The Works profits hit by higher costs
The Works saw its profits slip in the year to 30 April as rising freight, energy, and other business costs took their toll.
The value retailer of arts and crafts, stationery, toys, and books posted an adjusted pre-tax profit of £10.1 million compared to £16.5 million in the previous year.
However, revenue increased by 5.8% to £280.1 million after like-for-like store sales jumped by 7.5%.
During the year, The Works refreshed its product offering by launching new own-brand products such as “PlayWorks” toy range and worked to grow its book market share by stocking more front-list titles from best-selling authors.
It also launched a review of the business operating model to drive effectiveness and efficiencies, and improve processes and IT systems.
Gavin Peck, chief executive officer of The Works, said: “Although inflationary pressures increased business costs and dampened consumer confidence, we ended the year in line with our rebased expectations. FY23 also showcased the enduring appeal of our value proposition.
“In the first half our focus was on protecting and rebuilding the business, but as the year progressed we were able to make more strategic progress. We have developed our brand and customer proposition, ensured that our ranging is aligned with customer demand and improved our store estate. We’ve also taken steps to enhance our online proposition and drive significant operational improvements across the business, the benefits of which we expect to be fully realised from FY24 onwards.”
Giving an update on more current trading, The Works said the first 17 weeks of of the new financial year had been in line with expectations, with store like-for-like sales growing by 5.4% and online sales declining by 18.4%, which resulted in total like-for-like sales growth of 3.1%.
Peck added: “Looking ahead, the macroeconomic environment remains uncertain. However, we are now well positioned to capitalise on strategic opportunities and given the momentum gained in the latter half of FY23 we expect to grow sales and profit in FY24. Reflecting confidence in the group’s prospects, the board proposes a final dividend of 1.6 pence per share in respect of FY23.“
