNote 6) and represents the value of the conversion rights at initial recognition of £41m, net of transaction costs
of£1m.
The Capital redemption reserve of £13m (2023: £13m) represents the par value of shares repurchased and cancelled under
the Company’s share buyback programme and is reclassified from Share capital to the Capital redemption reserve.
11. Events after the balance sheet date
Share buyback programme
On 10 September 2024, the Company announced its intention to return up to £50m of cash to shareholders through
arolling share buyback programme.
As at 13 November 2024, the Company has repurchased 0.4m of its own shares in the open market as part of the
Company’s share buyback programme for a consideration of £6m.
Receipt of dividends from subsidiaries
On 8 November 2024, the Company received a dividend £100m from WH Smith Group Limited, a directly held
subsidiary undertaking.
Notes to the Company financial statements continued
172
WH Smith PLC Annual Report and Accounts 2024
Financial statements
Glossary (unaudited)
Alternative performance measures
In reporting financial information, the Group presents alternative performance measures, “APMs”, which are not defined
or specified under the requirements of IFRS.
The Group believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures,
providestakeholders with additional useful information on the underlying trends, performance and position of
the Group andare consistent with how business performance is measured internally. The alternative performance
measures are not defined by IFRS and therefore may not be directly comparable with other companies’ alternative
performance measures.
Non-underlying items
The Group has chosen to present a measure of profit and earnings per share which excludes certain items, that are
considered non-underlying and are not considered to be part of the normal operations of the Group. The Group believes
that the separate disclosure of these items provides additional useful information to users of the financial statements to
enable a better understanding of the Group’s underlying financial performance.
The Group exercises judgement in determining whether income or expenses are reported as non-underlying.
This assessment includes consideration of the size, nature or cause of occurrence of the item, as well as consistency with
prior periods. Non-underlying items can include, but are not limited to, restructuring and transformation costs linked
to Board agreed programmes, costs relating to M&A activity, impairment charges and other property costs, significant
items relating to pension schemes, amortisation of intangible assets acquired in business combinations, and the related
tax effect of these items. Reversals associated with items previously reported as non-underlying, such as reversals of
impairments and releases of provisions or liabilities are also reported in non-underlying items.
Items recognised in Other comprehensive income/loss may also be identified as non-underlying for the purposes of
narrative explanation of the Group’s performance, where the Group has determined that they are associated with the
above categories and are judged to have met the Group’s definition of non-underlying.
IFRS 16
The Group adopted IFRS 16 in the year ended 31 August 2020. IFRS 16 superseded the lease guidance under IAS 17 and
the related interpretations. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure
of leases and requires lessees to account for all leases under a single on-balance sheet model as the distinction between
operating and finance leases is removed. The only exceptions are short-term and low-value leases. At the commencement
date of a lease, alessee will recognise a lease liability for the future lease payments and an asset (right-of-use asset)
representing the right to use the underlying asset during the lease term. Lessees are required to separately recognise
theinterest expense on the lease liability and the depreciation expense on the right-of-use asset.
Management have chosen to exclude the effects of IFRS 16 for the purposes of narrative commentary on the Group’s
performance and financial position in the Strategic report. The effect of IFRS 16 on the Group income statement is
to front-load total lease expenses, being higher at the beginning of a lease contract, and lower towards the end of a
contract, and this is further influenced by timing of renewals and contract wins, and lengths of contracts. As a result
of these complexities, IFRS16 measures of profit and EBITDA (used as a proxy for cash generation) do not provide
meaningful KPIs or measures for the purposes of assessing performance, concession quality or for trend analysis,
therefore management continue to use pre-IFRS 16 measures internally.
The impact of the implementation of IFRS 16 on the Income statement and Segmental information is provided in Notes
A1 and A2 below. There is no impact on cash flows, although the classification of cash flows has changed, with an increase
in net cash flows from operating activities being offset by a decrease in net cash flows from financing activities, as set out
in Note A9 below. The balance sheet as at 31 August 2024 both including and excluding the impact of IFRS 16 is shown in
NoteA10 below.
