RNS Number : 1855P
TheWorks.co.uk PLC
21 May 2024

21 May 2024

TheWorks.co.uk plc

("The Works", the "Company" or the "Group")

Trading update for the 53 weeks ended 5 May 2024

FY24 and FY25 guidance maintained

TheWorks.co.uk plc, the family-friendly value retailer of arts, crafts, toys, books and stationery, announces a trading update for the 53 weeks ended 5 May 2024 (the "Period" or "FY24") (1).

FY24 overview


Total revenue growth of 0.9% to £282.6m in FY24 (FY23: £280.1m) and total LFL sales decline of 0.9%.


Expect to report pre IFRS 16 Adjusted EBITDA of approximately £6m in FY24 and deliver £8.5m in FY25, in line with market forecasts.


Medium term ambition is to return to pre IFRS 16 EBITDA margins of 5%.


During the year we improved the overall quality and profitability of our store portfolio, with 9 new store openings, 24 closures, 5 relocations and 21 store refits. We traded from 511 stores at the year end, of which over 96% are profitable. Our store estate represents c.90% of sales and delivered positive LFLs in the year.

In January, we announced the business had pivoted to focus on stabilising profitability by improving margins and reducing costs. We are pleased to report that we have made significant progress as follows:  


Transferred The Works from its Main Market listing to AIM, which has a more flexible regulatory environment and will result in a significantly lower audit fee.


Moved our online fulfilment centre (operated by a third-party provider) to a more efficient facility.


Ended our loyalty scheme to focus instead on maintaining everyday affordable prices - the most important thing to our customers.


Improved product margins through negotiations with suppliers and optimised promotional activity.


Made changes in our Distribution Centre and store labour model, which are expected to drive significant efficiencies.


Negotiating rent savings with landlords, particularly for marginal and loss-making stores with leases up for renewal.


Restructured our Operational Board to give us a more agile and focused leadership team.


Most of the benefits from this activity are expected in FY25, but already started to deliver improved margins and lower costs in Q4 of FY24. As a result, the Board's expectation for FY24 (pre IFRS 16 Adjusted EBITDA of approximately £6.0m) remains unchanged.

Financial position

The Group ended the Period with net cash (2) of £1.6m (the 52-week period ended with net cash of £6.5m, which compares to net cash of £10.2m at the end of FY23). The Works continues to have an RCF of £20.0m, which provides ample liquidity and is utilised to support the build of stock prior to peak trading.


Our expectation for FY25 is to deliver stable sales. We are confident that the action taken to reduce costs and improve margins will offset the significant cost headwinds we face, including National Living Wage, higher freight costs (3) and business rates. We therefore expect to deliver an improved pre IFRS 16 Adjusted EBITDA of approximately £8.5m in FY25. Over the medium term our ambition is to return to pre IFRS 16 EBITDA margins of 5%.

Gavin Peck, Chief Executive Officer of The Works, commented:

"We are pleased to have finished FY24 in line with market expectations, which reflects action taken to reset our cost base and improve margins, supported by improving store sales in the final quarter. Significant changes implemented across the business make us well-placed to offset cost headwinds and we expect to return to profit growth in FY25. In a year of considerable change at The Works I am incredibly grateful to our colleagues for their ongoing dedication to our business and to our customers."

Publication of FY24 results and change of auditor

Following our move to AIM, we are pleased to announce that we have appointed Kreston Reeves LLP as our external auditor. To provide Kreston Reeves with sufficient time to complete their first year audit work, the FY24 results are expected to be announced on Tuesday 1st October 2024.




TheWorks.co.uk plc

Gavin Peck        CEO

Rosie Fordham  CFO





via Sanctuary Counsel

Singer Capital Markets (Nomad and Broker)

Peter Steel

Alaina Wong

Jalini Kalaravy

020 7496 3000

Sanctuary Counsel

Ben Ullmann

Rachel Miller

Kitty Ryder



0207 340 0395




The FY24 annual report and accounts for the Group will cover the 53-week period ended 5 May 2024, compared to a 52-week period ended 30 April 2023 in FY23.


Net cash at bank excluding finance leases, and on a pre IFRS 16 basis.


Due to ongoing supply chain disruption in the Red Sea.


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