WH Smith is seeking to raise more than £120m in a bid to combat falling airport sales caused by the Iran war.

The stationery chain announced the capital raise alongside a fresh profit warning on Tuesday, which bosses blamed on flight cancellations and a drop in passenger numbers.

It said it was attempting to strengthen its balance sheet by issuing 26 million new shares, or roughly 20pc of its existing share capital.

This is aimed at raising at least £120m after WH Smith slashed its expectations for full-year profit to between £75m and £90m, down from previous forecasts of between £100m and £115m. It is the company’s second profit downgrade this year.

WH Smith shares sank by more than 15pc in the wake of the announcement.

Bosses said the revised forecasts reflected an anticipated decline in passenger numbers as the outbreak of war in Iran had triggered scores of flight cancellations in the Middle East.

WH Smith has sought to focus entirely on stores within airports and railway stations by selling off its high-street shops to private-equity firm Modella Capital last year. These stores have since been rebranded as TG Jones.

WH Smith said its like-for-like revenue in the UK grew by 2pc in the past 14 weeks, with growth in its hospital sites offsetting the decline at airports.

North American sales were down 1pc, with the retailer’s resorts business dented by a fall in visitor numbers to Las Vegas.

The chain has begun selling or renegotiating loss-making sites to help shore up its finances, while it is replacing directly-run operations with franchises in smaller markets.

WH Smith warned it expected to take a £150m hit from closures of its InMotion electronics stores in the US.

The fresh fundraising caps off a tumultuous period for the retailer, which is still reeling from the fallout of an accounting scandal last year.

Almost £500m was wiped off WH Smith’s market value after it admitted to having overstated profits in its North American business by tens of millions of pounds because of an accounting error.

The saga led to the resignation of Carl Cowling, the chief executive, while the company said it would claw back up to £7m in “overpaid” bonuses to top bosses.

WH Smith is under investigation by the Financial Conduct Authority, which is assessing whether the business breached UK listing and transparency rules.

Britain’s audit watchdog also opened an investigation into PwC this week over its role in the blunder.

Leo Quinn, the executive chairman of WH Smith, said: “There is no doubt that current economic uncertainty and its effect on consumer appetite for spending has created headwinds. In this environment, sorting legacy issues while investing in the core model requires the financial flexibility of a stronger balance sheet in lock-step with self-help.

“This placing is a prudent and proactive step to accelerate our transformation of what is, at heart, a good business with some great people and clear opportunity for profitable growth.”

WH Smith’s largest shareholder, Causeway Capital Management, has said it will take part in the capital raise, while directors including the executive chairman and chief financial officer will contribute around £1.7m.