Shares in WH Smith PLC (LSE:SMWH) fell 13.4% to 544.5p after the airports and railway stations retailer reported a sharp drop in profits and suspended its dividend, despite higher revenues in the first half.
Headline profit before tax plunged 85% to £3 million, down from £21 million a year earlier, as revenue swelled 5% to £748 million, driven by stronger performance in North America and other international markets.
On a statutory basis, trading profit declined to £38 million from £40 million, while group pre-tax losses increased to £25 million from £4 million.
Profitability was hit by disruption from refurbishments at major airport stores, inflationary pressures and weaker performance in parts of the business.
The board, headed by new executive chair Leo Quinn, who joined earlier this month, suspended the dividend to try and reduce debt and strengthen the balance sheet.
"The immediate focus is to restore confidence and ensure the right foundations are in place to support profitable growth and long‑term value creation," said Quinn.
He said management will have "a relentless focus on driving cash, cost discipline and strengthening the balance sheet".
Full-year guidance was given for a profit before tax of £90 million to £105 million, but a cautious tone was struck due to geopolitical uncertainty and its potential impact on passenger numbers and consumer confidence.
The update comes ahead of the key summer trading period, with the company warning that conditions remain uncertain despite recent investment in new airport flagship stores.
"While the near-term outlook is uncertain, I am confident that, with the right focus and discipline, the business can deliver superior returns for the benefit of our colleagues, partners and shareholders over the longer-term," Quinn said.