FTSE 250 movers: WH Smith slides on results; Carnival steams ahead

(Sharecast News) - FTSE 250: 22,308.96 down 16.63 (-0.07%) WH Smith lost ground as it said the Financial Conduct Authority has begun an investigation into the group after accounting failures in its US operations and after it reported a drop in full-year profit before tax and non-underlying items to £108m from £114m.

The company also said it was looking to recover overpaid bonuses from former executive directors following the restatement of profits in the 2023 and 2024 financial years.

Richard Hunter, head of markets at Interactive Investor, said: "The lack of a bounce to the update, when perhaps the bad news should already have been factored in, is proof if it were needed that investor confidence is sorely lacking. The decline follows a precipitous drop when the North American issue was announced, with the shares 37% down since the announcement and 42% lighter over the last year, as compared to a gain of 9.4% for the wider FTSE250.

"The slump has also prevented the group from recapturing its pre-pandemic glories, instead of which the share price is 74% lower than the levels of December 2019. With so much investor confidence damage to repair, a market consensus which has reduced from a previous buy to stand at a hold for the time being is of little surprise."

Retail shares were down in general after data released earlier by the Office for National Statistics showed that retail sales softened in November, undershooting expectations for a small rise, after Black Friday failed to bolster demand.

Retail sales volumes were estimated to have fallen by 0.1% on a seasonally-adjusted basis, following an upwardly revised fall of 0.9% in October. Analysts had been expecting a 0.4% uplift.

In the three months to November, sales rose 0.6%, boosted by strong performances from both clothing shops and computer and telecommunication retailers. However, the three-month rise was below expectations, for a 0.9% increase.

Seasonally-adjusted figures strip out the effect of Black Friday, which this year was on 28 November; last year it fell into the ONS's December reporting period.

On a non-seasonally adjusted basis, sales volumes jumped 11.9%, compared with a 4.4% rise in October.

The ONS said data suggested that the Black Friday effect was "slightly weaker than usual" this year.

The news hit Currys, Dr Martens, B&M and Ocado.

Shares in Carnival surged on Friday as the cruise line operator reinstated dividend payments and reported a jump in annual profits.

Pre-tax profit for the year to November 30 soared 45% to a record $2.77bn. Net income rose 44% to $2.76bn and 63% on an adjusted basis to $3.08bn. The company expects 2026 adjusted net income to grow by 12%.

Revenue rose 6.4% to $26.62bn - also a record and a quarterly payout of 15 cents a share was declared.

Chief Financial Officer David Bernstein said: "We have reached a meaningful turning point, surpassing the investment grade leverage metric threshold with a net debt to adjusted earnings before interest, tax, depreciation and amortisation ratio of 3.4x for 2025, representing a nearly one turn improvement from 2024 and successfully completing our $19bn refinancing plan in less than a year.

"These efforts strengthened our balance sheet by simplifying our capital structure, reducing interest expense and debt, optimizing our future debt maturities and enhancing our financial flexibility. In total, we have reduced our debt by over $10bn since our peak less than three years ago."

"These efforts and our strong continued operating performance, resulted in multiple credit rating upgrades throughout the year, culminating in reaching investment grade with Fitch and being one notch away with a positive outlook from S&P."