WH Smith accounting blunder delays Greggs board appointment

Robert Moorhead, former finance chief of WH Smith, has postponed his planned move to join the board of Greggs amid an ongoing investigation into an accounting mistake at his previous employer. Moorhead, who left WH Smith last year after more than two decades at the helm of its finances, was due to step into the role of non-executive director and chair of the audit committee at Greggs on 1 October.

A brief statement released on the London Stock Exchange confirmed the deferral. The company noted that Moorhead had requested his appointment be delayed until the completion of a Deloitte-led review into the financial oversight at WH Smith. The error, detailed last week, saw nearly £600 million wiped off WH Smith’s stock market value, as the firm admitted to an estimated £30 million overstatement of its headline annual profit.

The discrepancy has its roots in the accelerated recognition of supplier income in WH Smith’s US business, essentially booking anticipated profits ahead of time. The matter immediately brought to mind the infamous Tesco accounting scandal of 2014, which saw profits overstated by £250 million and required a lengthy Deloitte investigation. That high-profile blunder led to sweeping reforms in company accounting procedures across the sector.

WH Smith has made its US operations a central part of its transition to a travel retail focus, following the recent sale of its historic high street division. The miscalculation in the United States threatens to cloud this strategic pivot, given the pivotal role of its American arm—acquired in 2018 with the purchase of InMotion for around $400 million.

Despite the turbulence, shares in WH Smith closed up 2.5 per cent on Thursday, indicating some retained investor confidence. Greggs, meanwhile, was swift to assure stakeholders that Kate Ferry will remain as a non-executive director and chair of the audit committee while the review is under way.

The incident underscores the critical importance of robust financial controls and transparency in today’s competitive retail market. As the investigation proceeds, further details on the nature and wider implications of the accounting issue at WH Smith are expected to emerge.