Leases policies applicable prior to 1 September 2019
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the Group at their fair value determined at the inception of the
lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included
in the balance sheet as a finance lease obligation. These assets are depreciated over their expected useful lives on the same
basis as owned assets or, where shorter, over the term of the relevant lease. Lease payments are apportioned between
finance charges and a reduction of the lease obligations so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are recognised directly in the income statement.
Rentals payable and receivable under operating leases are charged to the income statement on a straight-line basis
over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are
also spread on a straight-line basis over the lease term. The Group has a number of lease arrangements in which the
rent payable is contingent on revenue. Contingent rentals payable, based on store revenues, are accrued in line with
revenues generated.
WH Smith PLC Annual Report and Accounts 2024
173
Strategic report Corporate governance Financial statements Additional information
Glossary (unaudited) continued
Definitions and reconciliations
In line with the Guidelines on Alternative Performance Measures issued by the European Securities and Markets
Authority (“ESMA”), we have provided additional information on the APMs used by the Group below, including full
reconciliations back to the closest equivalent statutory measure.
APM Closest equivalent
IFRSmeasure
Reconciling items to
IFRS measure
Definition and purpose
Income statement measures
Headline measures Various See Notes A1–A10
and Note A12
Headline measures exclude the impact of IFRS 16 (applying the
principles of IAS 17). Reconciliations of all Headline measures are
provided in Notes A1 to A10 and Note A12.
Group profit
before tax and
non-underlying
items
Group profit
before tax
See Group
income
statement and
Note A1
Group profit before tax and non-underlying items
excludes the impact of non-underlying items as described
below. A reconciliation from Group profit before tax and
non-underlying items to Group profit before tax is provided on
the Group income statement on page 121, and on a Headline
(pre-IFRS 16) basis in Note A1.
Group profit from
trading operations
and segment
tradingprofit
Group
operating
profit
See Note 2
andNote A2
Group profit from trading operations and segment trading
profit are stated after directly attributable share-based payment
and pension service charges and before non-underlying items,
unallocated costs, finance costs and income tax expense.
A reconciliation from the above measures to Group operating
profit and Group profit before tax on an IFRS 16 basis is provided
in Note 2 to the financial statements and on a Headline (pre-IFRS
16) basis in Note A2.
Non-underlying
items
None Refer to
definition and
see Note 4
andNote A6
Items which are not considered part of the normal operating
costs of the business, are non-recurring and considered
exceptional because of their size, nature or incidence, are treated
as non-underlying items and disclosed separately. The Group
believes that the separate disclosure of these items provides
additional useful information to users of the financial statements
to enable a better understanding of the Group’s underlying
financial performance. An explanation of the nature of the items
identified as non-underlying on an IFRS 16 basis is provided in
Note 4 to the financial statements, and on a Headline (pre-IFRS
16) basis in Note A6.
Earnings per
share before
non-underlying
items
Earnings
per share
Non-underlying
items, see Note 9
and Note A4
Profit for the year attributable to the equity holders of the
parent before non-underlying items divided by the weighted
average number of ordinary shares in issue during the financial
year. A reconciliation is provided on an IFRS 16 basis in Note 9
and on a Headline (pre-IFRS 16) basis in Note A4.
Headline EBITDA Group
operating
profit
Refer
to definition
Headline EBITDA is Headline Group operating profit before
non-underlying items adjusted for pre-IFRS 16 depreciation,
amortisation and impairment.
Effective tax rate None Non-underlying
items
Total income tax charge excluding the tax impact of
non-underlying items divided by Group Headline profit before
tax and non-underlying items. See Note 7 on an IFRS 16 basis,
and Notes A3 and A6 on a Headline pre-IFRS 16 basis.
Fixed charges
cover
None Refer to
definition
This performance measure calculates the number of times Profit
before tax covers the total fixed charges included in calculating
profit or loss. Fixed charges included in this measure are net
finance charges (excluding finance charges from IFRS 16 leases)
and net operating lease rentals stated on a pre-IFRS 16 basis.
The calculation of this measure is outlined in Note A5.
174
WH Smith PLC Annual Report and Accounts 2024
Additional information
Definitions and reconciliations (continued)
APM Closest equivalent
IFRSmeasure
Reconciling items to
IFRS measure
Definition and purpose
Income statement measures (continued)
Gross margin Gross profit
margin
Not applicable Where referred to throughout the Annual report, gross margin is
calculated as gross profit divided by revenue.
