TheWorks.co.uk PLC Half Year Trading Update (6135S)
07 Novembre 2019 - 8:01AM
UK Regulatory
TIDMWRKS
RNS Number : 6135S
TheWorks.co.uk PLC
07 November 2019
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the EU Market Abuse Regulation (596/2014). Upon the publication of
the announcement via a regulatory information service, this
information is considered to be in the public domain.
7 November 2019
TheWorks.co.uk plc
("The Works" or the "Company")
Half Year Trading Update
TheWorks.co.uk plc, the multi-channel value retailer of gifts,
arts, crafts, toys, books and stationery, announces today a trading
update covering the 26-week period to 27 October 2019 (the
"Period").
Total revenue increased by 5.4% year-on-year, and when excluding
the impact of the prior year Mega Trend[1], LFL sales[2] were
-1.9%. This performance reflected the difficult consumer backdrop
over the Period. When including the prior year Mega Trend LFL sales
were -3.6%.
Against the challenging consumer backdrop, the Company undertook
increased promotional activity during the Period and also increased
its focus on costs. This included driving increased efficiencies
through its retail distribution centre, delivering further property
cost savings and carefully managing discretionary costs.
The Works heads into its peak trading period with confidence in
its Christmas offering, which includes an extensive range of new
products, such as Frozen 2 merchandise, available at outstanding
value. A number of other propositional improvements undertaken in
the first half and softening comparators are expected to support
LFL improvement in the second half of the year.
As previously highlighted, the current high street environment
creates opportunities, with the structural shift in the retail
sector resulting in a strong pipeline of affordable, good quality
retail space. Amid this context, the Company's successful store
roll out strategy is progressing well, with a net 28 store openings
in the first half of the year. The Company remains on track to
deliver a net 50 new store openings for the full year. The new
store openings continue to deliver a strong payback performance of
around a year.
Outlook
Whilst LFL sales have improved over recent weeks, as the impact
of the prior year's Mega Trend eases, they were not at a level
previously expected. Accordingly, the Company is taking a more
cautious view on trading ahead of the Christmas trading period and,
as such, the Board now expects full year profit before tax to be
significantly below current market expectations.
Kevin Keaney, Chief Executive Officer of The Works,
commented:
"The consumer environment has remained challenging and we have
been trading against strong comparators given last year's Mega
Trend. We have responded decisively to minimise the impact to our
performance and are benefiting from easier comparators in the
second half. We now look ahead to the busy Christmas period fully
prepared and ready to deliver for our customers with a fantastic
selection of good quality and great value products. Notwithstanding
the current backdrop, we remain confident in our medium-term growth
opportunities and we continue to invest to unlock them."
Results for the first half of 2020 and an update on Christmas
trading will be announced on 16 January 2020.
Enquiries:
TheWorks.co.uk plc via Teneo
Kevin Keaney, CEO
Gavin Peck, CFO
Teneo
Ben Foster, Haya Herbert-Burns,
Rachel Miller +44 20 7420 3190
Notes to Editors:
TheWorks.co.uk plc is a multi-channel value retailer of gifts,
arts, crafts, toys, books and stationery - offering customers a
differentiated proposition as a value alternative to full price
specialist retailers. The Works sells its quality products at
affordable prices across four product zones comprising Kids; Arts,
Craft & Hobbies; Stationery; and Family Gifts, which are
supplemented by both seasonal and regional offerings.
As at 27 October 2019, the Group operated a network of 525
stores in the UK and Ireland. Stores can be found on high streets,
in retail parks, shopping centres, factory outlets and as
concessions in various locations. The Works also has a significant
online presence that enables customers to shop any time of the day,
with an extended range of products not available in stores. This
multi-channel offering is one of the first of its kind in the value
retail sector and includes a popular Click & Collect service,
driving additional footfall and sales in store.
[1] Mega Trends are defined as any individual product, or
collection of products, for which sales exceed 3 per cent. of
weekly sales for a temporary period and for which management deem
to be material in terms of impacting on the underlying performance
of the Company. For the comparable period, namely half year 2018,
'Squishies' were a Mega Trend.
[2] LFL sales are defined as the year-on-year growth in gross
sales from stores which have been opened for a full 63 weeks (but
excluding sales from stores closed for all or part of the relevant
period or prior year comparable period), and from its e-Commerce
platform, calculated on a calendar week basis.
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END
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