The Works has posted a decline in profit for the last financial year, but said that it is “well-positioned to capitalise on opportunities”.
In its preliminary results for the year ending 30 April 2023 (FY23), the arts, crafts, and books retailer posted a profit before tax of £5m, a decline from £14.2m the previous year.
The retailer was hit by an increase in business rates costs of £5.8m as COVID-19 reliefs ended.
However, The Works’ revenue increased by 5.8% to £280.1m, with like-for-like store sales growing by 7.5%. Its online sales declined by 15%, resulting in an overall like-for-like sales increase of 4.2%.
The retailer said it had made good strategic progress over the period, providing “solid foundations” for the current financial year (FY24).
The Works opened 14 new stores during the period, all of which it said are trading ahead of expectations. It relocated a further three, and closed 13 stores. The retailer said it had continued to optimise its existing estate with an investment of around £1.4m in 34 refits.
Trading during the first 17 weeks of the current financial year has been in line with the retailer’s expectations, with a total like-for-like sales growth of 3.1%.
Gavin Peck, chief executive officer of The Works, said: “The Works delivered a resilient performance in FY23, despite facing some sizeable 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.”
He added: “Looking ahead, the macroeconomic environment remains uncertain. However, 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.”
Also announced was a change in the company’s board, with chief financial officer Steve Alldridge set to step down from his role by the end of 2023. He will be replaced by current head of finance Rosie Fordham.