Like-for-like
revenue
Movement in
revenue per
the income
statement
– Revenue
change from
non-like-for-
like stores
– Foreign
exchange
impact
Like-for-like revenue is the change in revenue from stores that
have been open for at least a year, with a similar selling space at
a constant foreign exchange rate. See Note A11.
Balance sheet measures
Headline net debt Net debt Reconciliation of
net debt
Headline net debt is defined as cash and cash equivalents,
lessbank overdrafts and other borrowings and both current and
non-current obligations under finance leases as defined on a
pre-IFRS 16 basis. Lease liabilities recognised as a result of IFRS 16
are excluded from this measure. A reconciliation to net debt on
an IFRS 16 basis is provided in Note A8.
Other measures
Free cash flow Net cash
inflow from
operating
activities
See Note A7 and
Strategic report
page 29
Free cash flow is defined as the net cash inflow from operating
activities before the cash flow effect of IFRS 16, non-underlying
items and pension funding, less net capital expenditure.
The components of free cash flow are shown in Note A7 and on
page29, as part of the Strategic report.
Operating
cashflow
Net cash
inflow from
operating
activities
See Strategic
report page 29
Operating cash flow is defined as Headline profit before tax
and non-underlying items, excluding Headline depreciation,
amortisation, impairment and other non-cash items.
The components of Operating cash flow are shown on page 29,
aspart of the Strategic report.
Return on capital
employed (“ROCE”)
None Not applicable Return on Capital Employed is calculated as the Headline
trading profit as a percentage of operating capital employed,
and is stated on a pre-IFRS 16 basis. Operating capital employed
is calculated as the 12-month average net assets, excluding
net debt, retirement benefit obligations and net current and
deferred tax balances. See the Strategic report on page 31.
Leverage None Not applicable Leverage is calculated as Headline net debt divided by rolling
12 month Headline EBITDA before non-cash items (on a pre-IFRS
16 basis).
WH Smith PLC Annual Report and Accounts 2024
175
Strategic report Corporate governance Financial statements Additional information
Glossary (unaudited) continued
A1. Reconciliation of Headline to Statutory Group operating profit
and Group profit beforetax
2024
Pre-IFRS 16 basis IFRS 16 basis
£m
Headline, before
non-underlying
items(pre-IFRS 16)
Headline
non-underlying
items(pre-IFRS 16)
Headline
(pre-IFRS 16)
IFRS 16
adjustments
IFRS 16
adjustments
non-underlying items Total
Revenue 1,918 – 1,918 – – 1,918
Cost of sales (706) – (706) – – (706)
Gross profit 1,212 – 1,212 – – 1,212
Distribution costs (828) – (828) 20 – (808)
Administrative expenses (197) – (197) (1) – (198)
Other income 6 – 6 1 – 7
Non-underlying items – (56) (56) – 1 (55)
Group operating profit/(loss) 193 (56) 137 20 1 158
Finance costs (27) (1) (28) (25) 1 (52)
Profit/(loss) before tax 166 (57) 109 (5) 2 106
Income tax (charge)/credit (39) 9 (30) 1 – (29)
Profit/(loss) for the year 127 (48) 79 (4) 2 77
Attributable to:
Equity holders of the parent 117 (48) 69 (4) 2 67
Non-controlling interests 10 – 10 – – 10
127 (48) 79 (4) 2 77
2023
Pre-IFRS 16 basis IFRS 16 basis
£m
Headline, before
non-underlying
items(pre-IFRS 16)
Headline
non-underlying
items(pre-IFRS 16)
Headline
(pre-IFRS 16)
IFRS 16
adjustments
IFRS 16
adjustments
non-underlying items Total
Revenue 1,793 – 1,793 – – 1,793
Cost of sales (682) – (682) – – (682)
Gross profit 1,111 – 1,111 – – 1,111
Distribution costs (756) – (756) 10 – (746)
Administrative expenses (196) – (196) (1) – (197)
Other income 10 – 10 4 – 14
Non-underlying items – (13) (13) – (13) (26)
