The Works has reported stable sales but a decline in annual profits, navigating a difficult consumer environment with optimism for the festive season.
- Profitability decreased as adjusted EBITDA reduced from £9m to £6m due to challenging Christmas trading and rising costs.
- Strategic steps to enhance product margins and cut costs have positioned the company for expected EBITDA improvement in FY25 to £8.5m.
- Sales showed a modest increase of 0.9% to £282.6m, with a dip of 0.9% in like-for-like sales.
- Store sales accounted for 90% of revenue, slightly increasing by 0.6%, while online sales dropped by 12.4%.
The Works, a well-known value retailer, faces a competitive retail market, with sales remaining flat and a drop in annual profits as reported for the last financial year. Despite these financial challenges, it remains optimistic as it approaches the Christmas peak period.
In the financial year ending 5 May, The Works saw its adjusted EBITDA fall from £9 million to £6 million. This decline was largely attributed to difficult trading conditions during the Christmas period and increased operational costs.
Despite the financial setbacks, management has implemented strategic initiatives aimed at enhancing product margins and reducing costs, with the expectation to boost profitability. Forecasts set the adjusted EBITDA at £8.5 million for the upcoming financial year, showing a positive outlook as the Christmas trading season approaches.
Overall sales edged up by 0.9% to reach £282.6 million. However, like-for-like sales experienced a slight dip of 0.9%, indicating challenges in maintaining comparable store productivity.
Store sales, which form the majority of the company’s revenue base, saw a modest increase of 0.6%. In contrast, online sales showed a significant decline of 12.4%, underlining the challenges faced in digital market arenas.
The company’s CEO, Gavin Peck, is confident about the company’s strategic direction, reflecting on the progress made despite a tough consumer environment. Peck acknowledged the strategic evolutions necessary to transform the business and enhance shareholder returns.
Further changes in the company’s governance included the resignation of two representatives from The Works’ shareholder, Kelso Group, who had been appointed to guide the business through transitional periods. With notable progress, they expressed confidence in the current leadership team.
With these strategic and operational changes, The Works is gearing up for the Christmas season, focusing on delivering quality consumer experiences and driving sales to ensure a prosperous period.
The Works remains focused on strategic improvements and operational effectiveness to boost growth despite recent challenges, aiming for a successful Christmas trading period.
