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(Alliance News) - TheWorks.co.uk PLC warned profit will significantly miss expectations with sales not materialising as expected, it said on Thursday.
Shares slumped 42% on Thursday in London to a price of 45.11 pence apiece. In July 2018, TheWorks joined the London market at 160.00p.
The gifts, arts, crafts, toys, books and stationary retailer warned profit will be well below market consensus after sales missed expectations. For the half year to October 27, revenue rose 5.4% but fell 1.9% like-for-like, reflecting a "difficult" consumer backdrop.
"Whilst like-for-like 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," said TheWorks.
"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 pretax profit to be significantly below current market expectations."
TheWorks carried out discounting during the period, it said, due to the poor conditions. It heads into the peak Christmas period was "confidence" it has a strong Christmas offering, it said.
Chief Executive Kevin Keaney said: "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."
TheWorks will release interim results and an update on Christmas trading on January 16.
By George Collard; georgecollard@alliancenews.com
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