Group operating profit/(loss) 169 (13) 156 13 (13) 156
Finance costs (26) (2) (28) (19) 1 (46)
Profit/(loss) before tax 143 (15) 128 (6) (12) 110
Income tax (charge)/credit (28) 2 (26) 1 3 (22)
Profit/(loss) for the year 115 (13) 102 (5) (9) 88
Attributable to:
Equity holders of the parent 106 (13) 93 (5) (9) 79
Non-controlling interests 9 – 9 – – 9
115 (13) 102 (5) (9) 88
176
WH Smith PLC Annual Report and Accounts 2024
Additional information
A2. Reconciliation of Headline to Statutory segmental trading profit/(loss)
and Group profit from trading operations
2024
Pre-IFRS 16 basis IFRS 16 basis
£m
Headline, before
non-underlying
items(pre-IFRS 16)
Headline
non-underlying
items(pre-IFRS 16)
Headline
(pre-IFRS 16)
IFRS 16
adjustments Total
Travel UK trading profit 122 – 122 4 126
North America trading profit 54 – 54 4 58
Rest of the World trading profit 13 – 13 5 18
Total Travel trading profit 189 – 189 13 202
High Street trading profit 32 – 32 7 39
Group profit from trading operations
221 – 221 20 241
Unallocated central costs (28) – (28) – (28)
Group operating profit before
non-underlying items 193 – 193 20 213
Non-underlying items – (56) (56) 1 (55)
Group operating profit/(loss) 193 (56) 137 21 158
2023
Pre-IFRS 16 basis IFRS 16 basis
£m
Headline, before
non-underlying
items(pre-IFRS 16)
Headline
non-underlying
items(pre-IFRS 16)
Headline
(pre-IFRS 16)
IFRS 16
adjustments Total
Travel UK trading profit/(loss) 102 – 102 (1) 101
North America trading profit 49 – 49 3 52
Rest of the World trading profit 13 – 13 – 13
Total Travel trading profit 164 – 164 2 166
High Street trading profit 32 – 32 11 43
Group profit from trading operations 196 – 196 13 209
Unallocated central costs (27) – (27) – (27)
Group operating profit before
non-underlying items 169 – 169 13 182
Non-underlying items – (13) (13) (13) (26)
Group operating profit/(loss) 169 (13) 156 – 156
WH Smith PLC Annual Report and Accounts 2024
177
Strategic report Corporate governance Financial statements Additional information
Glossary (unaudited) continued
A3. Reconciliation of Headline to Statutory tax expense
2024 2023
£m
Headline
(pre-IFRS 16)
IFRS 16
adjustments IFRS 16
Headline
(pre-IFRS 16)
IFRS 16
adjustments IFRS 16
Profit before tax and non-underlying items 166 (5) 161 143 (6) 137
Tax on profit – Standard rate of UK corporation tax
(25%;2023:blended rate of 21.5%)
22 (1) 21 14 (1) 13
Adjustment in respect of prior years – – – (2) – (2)
Total current tax charge/(credit) 22 (1) 21 12 (1) 11
Deferred tax – current year 22 – 22 19 – 19
Deferred tax – prior year (5) – (5) (3) – (3)
Deferred tax – adjustment in respect of change
intaxrates
– – – – – –
Tax charge/(credit) on Headline profit 39 (1) 38 28 (1) 27
Tax on non-underlying items – current tax (1) – (1) – – –
Tax on non-underlying items – deferred tax (8) – (8) (2) (3) (5)
Total tax charge/(credit) on profit 30 (1) 29 26 (4) 22
A4. Calculation of Headline and Statutory earnings per share
2024 2023
Millions Basic EPS Diluted EPS Basic EPS Diluted EPS
Weighted average shares in issue (Note 9) 129 131 130 132
2024 2023
Profit for
the year
attributable to
equity holders
of the parent Basic EPS Diluted EPS
Profit for
the year
attributable to
equity holders
of the parent Basic EPS Diluted EPS
£m pence pence £m pence pence
Headline (pre-IFRS 16 basis)
– Before non-underlying items 117 90.7 89.3 106 81.5 80.3
– Non-underlying items (48) (37.2) (36.6) (13) (10.0) (9.8)
– Total 69 53.5 52.7 93 71.5 70.5
IFRS 16 adjustments
– Before non-underlying items (4) (3.1) (3.0) (5) (3.8) (3.8)
– Non-underlying items 2 1.5 1.4 (9) (6.9) (6.9)
– Total (2) (1.6) (1.6) (14) (10.7) (10.7)
IFRS 16 basis
– Before non-underlying items 113 87.6 86.3 101 77.7 76.5
