WH Smith

WH Smith Dividend Analysis and Summary

• Dividend declared: Final dividend of 6.0p per share for FY25 (year ended 31 Aug 2025).
• Full-year dividend: 17.3p per share (rebased to continuing business earnings).
• Policy: Maintain dividend cover of ~2.5x based on continuing earnings.
• Headline diluted EPS (continuing, pre non-underlying): 43.4p (c.2.5x cover of the full-year dividend).
• Record date: 23/01/2026 (close of business).
• Ex-dividend date: 22/01/2026 (derived as one business day before the record date).
• Payment date: 12/02/2026.
• Cash cost: Final dividend c.£8m; FY25 total dividend cash cost c.£22m (interim 11.3p already paid, £14m).
• Subject to shareholder approval.

• Coverage: FY25 headline EPS of 43.4p vs FY dividend 17.3p implies coverage of ~2.5x, in line with policy.
• Cash generation: Continuing free cash flow of £63m covers the FY25 dividend outlay (~£22m) with headroom; however FY26 guidance implies continued investment and some cash headwinds (working capital unwind c.£10m, capex ~£90m, non-underlying £20–30m).
• Balance sheet/leverage: Headline net debt £390m, leverage 2.1x EBITDA (target <2.0x). Policy indicates priority to reduce leverage before considering excess returns beyond the ordinary dividend.
• Earnings outlook: FY26 headline PBT guidance £100–115m; divisional margin guidance suggests near-term UK margin dilution (investment/disruption) and NA rebuilding (target margin 7–8%). Dividend growth likely to be measured until margins and leverage improve.
• Rebase context: FY25 dividend rebased down (from FY24’s higher level) to reflect exit of non-travel businesses; current payout appears aligned to sustainable continuing earnings.