The Works faces a drop in full-year profit but remains optimistic about Christmas sales.
- In the financial year ending 5 May, The Works’ adjusted EBITDA fell from £9m to £6m due to challenging market conditions.
- Despite a challenging Christmas period and increased costs, strategic changes are expected to enhance profitability for FY25.
- Store sales saw a slight increase of 0.6%, contributing to total sales growth, although online sales declined by 12.4%.
- Kelso Group representatives step down from The Works’ board as the retailer shifts its market focus and leadership.
The Works reported a significant decline in adjusted EBITDA, dropping from £9m to £6m at the close of the financial year ending 5 May. The retailer attributed this decrease to a persistently challenging consumer environment and significant cost pressures, particularly during the previous Christmas trading period.
Strategic measures have been implemented to improve product margins and reduce costs, enabling The Works to forecast an increased adjusted EBITDA of £8.5m for FY25. The retailer believes that these strategic shifts will position it favourably for the upcoming Christmas peak, enhancing profit growth.
During the year, The Works experienced a 0.9% increase in overall sales, reaching a total of £282.6m, despite like-for-like sales dipping by 0.9%. In-store purchases, which account for 90% of its revenue, saw a modest growth of 0.6%, while online sales notably fell by 12.4%.
Gavin Peck, CEO of The Works, acknowledged the challenging backdrop and tough trading conditions. “Good strategic progress was made during the year, and we believe this aligns with our high-level direction. The necessity to evolve our strategy is evident as we aim to transform the business and drive future performance,” stated Peck.
The departure of two representatives from Kelso Group, including CEO John Goold and CFO Mark Kirkland, marks a noteworthy change. Appointed temporarily to assist during a transformative phase, they expressed confidence in the company’s trajectory as The Works transitioned from the Main Market to AIM, strengthening its leadership team.
The Works’ strategic initiatives and leadership restructuring are set to support profitability growth, positioning the retailer well for the Christmas trading peak.