– Non-underlying items (46) (35.7) (35.2) (22) (16.9) (16.7)
– Total 67 51.9 51.1 79 60.8 59.8
178
WH Smith PLC Annual Report and Accounts 2024
Additional information
A5. Fixed charges cover
£m 2024 2023
Headline net finance costs (pre-IFRS 16) 27 26
Net operating lease charges (pre-IFRS 16) 365 326
Total fixed charges 392 352
Headline profit before tax and non-underlying items 166 143
Headline profit before tax, non-underlying items and fixed charges 558 495
Fixed charges cover – times 1.4x 1.4x
A6. Non-underlying items on pre-IFRS 16 and IFRS 16 bases
2024 2023
£m
Headline
(pre-IFRS 16) IFRS 16
Headline
(pre-IFRS 16) IFRS 16
Amortisation of acquired intangible assets 3 3 3 3
Impairment of assets
– property, plant and equipment
18 15 4 4
– intangible assets
5 5 – –
– right-of-use assets
– 10 – 15
Provisions for onerous contracts
11 6 5 3
Transformation programmes – supply chain and IT
9 9 – –
Costs associated with pensions
2 2 1 1
IFRS 16 remeasurement gains
– (3)
– –
Costs relating to M&A activity and Group legal entity structure
4 4
– –
Re-platform of whsmith.co.uk and other costs
4 4
– –
Non-underlying items, included in operating profit
56 55 13 26
Finance costs associated with refinancing
– – 1 1
Finance costs associated with onerous contracts
1 – 1 –
Non-underlying items, before tax 57 55 15 27
Tax credit on non-underlying items (9) (9) (2) (5)
Non-underlying items, after tax 48 46 13 22
Non-underlying items on a pre-IFRS 16 basis are calculated on a consistent basis with IFRS 16, with the exception of the
below items.
Impairment of right-of-use assets
On a pre-IFRS 16 basis right-of-use assets are not recognised, therefore the right-of-use asset impairment of £10m is also
not recognised.
Provisions for onerous contracts
A charge of £11m has been recognised on a pre-IFRS 16 basis to provide for the unavoidable costs of continuing to service
certain non-cancellable supplier and lease contracts where the space is vacant, a contract is loss-making or currently
not planned to be used for ongoing operations. On an IFRS 16 basis this charge is £6m, as the charge is partially offset by
impairments to right-of-use assets of £10m that are not recognised on a pre-IFRS 16 basis.
IFRS 16 remeasurement gains
Gains of £3m have been recognised under IFRS 16 that have resulted from the derecognition of lease liabilities on
exit from certain locations, in which right-of-use assets were previously impaired. Lease liabilities and right-of-use
assets are not recognised on a pre-IFRS 16 basis, and therefore these gains do not exist in the Headline measure of
non-underlying items.
A tax credit of £9m (2023: £5m) has been recognised in relation to the above items (£9m pre-IFRS 16 (2023: £2m)).
WH Smith PLC Annual Report and Accounts 2024
179
Strategic report Corporate governance Financial statements Additional information
Glossary (unaudited) continued
A7. Free cash flow
£m 2024 2023
Net cash inflow from operating activities 275 251
Cash flow impact of IFRS 16 (Note A9) (111) (116)
Add back:
– Cash impact of non-underlying items 28 9
– Financing arrangement fees – 3
– Other non-cash items (8) (5)
Deduct:
– Purchase of property, plant and equipment (115) (106)
– Purchase of intangible assets (incl. £2m non-underlying capital expenditure) (16) (16)
Free cash flow 53 20
A8. Headline net debt
The table below shows Headline net debt (pre-IFRS 16). This includes lease liabilities that were previously presented as
finance leases (applying the principles of IAS 17), and Group accounting policies as applicable prior to 1 September 2019,
described in the Glossary on page 173, but excludes additional lease liabilities recognised on application of IFRS 16.
