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

TheWorks downgrades FY profit guidance, shares tumble

By Michele Maatouk

Date: Thursday 09 Nov 2023

LONDON (ShareCast) - (Sharecast News) - TheWorks downgraded its full-year profit expectations on Thursday, citing a slowdown in October and increased discounting.
The company now expects FY24 EBITDA of around 6m, down from previous guidance of 10m.

In an update for the 26 weeks to 29 October, the arts, crafts, books and stationery retailer said the macroeconomic environment was "challenging", characterised by high inflation and low consumer confidence.

TheWorks said that in the nine weeks since its previous update, a further softening in consumer demand and unseasonable weather conditions had caused footfall to decline.

It pointed to a slowdown in the rate of store like-for-like sales growth, particularly in October, although the online LFL has improved.

In the first half of the year, the retailer delivered total sales growth of 3.4% and a total LFL sales increase of 1.6%. Store LFLs increased by 3.5%, while online sales declined by 12.2%.

Chief executive Gavin Peck said: "Consumer sentiment softened towards the end of the period, which resulted in early discounting across the sector and increased uncertainty as we head into the Christmas period.

"Recognising the competitiveness of the market we have responded with more promotional activity, which we expect to continue as we approach Christmas. Families will want to celebrate Christmas affordably and our value proposition makes us an ideal choice for them.

"Market conditions remain challenging and given the level of uncertainty in trading and forecasting we believe it is now prudent to moderate our expectations for FY24. Despite this short-term volatility, we believe that our 'better, not just bigger' strategy has the potential to deliver profitable growth in the medium and long-term."

At 0945 GMT, the shares were down 29% at 28.48p.

Russ Mould, investment director at AJ Bell, said: "It's the Nightmare before Christmas for The Works. The company was meant to be a champion in the cost-of-living crisis, selling cheap products to people who have been watching every penny. The idea of getting a big discount on a toy or book would appeal in such economic conditions. Sadly, its tills aren't ringing as expected.

"The retailer blames the weather along with the ongoing tough environment for consumers, putting more pressure on the forthcoming festive shopping period to make up for the shortfall in expected earnings.

"There are already suggestions in the industry that shoppers are going to leave their Christmas shopping as late as possible this year, and that's disastrous for retailers.

"This could result in heavy discounting in the weeks leading up to the big day, putting pressure on profit margins. Indeed, The Works now says it has no choice but to run big promotions and slash prices straight away so as to remain competitive."

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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
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

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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