TheWorks.Co.Uk (WRKS)

Sector:

Retailers

Index:

FTSE Fledgling

 25.15p
   
  • Change Today:
      0.000p
  • 52 Week High: 41.05p
  • 52 Week Low: 21.80p
  • Currency: UK Pounds
  • Shares Issued: 62.50m
  • Volume: 0
  • Market Cap: 15.72m
  • RiskGrade: 389

The Works cuts dividend despite full-year revenue growth

By Josh White

Date: Wednesday 30 Aug 2023

LONDON (ShareCast) - (Sharecast News) - Discount stationery, crafts, books and toys retailer The Works reported revenue growth and resilience amid a challenging economic environment in its preliminary results on Wednesday, largely due to strong in-store sales.

The London-listed firm did, however, report declining online sales and increased operating costs.

Its chief financial officer Steve Alldridge had also announced his departure by the end of the year, to be succeeded by the current head of finance, Rosie Fordham.

The company reported a 5.8% increase in total revenue, amounting to £280.1m for the 52 weeks ended 30 April, up from £264.6m in the prior year.

In-store sales, which make up 88.8% of the company's total sales, saw an impressive like-for-like sales growth of 7.5% as the year progressed.

By contrast, online sales dipped 15%, resulting in an overall like-for-like sales growth of 4.2% for the year.

A strategic change in sales mix, notably an increased focus on front-list books, and rising freight costs led to a decline in product gross margin by 170 basis points.

Moreover, the end of Covid-19 reliefs led to an increase in business rates costs by £5.8m.

Despite challenges, the company met its revised expectations with a pre-IFRS 16 adjusted EBITDA of £9m, although that was still a drop from £16.6m in 2022.

Adjusted profit Before tax stood at £10.1m, down from a restated £16.5m in the prior financial period.

The company maintained a strong financial position, ending the fiscal year with net bank balances of £10.2m.

Nevertheless, to balance profitability and shareholder returns, the board proposed a reduced final dividend of 1.6p per share, down from 2.4p last year.

In line with expectations, The Works said trading during the first 17 weeks of the 2024 period had shown store like-for-like sales growing 5.4%, although online sales continued to slide, registering an 18.4% decline.

The overall like-for-like sales growth stood at 3.1% for the period, with the board saying it was comfortable with market forecasts predicting an adjusted EBITDA of around £10m for 2024.

Alongside its financial results, The Works announced a forthcoming change in its executive leadership.

Chief financial officer Steve Alldridge would step down from his role by the end of 2023, and Rosie Fordham, currently serving as head of finance, would succeed him as the new CFO.

"The Works delivered a resilient performance in 2023, despite facing some sizable challenges," said chief executive officer Gavin Peck.

"Revenue growth was driven by our strong portfolio of stores, bolstered by the sector-wide shift of customers returning to shop in-store post-Covid.

"Although inflationary pressures increased business costs and dampened consumer confidence, we ended the year in line with our rebased expectations."

Peck said the 2023 financial year also showcased the "enduring appeal" of the brand's 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 range 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 2024 financial year onwards."

Looking ahead, Gavin Peck said the macroeconomic environment remained uncertain.

"However, we are now well positioned to capitalise on strategic opportunities and given the momentum gained in the latter half of 2023, we expect to grow sales and profit in 2024.

"Reflecting confidence in the Group's prospects, the Board proposes a final dividend of 1.6p per share in respect of the 2023 financial year."

At 0849 BST, shares in TheWorks.co.uk were down 11.57% at 28.52p.

Reporting by Josh White for Sharecast.com.

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

TheWorks.Co.Uk Market Data

Currency UK Pounds
Share Price 25.15p
Change Today 0.000p
% Change 0.00 %
52 Week High 41.05p
52 Week Low 21.80p
Volume 0
Shares Issued 62.50m
Market Cap 15.72m
RiskGrade 389

TheWorks.Co.Uk Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
38.54% above the market average38.54% above the market average38.54% above the market average38.54% above the market average38.54% above the market average
5.26% above the sector average5.26% above the sector average5.26% above the sector average5.26% above the sector average5.26% above the sector average
Price Trend
58.98% below the market average58.98% below the market average58.98% below the market average58.98% below the market average58.98% below the market average
61.9% below the sector average61.9% below the sector average61.9% below the sector average61.9% below the sector average61.9% below the sector average
Income
77.31% above the market average77.31% above the market average77.31% above the market average77.31% above the market average77.31% above the market average
88.89% above the sector average88.89% above the sector average88.89% above the sector average88.89% above the sector average88.89% above the sector average
Growth
89.17% below the market average89.17% below the market average89.17% below the market average89.17% below the market average89.17% below the market average
65% below the sector average65% below the sector average65% below the sector average65% below the sector average65% below the sector average

What The Brokers Say

Strong Buy 0
Buy 0
Neutral 1
Sell 0
Strong Sell 0
Total 1
neutral
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TheWorks.Co.Uk Dividends

  Latest Previous
  Final Final
Ex-Div 05-Oct-23 03-Nov-22
Paid 02-Nov-23 24-Nov-22
Amount 1.60p 2.40p

Trades for --2024

Time Volume / Share Price
0 @ 0.000p

TheWorks.Co.Uk Key Personnel

CEO Gavin Peck
CFO Rosie Fordham
Chair Carolyn Bradley

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