TheWorks.co.uk PLC Full Year Trading Update (7908Z)
18 Maggio 2023 - 8:00AM
UK Regulatory
TIDMWRKS
RNS Number : 7908Z
TheWorks.co.uk PLC
18 May 2023
18 May 2023
TheWorks.co.uk plc
("The Works", the "Company" or the "Group")
Trading update for the 52 weeks ended 30 April 2023
Robust sales growth in FY23; Adjusted EBITDA expected to be in
line with market forecast; ended the year in a strong financial
position.
TheWorks.co.uk plc, the family-friendly value retailer of arts,
crafts, toys, books and stationery, announces a trading update for
the 52 weeks ended 30 April 2023 (the "Period" or "FY23").
Trading performance
The Works delivered a resilient performance in FY23 against a
challenging backdrop, with total sales(1) increasing by 6.1 % to
GBP316.6m (FY22: GBP298.4m). Stores, which represented 88.8% of
total sales, delivered an LFL sales increase of 7.5 %. Online sales
declined by 15.0%, resulting in overall LFL sales growth of
4.2%.
Trading since the previous update(2) has been broadly as
anticipated, with stores continuing to deliver positive LFL sales
growth and online LFLs being negative. Store LFL sales increased by
12.1% over the 15 weeks, and online sales declined by 12.5%, giving
an overall LFL increase of 9.3% during this period. The FY22
comparatives weakened in April 2023, due to the aftermath of the
March 2022 cyber security incident, which is reflected in the
slight increase in the recent rate of sales growth.
The Company expects to report an Adjusted EBITDA result for FY23
in line with its compiled estimate of the market's forecast, which
is approximately GBP9.0m.
Financial position
The Group ended the Period in a strong financial position, with
net cash(3) of GBP10.2m (FY22: GBP16.3m). As previously noted, the
FY22 comparative included higher than normal creditor balances,
which unwound as expected during FY23. At the Period end the Group
had liquidity availability of GBP40m, including its undrawn
GBP30.0m bank facility(4) .
Dividend and publication of results
As noted in the interim results report issued in January 2023,
the Board will consider the level of dividend for FY23 alongside
completion of the audited final results, which will be announced on
Friday 21 July 2023.
Outlook
Notwithstanding the ongoing challenging market conditions, the
Board remains confident in the future prospects of the business due
to the underlying appeal and relevance of The Works' proposition,
the opportunity to grow sales profitably through the implementation
of its strategy , and the Group's strong financial position. The
Board notes that the compiled estimate of the market's forecast for
FY24 is an Adjusted EBITDA of approximately GBP10.0m, which it is
comfortable with at the present time.
Appointment of broker
The Group is pleased to announce that Singer Capital Markets has
been appointed as the Company's sole corporate broker with
immediate effect.
Gavin Peck, Chief Executive Officer of The Works, commented:
"Our performance in FY23 was delivered against a challenging
backdrop. The business traded well through difficult external
conditions, most notably the inflationary environment, and the
recovery from the cyber security incident at the start of the year.
The store performance was strong throughout the period,
demonstrating the enduring value of our store network in
communities across the UK and Ireland. Online sales continued to
lag behind, partially reflecting the normalisation trend seen more
widely. We delivered good strategic progress in the second half of
FY23 and have now laid the foundations to continue on this
trajectory in the year ahead . This progress is testament to the
passion and commitment of our brilliant colleagues, who continue to
go above and beyond to deliver for our customers."
Enquiries: via Sanctuary
Counsel
TheWorks.co.uk
plc
Gavin Peck CEO
Steve Alldridge
CFO
Sanctuary Counsel 0207 340 0395 theworks@sanctuarycounsel.com
Ben Ullmann
Rachel Miller
Kitty Ryder
(1) "Total sales" include VAT and are stated prior to deducting the cost of loyalty points which
are excluded from statutory revenue. A reconciliation between total sales and statutory revenue
will be included in the Group's Annual Report.
(2) i.e. during the 15 week period from Monday 16 January 2023 to Sunday 30 April 2023.
(3) Net cash at bank excluding finance leases, and on a non-IFRS 16 basis.
(4) The Group's bank facility at the Period end comprised a committed RCF of GBP30.0m with an
expiry date of 30 November 2025.
The Group is in discussions with its bank (HSBC) about reducing the size of the facility,
which was undrawn throughout most of FY23, to GBP20.0m, and extending its term so that it
would expire instead on 30 November 2026. This would save approximately GBP0.15m in annual
cash interest costs, and would continue to provide liquidity availability significantly in
excess of the actual anticipated requirement.
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END
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