Retailer’s Profit Dips Despite Strong Store Sales Performance

  • The Works’ revenues increased by 5.8% to £280.1m in FY23
  • Store sales strengthened with a like-for-like sales increase of 7.5%
  • Online sales declined by 15%, affecting overall like-for-like sales growth at 4.2%
  • Product gross margin declined due to strategic change in sales mix and higher freight costs
  • Business rates increased by £5.8m as Covid-19 reliefs ended
  • Pre IFRS 16 Adjusted EBITDA at £9m, in line with revised expectations
  • Adjusted profit before tax at £10.1m, down from £16.5m in FY22
  • Trading in the first 17 weeks of FY24 in line with expectations
  • Store like-for-like sales grew by 5.4%, online sales declined by 18.4%
  • CEO Gavin Peck: ‘well positioned to capitalise on strategic opportunities’
  • Steve Alldridge stepping down as CFO, Rosie Fordham appointed as new CFO

Arts and crafts retailer The Works has reported a 5.8% increase in revenues to £280.1m for the year ended 30 April 2023, despite facing challenges such as higher freight costs and inflationary pressures. Store sales grew by 7.5%, while online sales declined by 15%. The company’s product gross margin also decreased due to a strategic change in sales mix. Business rates increased by £5.8m as Covid-19 reliefs ended. Pre IFRS 16 Adjusted EBITDA reached £9m, aligning with revised expectations. Trading in the first 17 weeks of FY24 has been in line with expectations, with store like-for-like sales up 5.4% and online sales down 18.4%. CEO Gavin Peck says the company is well-positioned to capitalize on strategic opportunities in the future.

Factuality Level: 8
Factuality Justification: The article provides accurate information about The Works’ financial performance, including revenue growth, store and online sales figures, and the company’s outlook for future growth. It also includes relevant details about the CEO’s comments on the company’s strategy and challenges faced during FY23. However, it lacks some context or comparison to previous years’ performances and does not mention specifics of the strategic changes in sales mix.
Noise Level: 6
Noise Justification: The article provides relevant information about The Works’ financial performance and its CEO’s outlook for future growth opportunities. However, it contains some repetitive information and lacks a deep analysis of long-term trends or possibilities.
Financial Relevance: Yes
Financial Markets Impacted: The Works’ financial performance impacts its stock value and may affect related companies such as suppliers and competitors.
Financial Rating Justification: This article discusses The Works’ financial performance, including revenue growth, profitability, and changes in store and online sales. It also mentions the company’s expectations for future growth, which could impact related stocks and businesses.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: No extreme event mentioned in the text

Reported publicly: www.retailsector.co.uk