£m 2024 2023
Borrowings
– Revolving credit facility (117) (84)
– Convertible bonds (310) (301)
– Lease liabilities (Note 15) (626) (566)
Liabilities from financing activities (1,053) (951)
Cash and cash equivalents 56 56
Net debt (IFRS 16) (Note 18) (997) (895)
Add back lease liabilities recognised under IFRS 16
1
626 565
Headline net debt (pre-IFRS 16) (371) (330)
1 Excludes lease liabilities previously recognised as finance leases on a pre-IFRS 16 basis
A9. Cash flow disclosure impact of IFRS 16
There is no impact of IFRS 16 on cash flows, although the classification of cash flows has changed, with an increase in net
cash flows from operating activities being offset by a decrease in net cash flows from financing activities.
2024 2023
£m
Headline
(pre-IFRS 16)
IFRS 16
adjustment IFRS 16
Headline
(pre-IFRS 16)
IFRS 16
adjustment IFRS 16
Net cash inflows from operating activities 164 111 275 135 116 251
Net cash outflows from investing activities (137) – (137) (122) – (122)
Net cash outflows from financing activities (27) (111) (138) (87) (116) (203)
Net decrease in cash in the period – – – (74) – (74)
180
WH Smith PLC Annual Report and Accounts 2024
Additional information
A10. Balance sheet impact of IFRS 16
The balance sheet including and excluding the impact of IFRS 16 is shown below:
2024 2023
£m
Headline
(pre-IFRS 16)
IFRS 16
adjustment IFRS 16
Headline
(pre-IFRS 16)
IFRS 16
adjustment IFRS 16
Goodwill and other intangible assets 491 (1) 490 506 (1) 505
Property, plant and equipment 308 8 316 263 7 270
Right-of-use assets – 505 505 – 444 444
Investments in joint ventures 2 – 2 2 – 2
801 512 1,313 771 450 1,221
Inventories 217 – 217 205 – 205
Payables less receivables (183) (7) (190) (216) (3) (219)
Working capital 34 (7) 27 (11) (3) (14)
Net current and deferred tax assets 33 – 33 45 – 45
Provisions (28) 11 (17) (26) 9 (17)
Operating assets employed 840 516 1,356 779 456 1,235
Net debt (371) (626) (997) (330) (565) (895)
Net assets excluding retirement benefit surplus 469 (110) 359 449 (109) 340
Retirement benefit surplus 87 – 87 – – –
Total net assets 556 (110) 446 449 (109) 340
A11. Like-for-like revenue reconciliation
The reconciling items between like-for-like revenue change and total revenue change are shown below:
Per cent Travel UK
North
America
Rest of the
World Travel Total High Street Group
Like-for-like revenue change 10% –% 9% 7% (2)% 5%
Net space impact 2% 9% 9% 5% (2)% 3%
Foreign exchange –% (3)% (3)% (1)% –% (1)%
Total revenue change 12% 6% 15% 11% (4)% 7%
A12. Operating lease expense
Amounts recognised in Headline Group operating profit on a pre-IFRS 16 basis are as follows:
£m 2024 2023
Net operating lease charges 365 326
In the year ended 31 August 2020, the Group adopted IFRS 16. IFRS 16 requires lessees to account for all leases under a
single on-balance sheet model as the distinction between operating and finance leases is removed. In order to provide
comparable information the Group has chosen to present Headline measures of operating profit and profit before tax,
asexplained in Note 2 Segmental analysis of results.
The table above presents the pre-IFRS 16 net operating lease charges, applying the principles of IAS 17, and Group
accounting policies as applicable prior to 1 September 2019, as described in the Glossary on page 173.
The Group leases various properties under non-cancellable operating lease agreements. The leases have varying terms,
escalation clauses and renewal rights. The Group has a number of lease arrangements in which the rent payable is
contingent on revenue. Contingent rentals payable, based on store revenues, are accrued in line with revenues generated.
The average remaining lease length across the Group is four years.
