The Works has upgraded its EBITDA outlook for the 2022 financial year, after reporting narrowing losses in the first half of the year.
For the 26 weeks to October 31, 2021, the value retailer which sells books, stationery, arts, crafts and toys, reported a loss before tax of £1m, down from £4.3m for the same period in 2021, and a 30.6% increase in revenues to £116.1m.
After IFRS 16 impact, The Works reported a slight profit of £0.1m and like-for-like sales growth of 14.5%.
The retailer said it continued to drive a “step-change in our online offer” by developing complementary ranges and investing in its platform as well as “enhancing the in-store shopping experience” through improved merchandising standards.
In a separate update for the 11 weeks to January 16, 2022, the retailer said it was “pleased” with its trading since the end of the half-year, which “removes considerable uncertainty regarding the FY22 result”.
It said that barring any future Covid-19 restrictions or disruptions to trade, it was confident to upgrade its overall full-year financial outlook.
Sales in the shorter period have been strong, with two-year like-for-like growth of 9% ensuring a “strong Christmas”. Store sales grew 0.7% for the period, while ecommerce jumped 71.9%.
The retailer said strong sales in November and December meant “terminal stock levels were low”, which negated the need for significant sales activity in January.
Chief executive Gavin Peck said despite supply chain disruption, inflationary pressures and residual uncertainty surrounding possible Covid-related restrictions, the retailer entered 2022 in a strong position.
He said: “Our performance in the first half shows that our improved customer proposition, clarified purpose and the successful execution of our strategy are delivering tangible results. We delivered a record Christmas, demonstrating the increasing appeal of our customer offer and despite uncertainty over the impact of Omicron and the ongoing supply chain challenges faced throughout our sector.
“This better-than-expected trading provides confidence that we will deliver an improved performance in FY22. We are now a much stronger business than we were two years ago and believe that delivering on our refocused strategy will have a transformational effect on our business.
“None of this would be possible without all of our incredible colleagues at The Works. I am extremely proud of their dedication, hard work and ability to inspire customers to read, learn, create and play.”
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