WH Smith, the British newspaper, book and music retailing group reports a £300 million sterling plunge into the red - its first ever recorded loss. Pre tax profits - of £101 million in 1995 became losses of £197 million for the year to June 1996, according to results issued yesterday.

Chief executive Mr Bill Cockburn who is staging a complete review of the groups businesses says that the group is unlikely to fully recover before the turn of the century.

Prime culprit in the profits collapse is the sell off of poorly performing subsidiaries including Paperchase, the DIY chain Do It All and the WH Business Supplies company. Although the sell offs raised about £86 million, this gave rise to a loss of £6.3 million after netting off their book value. A further £145 million of goodwill attributable to the businesses, previously written off against reserves, was charged to the profit and loss account.

Staff redundancies, fixed assets and stock write offs took the exceptional losses to £283 million before tax credits. On the group's core businesses, WH Smith Retail operating profits declined to £47 million against £65 million for the 1995 period. Mr Cockburn partly blames a shortage of quality music and video releases for the period. At the trading level pre tax profits for the group were £99 million compared with £115 for the previous year.