Rentals payable and receivable under operating leases are charged to the income statement on a straight-line basis over
the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also
spread on a straight-line basis over the lease term.
WH Smith PLC Annual Report and Accounts 2024
181
Strategic report Corporate governance Financial statements Additional information
Information for shareholders
Company Secretary and registered office
Ian Houghton, WH Smith PLC, Greenbridge Road, Swindon, Wiltshire SN3 3RX. Telephone 01793 616161.
WH Smith PLC is registered in England and Wales (number 5202036).
Company website
This Annual report and accounts together with other information, including the price of the Company’s shares,
Stock Exchange announcements and frequently asked questions, can be found on the WH Smith PLC website
atwhsmithplc.co.uk.
Annual General Meeting
The Annual General Meeting will be held at the offices of Herbert Smith Freehills LLP, Exchange House, Primrose Street,
London EC2A 2EG on Wednesday 29 January 2025 at 9.30am. A separate notice convening the meeting is being sent to
shareholders and includes explanatory notes on each of the resolutions being proposed.
Shareholder enquiries – the registrars
All enquiries relating to shareholdings should be addressed to the registrars, Computershare Investor Services PLC,
ThePavilions, Bridgwater Road, Bristol BS99 6ZZ. You can call the registrars on the shareholder helpline 0371 495 0100
orvisit their website at www.investorcentre.co.uk.
Sharedealing services
This can be done through a stockbroker, bank or building society.
Computershare, our registrars, also offer share dealing services for shareholders (in certain jurisdictions). For internet
dealing, log on to computershare.com/dealing/uk and for telephone dealing call 0370 703 0084. You will need to have
your Shareholder Reference Number (“SRN”) to hand when making this call. This can be found on your Form of Proxy
oremail notification of availability of AGM documents.
Please note that dealing fees will apply and will vary between providers.
Dividend mandates
If you wish dividends to be paid directly into your bank account through the BACSTEL-IP (Bankers’ Automated
Clearing Services) system, you should contact Computershare for a Dividend Mandate Form or apply online at
www.investorcentre.co.uk. Shareholders who receive their dividend payments in this way receive an annual dividend
confirmation once a year, with the final dividend, detailing all payments made throughout the UK tax year.
Financial calendar
The following dates are given for information purposes only. Please check the WH Smith PLC website at whsmithplc.co.uk
nearer the relevant time for full details, and to ensure that no changes have been made.
Financial year end 31 August 2024
Preliminary results announced 14 November 2024
Annual report posted December 2024
Final dividend ex-dividend date 16 January 2025
Final dividend record date 17 January 2025
AGM 29 January 2025
AGM trading update 29 January 2025
Final dividend payment date 6 February 2025
Half-year end 28 February 2025
Interim results announced April 2025
Trading statement June 2025
Interim dividend ex-dividend date July 2025
Interim dividend record date July 2025
Interim dividend payment date August 2025
Financial year end 31 August 2025
182
WH Smith PLC Annual Report and Accounts 2024
Additional information
ShareGIFT
If you only have a small number of shares which are uneconomic to sell, you may wish to consider donating them to
charity under ShareGIFT, a charity share donation scheme administered by the Orr Mackintosh Foundation. A ShareGIFT
transfer form may be obtained from our registrar. Further information about the scheme can be found on the ShareGIFT
website at sharegift.org.
Warning to shareholders – boiler room scams
In recent years, many companies have become aware that their shareholders have received unsolicited phone calls
or correspondence concerning investment matters. These are typically from overseas-based “brokers” who target
UK shareholders, offering to sell them what often turn out to be worthless or high risk shares in US or UK investments.
These operations are commonly known as “boiler rooms”. Information on how to avoid share fraud or report a scam
can be found on our website at whsmithplc.co.uk. You can also call the Financial Conduct Authority Consumer Helpline
on 0800 111 6768 or go to fca.org.uk/scamsmart.
UK Capital Gains Tax
Demerger 31 August 2006
Following the demerger of the Company on 31 August 2006, in order to calculate any chargeable gains or losses arising on
the disposal of shares after 31 August 2006, the original tax base cost of your ordinary shares of 2
13
⁄
81
p (adjusted if you held
your shares on 24 September 2004 and 22 May 1998 to take into account the capital reorganisations of 27 September 2004
and 26 May 1998 respectively (see below)) will have to be apportioned between the shareholdings of ordinary shares of 20p
in the Company and ordinary shares of 5p in Smiths News PLC.
