The Works losses widen but festive sales spike

The value retailer suffered a pre-tax loss of £7.9m in the 26 weeks to October 28, 2018, up from £4.5m the previous year.

Adjusted EBITDA also widened to £900,000 compared to £200,000 a year ago, while its adjusted pre-tax loss remained flat at £4.4m.

The Works opened 32 net new shops open during the period and is on track to open 50 net new stores by the end of its financial year as it presses ahead with its expansion plans.

The Works posted a 3.8% uplift in like-for-likes during the half – its first interim results as a listed business – while total sales rose 15% to £91.5m.

Gross profit margins increased to 14.8% from 14.5% the prior year as the retailer refrained from discounting ahead of Christmas.

It said it carried “strong” sales momentum into the crucial Christmas trading period. Like-for-like sales rose 4.5% during the 11 weeks to January 13, representing a “record” festive performance by the business.

The Works boss Kevin Keaney told Retail Week its bottom line was “in line with expectations”. He added that the retailer has “never made a profit” in its first half due to the “highly seasonal nature” of ts business.

Keaney added: “We’re really pleased to be reporting a strong maiden set of interim results today. We have continued to delight our customers with our wide and constantly refreshed range of great value products through our flexible and convenient multichannel offering.

“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.”