*

Audit shows premature recognition of supplier income

*

Shares have fallen 47% since August after accounting

issues

*

CEO Carl Cowling exits, Andrew Harrison named interim CEO

*

North America 2025 profit forecast cut to 5-15 million

pounds

(Adds details on review, WH Smith ( WHTPF ) leadership, shares)

By Raechel Thankam Job and Yadarisa Shabong

Nov 19 (Reuters) - Britain's WH Smith ( WHTPF ) said on

Wednesday that Carl Cowling had stepped down as CEO after an

independent review revealed accounting failures in the travel

retailer's U.S. operations, prompting it to cut its profit

forecast.

Andrew Harrison, head of WH Smith's ( WHTPF ) UK division, will act as

interim CEO while the board looks for Cowling's replacement.

Shares in WH Smith ( WHTPF ) fell about 2%, taking losses to 47% since the

accounting issues surfaced in August.

WH Smith ( WHTPF ) enlisted Deloitte to review its accounts in August

after an internal evaluation revealed earnings had been

overstated at its second-largest division.

Deloitte found WH Smith's ( WHTPF ) North America division had been

recognising supplier income - payments from vendors for

promotional and marketing support - earlier than it should have,

and that some 20 million pounds ($26 million) would be deferred.

"This is an extremely serious matter that has had the

Board's full attention, and we sincerely apologise for the

shortcomings identified," WH Smith Chair Annette Court said,

adding the priority was to rebuild trust and to improve

profitability of the division.

During Cowling's six years as CEO, WH Smith ( WHTPF ) became a

pure-play travel retailer after selling its UK high street

business in June. It pursued rapid expansion in North America,

which contributed about 20% of group revenue in fiscal 2024.

NORTH AMERICA LEADERSHIP REVIEW

The review also identified weaknesses in the composition of

the North America finance team, WH Smith ( WHTPF ) said, along with

insufficient systems, controls and review procedures.

WH Smith ( WHTPF ) said it was reviewing the leadership of the North

America business, where Huw Crwys-Williams was appointed as CEO

less than five months ago.

It now expects group headline trading profit for fiscal 2025

of between 100 million pounds and 110 million pounds, down

nearly 55% from last year.

Profit in North America is expected to fall to between 5

million pounds and 15 million pounds, sharply lower than the 25

million pounds it expected previously.

($1 = 0.7613 pounds)