The cost of your shareholding of ordinary shares of 20p in the Company is calculated by multiplying the original base
cost of your ordinary shares of 2
13
⁄
81
p (adjusted where necessary to take into account the capital reorganisations of
27 September 2004 and 26 May 1998 (see below)) by 0.69585.
The cost of your shareholding of ordinary shares of 5p is calculated by multiplying the original base cost of your ordinary
shares of 2
13
⁄
81
p (adjusted where necessary to take into account the capital reorganisations of 27 September 2004 and
26 May 1998 (see below)) by 0.30415.
As a result of the share consolidation on 22 February 2008, the nominal value of the Company’s ordinary shares
increased from 20p per ordinary share to 22
6
⁄
67
p per ordinary share.
Capital reorganisation 27 September 2004
If you acquired your shareholding on or before 24 September 2004, in order to calculate any chargeable gains or losses
arising on the disposal of shares after 24 September, the original tax base cost of your ordinary shares of 55
5
⁄
9
p (adjusted
if you held your shares on 22 May 1998 to take into account the capital reorganisation of 26 May 1998 (see below))
will have to be apportioned between the shareholdings of ordinary shares of 2
13
⁄
81
p and “C” shares resulting from the
capital reorganisation.
The cost of your shareholding of ordinary shares of 2
13
⁄
81
p is calculated by multiplying the original base cost of your
ordinaryshares of 55
5
⁄
9
p (adjusted where necessary to take into account the capital reorganisation of 26 May 1998
(seebelow)) by 0.73979.
Capital reorganisation 26 May 1998
If you acquired your shareholding on or before 22 May 1998, in order to calculate any chargeable gains or losses arising
on the disposal of shares after 22 May 1998, the original tax base cost of your ordinary shares of 50p will have to be
apportioned between the shareholdings of ordinary shares of 55
5
⁄
9
p and redeemable “B” shares resulting from the
capital reorganisation.
The cost of your shareholding of ordinary shares of 55
5
⁄
9
p is calculated by multiplying the original cost of your ordinary
shares of 50p by 0.90714.
WH Smith PLC Annual Report and Accounts 2024
183
Strategic report Corporate governance Financial statements Additional information
March 1982 values
If you acquired your shareholding on or before 31 March 1982, in order to calculate any chargeable gains or losses arising
on disposal of shares, the tax base cost of your ordinary shares used the 31 March 1982 base values per share as follows:
“A” ordinary
shares
Arising from an original
shareholdingof “B” ordinary shares
Ordinary shares of 20p 61.62p 50.92p
Smiths News PLC ordinary shares of 5p 26.93p 22.25p
If you have a complicated tax position, or are otherwise in doubt about your tax circumstances, or if you are subject to tax
in a jurisdiction other than the UK, you should consult your professional adviser.
“Company” means WH Smith PLC, a public limited company incorporated in England and Wales with registered
number 5202036; and “Group” means the Company and its subsidiaries and subsidiary undertakings.
Information for shareholders continued
184
WH Smith PLC Annual Report and Accounts 2024
Additional information
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Contact details
WH Smith PLC
Greenbridge Road
Swindon, Wiltshire SN3 3RX
United Kingdom
T 01793 616161
W whsmithplc.co.uk
WHSmith Travel
Aldgate Tower
2 Leman Street
London E1 8FA
United Kingdom
W whsmithplc.co.uk
WHSmith High Street
Greenbridge Road
Swindon, Wiltshire SN3 3LD
United Kingdom
T 01793 616161
W whsmith.co.uk
Investor Relations
W whsmithplc.co.uk/investors
Media Relations
W whsmithplc.co.uk/media
Sustainability
W whsmithplc.co.uk/sustainability
Recruitment
W whsmithcareers.co.uk
Customer Service
Freepost SCE4410
Swindon, Wiltshire SN3 3XS
United Kingdom
E customer.relations@whsmith.co.uk