TheWorks.co.uk PLC on Friday reaffirmed its guidance for 2024, after losses narrowed in its half-year.
The Birmingham, England-based online seller of books, stationery and toys, said its pretax loss for the six months to November 3 narrowed to £6.9 million from £16.5 million the year prior.
Revenue for the period rose 1.3% to £124.2 million from £122.6 million year-on-year, despite like-for-like sales decreasing by 0.8%.
TheWorks said this decline was expected, and remained ‘ahead of the wider non-food retail sector’. Online sales were significantly slower than in-store trading, decreasing by 15% during the first-half.
The firm attributed this decline to planned lower promotional activity and reduced capacity at its fulfilment centre, which created £1 million in exceptional costs, but said the issues had since ‘subsided’.
The company’s net debt rose to £8.5 million in the first-half from £2.5 million the previous year. Nonetheless, TheWorks maintained it was on track for improved profitability in 2025.
Modest second-half sales growth is expected to meet full-year market consensus of £8.5 million in adjusted earnings before interest, tax, depreciation and amortisation. This compares with £6.0 million achieved in financial 2024.
TheWorks said its refreshed business strategy will support an Ebitda margin of at least 6% in the next five years. This includes updated marketing, an optimised store portfolio and various cost-cutting measures, alongside gradual selling price increases.
‘Looking ahead, we are mindful of the need to navigate fragile consumer confidence and significant cost headwinds but believe there is much to be optimistic about at The Works,’ said Chief Executive Gavin Peck.
‘We expect that our action to grow revenue, increase margins and reduce costs will deliver improved results in the remainder of this financial year and in FY26.’
The company proposed no interim dividend for the first-half, unchanged year-on-year.
TheWorks shares were up 4.3% at 20.48 pence each on Friday morning in London.
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