The Works books 4.5% like-for-likes surge over Christmas

The Works CEO
// Christmas like-for-likes sales up 4.5%
// Half year like-for-likes up 3.8%; total sales up 15%
// However, half-year adjusted EBITDA was a loss of £900,000, alongside pre-tax loss of £7.9m

The Works has continued its sales momentum into the crucial Christmas trading period, delivering record sales performance after recording a loss in the first half.

For the 11-week period ending January 13, like-for-like sales growth jumped 4.5 per cent, reflecting good sales growth in both stores and online.

The Works’ Christmas results were released simultaneously with interim results for the half-year period ending October 28 – the first set of updates since the retailer entered the stock market.

The stationery, arts and craft chain saw like-for-like sales grow by 3.8 per cent during the first half, although this was a slowdown compared to the 8.2 per cent like-for-like growth recorded the same period in the prior year.

The Works also raked in revenues of £91.5 million during the period, an increase of 15 per cent year-on-year.

Gross profit margin also increased from 14.5 per cent to 14.8 per cent year-on-year.

The Works attributed this performance to growth in both its bricks-and-mortar stores and ecommerce channels, particularly the strong sales of Squishies partly offsetting sales from the spinners craze in the prior year.

However, the retailer reported another set of losses in the first half – but attributed this to the seasonal nature of the business.

Adjusted EBITDA came in at a loss of £900,000, deeper than the £200,000 loss recorded a year prior, and loss before tax plummeted further from £4.5 million to £7.9 million year-on-year.

The Works chief executive Kevin Keaney said he was “really pleased” with what he viewed as a strong set of maiden interim results.

“We have continued to delight our customers with our wide and constantly refreshed range of great value products through our flexible and convenient multi-channel offering,” he said.

“We continued that momentum into the second half with like-for-like sales growth of 4.5 per cent.

“This is a record performance for us, with customers recognising our great value and exciting product range that made us a go-to choice for Christmas.”

He added: “In 2019 our focus will be on introducing our unique multi-channel value proposition to even more customers by expanding our store portfolio and our online offer whilst remaining flexible and nimble traders whatever the economic environment may be.”

During the first half, The Works continued its store rollout strategy, opening a net 32 new stores.

Over Christmas it opened another five stores, taking the total number of stores trading to 484.

The retailer said it was on track to meet its target of 50 net new store openings for the full-year, and that full-year trade will be in line with the board’s expectations.

The Works made its debut on the London Stock Exchange in July with an IPO with £100 million.

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