Revenues at The Works increase as store sales strengthen

Revenues at books, stationery, craft and toy retailer The Works increased 5.8% in the 52 weeks ended 30th April 2023, up from £264.6m in the comparable period prior to £280.1m.

Its full-year financial results also revealed like-for-like store sales (representing 88% of total sales) “strengthened as the year progressed”, increasing 7.5% over the period. Online sales declined, however, by 15%, resulting in overall like-for-like sales growth of 4.2%.

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) decreased from £16.6m last year to £9m.

Gavin Peck, chief executive officer of The Works, described the results as a “resilient performance”, achieved “despite facing some sizable challenges". He said revenue growth was driven by The Works’ strong portfolio of stores, and “bolstered by the sector-wide shift of customers returning to shop in-store post-Covid-19”.

He continued: “Although inflationary pressures increased business costs and dampened consumer confidence, we ended the year in line with our rebased expectations. [The results showcase] the enduring appeal of our value proposition.In the first half our focus was on protecting and rebuilding the business, but as the year progressed we were able to make more strategic progress.

“We have developed our brand and customer proposition, ensured that our ranging is aligned with customer demand and improved our store estate. We’ve also taken steps to enhance our online proposition and drive significant operational improvements across the business, the benefits of which we expect to be fully realised from the [rest of the financial year] onwards.”

Looking ahead, Peck said the macroeconomic environment "remains uncertain". "However, we are now well positioned to capitalise on strategic opportunities and given the momentum gained in the latter half of the 2023 financial year we expect to grow sales and profit in the 2024 financial year," he said. Peck thanked staff for demonstrating their “ongoing dedication to The Works” and who have “continued to show customers how they can read, learn, create and play more on a budget”.

The company also announced c.f.o. Steve Alldridge will step down at the end of 2023, with colleague Rosie Fordham, currently head of finance, replacing him. Allridge joined The Works in June 2020 as interim c.f.o., a position that was made permanent in May 2021, and has “made a significant contribution to The Works over the last three years”, the company said.

Fordham joined in 2019 and has worked as both head of finance and interim c.f.o. She has over 15 years’ commercial and finance experience in PLCs, having previously worked at National Grid and Spirit Pub Company and qualified as a chartered accountant at PwC.

“Rosie’s transition to the role of c.f.o. aligns with the board’s succession plans and follows a rigorous benchmarking exercise,” the retailer said. “We are planning an orderly handover of responsibilities, with the transition expected to conclude by the end of 2023, at which point Rosie will assume the position of c.f.o. and join the board of directors."

Carolyn Bradley, chair of The Works, said: “Steve has played a pivotal role over the last three years, helping to steer the business through the financial uncertainty created by the Covid-19 pandemic and subsequent challenging macroeconomic climate. The fact that The Works is now a more financially robust business is in no small part due to Steve’s efforts – we are grateful for his contribution and wish him all the best in his future endeavours.”

Alldridge said: “We are delighted to appoint Rosie as c.f.o. She has extensive financial credentials and PLC experience, a thorough understanding of the business and a track record of delivering results. This combination made her our unanimous choice as c.f.o. working alongside Gavin to deliver our strategy.  

“It has been a great privilege and hugely satisfying to work with Gavin and the team at The Works during a period of significant challenges and change. I believe the business has emerged much stronger and is now poised to deliver profitable growth. I am delighted to be handing over the reins to Rosie, for whose unstinting support and hard work I am extremely grateful. I have no doubt that under Gavin and Rosie’s leadership, the business will prosper.”  

Fordham holds 24,691 shares in the company.