The Works reports stable sales and a drop in annual profit in a tough market.
- EBITDA decreased from £9m to £6m, impacted by challenging Christmas and rising costs.
- Strategic measures have improved product margins and operational efficiencies.
- Sales increased by 0.9%, with a notable decline in online revenue by 12.4%.
- Key figures from Kelso Group have exited the board following strategic progress.
The Works, a value retailer, has demonstrated resilience amidst a challenging economic environment characterised by stable sales and declining profits in its last financial year. Despite these hurdles, the company expresses confidence in its positioning for the upcoming Christmas trading period.
The adjusted EBITDA for The Works fell significantly from £9 million to £6 million in the year ending 5 May, primarily due to a difficult Christmas trading season and increased operational costs. Yet, the company remains optimistic about enhancing profitability in the financial year 2025, with forecasts predicting an adjusted EBITDA of £8.5 million.
Strategic efforts to bolster product margins, reduce costs, and stabilise operations have been implemented effectively. These initiatives are anticipated to enhance profitability as The Works approaches the critical Christmas sales peak, despite the previous year’s challenges.
Over the past year, total sales saw a modest increase of 0.9% to £282.6 million. However, there was a decline in like-for-like sales by 0.9%. Notably, sales through physical stores edged up by 0.6%, which account for a substantial 90% of the company’s revenue, while online sales saw a significant downturn, decreasing by 12.4%.
Two key figures from The Works’ primary shareholder, Kelso Group, have made their exit from the board following a transitional period. John Goold and Mark Kirkland were temporarily involved to guide the business through change. They expressed confidence in the current management and its trajectory, reflecting the progress made in shifting from the Main Market to AIM and strengthening the leadership.
Despite current challenges, The Works is poised for potential growth during the upcoming Christmas season.
