Last checked at 9 May 2019 07:00
9 May 2019
TheWorks.co.uk plc
Full Year Trading Update
TheWorks.co.uk plc ("The Works" or the "Company"), the multi-channel value retailer of gifts, arts, crafts, toys, books and stationery, announces today a trading update covering the 52-week period to 28 April 2019 (the "Period").
Revenue increased by 13.2% year-on-year, with overall like-for-like ("LFL") sales growth of 3.0%1. This performance was driven by growth both in stores and online, with a particularly pleasing performance from our Click & Collect service.
During the Period, The Works continued its successful store rollout strategy, opening a net 50 new stores, taking the total number of stores trading to 497. Returns on new stores in the Period have been particularly strong, reflecting continued discipline on site selection, supported by an increasingly favourable UK retail property market. The Company has a strong pipeline of openings moving into the new financial year and will open its 500th store tomorrow in Winchester. Management remain confident of the potential to expand the store portfolio to up to 1,000 stores in the UK and Ireland.
The Works delivered its eighth, consecutive, record Christmas performance in the Period but, as a result of the widely reported economic and political uncertainty in the UK, like-for-like sales growth has softened since the turn of the year. Consequently, the Company now expects its adjusted profit before taxation2 to be around the lower end of current market expectations.
The Company continues to focus on its proven four pillar growth strategy of new store rollout, LFL sales growth, the development of its multi-channel proposition and margin enhancement. This, together with its unique value proposition and tight cost control, positions the business well for the future.
Kevin Keaney, Chief Executive Officer of The Works, commented:
"Overall, we have had a successful year as we continued to expand our store footprint and online proposition and introduce new customers to The Works. We achieved another record Christmas, solid like-for-like sales growth and further cash margin improvement in the year. Our differentiated proposition, offering a wide range of new products at outstanding value and delivered by our highly engaged colleagues, continues to be well received by our customers.
"Notwithstanding the more uncertain backdrop since January, the business has multiple growth levers and we remain confident in the future prospects for The Works."
The Company will announce its preliminary results for the Period on 3 July 2019.
Enquiries:
TheWorks.co.uk plc Kevin Keaney, CEO Gavin Peck, CFO
| via Teneo |
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 28 April 2019, the Group operated a network of 497 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 and growing 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 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.
2 Adjusted profit before tax excludes certain adjusting items, principally costs relating to the IPO, debt re-financing and set up costs in relation to the relocation of the e-Commerce warehouse to a third party supplier. It also includes an adjustment to reflect the net financing costs that would have been recognised in the year had the IPO and debt refinancing completed on 29 April 2018.