Retailer Retains £15m FY22 EBITDA Forecast Despite Challenges

  • The Works reports a slight slowdown in trading due to cost of living crisis
  • Trading ‘well above’ pre-pandemic levels with 10% LFL growth compared to two years ago
  • Two-year sales growth at 12.7%, lower than before Christmas
  • Limited disruption from cyber security incident in March
  • Operational and propositional improvements offset external headwinds, retaining £15m FY22 EBITDA forecast
  • Dividend reinstated at 2.4 pence per share, to be recommended in September
  • CEO Gavin Peck remains optimistic for future sales growth and customer value

Arts and crafts and book retailer The Works has reported a slowdown in recent trading due to the cost of living crisis, despite a strong FY22 performance. In its latest trading update for the 52 weeks ended May 1, 2022, the company revealed it was trading ‘well above’ pre-pandemic levels with a 10% like-for-like (LFL) growth compared to two years ago and total two-year sales growth of 12.7%. Although the rate of growth has been lower than before Christmas, consumer spending is widely reported to have slowed in recent months, impacting sales. The company experienced ‘limited disruption’ from a cyber security incident in March. Despite these headwinds, operational and propositional improvements helped offset external challenges, retaining its FY22 EBITDA forecast of £15m. CEO Gavin Peck remains optimistic for future sales growth and customer value.

Factuality Level: 8
Factuality Justification: The article provides accurate information about The Works’ performance, including sales growth, impact of cost-of-living crisis on trading, cyber security incident, and the company’s plans for dividends and future growth strategy. It also includes a quote from the CEO. However, it could be more concise and avoid using some marketing phrases like ‘better, not just bigger’.
Noise Level: 3
Noise Justification: The article provides relevant information about The Works’ performance and its response to external challenges such as the cost-of-living crisis and a cyber security incident. It also includes quotes from the CEO that add insight into the company’s strategy and outlook for the future. However, it does not delve too deeply into the broader economic context or provide significant new knowledge or actionable insights.
Financial Relevance: Yes
Financial Markets Impacted: The Works retailer’s stock may be impacted by its financial performance and outlook
Financial Rating Justification: The article discusses the company’s financial performance, including sales growth, EBITDA forecast, and dividend recommendations, which can affect the stock price and investor sentiment.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the article, but the company experienced a slight slowdown due to the cost of living crisis and limited disruption from a cyber security incident.

Reported publicly: www.retailsector.co.uk