The Works revenues up 5.8% in FY23 despite ‘challenging’ backdrop

The Works’ revenues increased by 5.8% to £280.1m for the year ended 30 April 2023, up from £264.6m in FY22, and as such, the retailer said it is well-positioned to capitalise on opportunities from its strategy in the coming year. The value retailer of arts and crafts, stationery, toys, and books called its performance for FY23 “resilient against a challenging backdrop”. This comes as the retailer’s store sales, which represent 88.8% of its total sales, strengthened as FY23 progressed, with a like-for-like sales increase of 7.5%. However, The Works’ online sales declined by 15%, which resulted in overall like-for-like sales growth falling to 4.2%. While product gross margin declined due to strategic change in sales mix and higher freight costs, business rates for the retailer increased by £5.8m as Covid-19 reliefs ended. Nonetheless, pre IFRS 16 Adjusted EBITDA reached a total of £9m and is said to be in line with the group’s revised expectations, following a total of £16.6m in FY22, while the group achieved an adjusted profit before tax of £10.1m compared to £16.5m in FY22. According to the retailer, trading during the first 17 weeks of FY24 to Sunday 27 August has been in line with expectations, as store like-for-like sales grew by 5.4% while online sales continued its decline by 18.4%, which resulted in an overall like-for-like sales growth of 3.1%. In addition, the group announced that Steve Alldridge announced his intention to step down from his role as CFO by the end of 2023. Rosie Fordham, The Works’ current head of finance, will be appointed as the new CFO upon Alldridge’s departure. Gavin Peck, CEO of The Works, said: "The Works delivered a resilient performance in FY23, despite facing some sizable challenges. Revenue growth was driven by our strong portfolio of stores, bolstered by the sector-wide shift of customers returning to shop in-store post-Covid. Although inflationary pressures increased business costs and dampened consumer confidence, we ended the year in line with our rebased expectations. "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 range is aligned with customer demand and improved our store estate.” He added: "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.”