The Works sees profits dip but remains optimistic after revenue growth

The value retailer of arts and crafts, stationery, toys, and books reported revenue rose by 5.8 per cent to £280.1m, from £264.6m the year before.

However, profit before tax for the full year slumped to £5m, significantly down from £14m when compared to the same period last year.

Store sales, which represent 88.8 per cent of total sales, strengthened as the year progressed, with an like-for-like sales seeing an increase of 7.5 per cent.

However, online sales declined by 15 per cent.

The company, which has a head office near Sutton Coldfield, said trading during the first 17 weeks of the new financial year – to Sunday, August 27 – has been in line with expectations, with store like-for-like sales growing by 5.4 per cent and online sales declining by 18.4 per cent, resulting in overall like-for-like sales growth of 3.1 per cent.

The new came as Steve Alldridge advised the Board of his intention to step down from his role as Chief Financial Officer by the end of 2023.

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.

"FY23 also showcased the enduring appeal of our value proposition. I'd like to thank our colleagues who have demonstrated their ongoing dedication to The Works and have continued to show customers how they can read, learn, create and play more on a budget.

"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 ranging is aligned with customer demand and improved our store estate. We've also taken steps to enhance our online proposition and drive significant operational improvements across the business, the benefits of which we expect to be fully realised from FY24 onwards.

"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. Reflecting confidence in the Group's prospects, the Board proposes a final dividend of 1.6 pence per share in respect of FY23."