01 Oct 2022

The Works’ shares rocket after ‘encouraging’ sales and return to profit

The Works’ shares rocket after ‘encouraging’ sales and return to profit

Bosses at The Works have said they are “encouraged” by recent trading, despite pressure on consumers, as the group swung back to profit for the past year.

Shares in the company surged by more than 40% as a result, on Friday.

The stationery, crafts and books retailer hailed pre-tax profits of £10.2 million for the year to May, after Covid restrictions dragged it to a £2.8 million loss in the previous year.

It said increased demand following the pandemic, and careful management of its supply chain, led a strong rebound in sales.

Revenues jumped by 46.5% to £264.6 million for the year, compared with the previous year.

Gavin Peck, chief executive of The Works, said this came despite “some significant external operational challenges”.

In August, the company told shareholders that more recent store trading had stayed resilient, although online sales were “more challenging” as shoppers returned to the high street following the pandemic.

On Friday, the group said it has seen a “more positive pattern of trading” since the end of the first quarter.

It said a “very good back-to-school season” saw total like-for-like sales increase by 5.7% over the seven weeks to September 18, supported by 7.9% growth in stores.

Mr Peck said: “We are well placed operationally for Christmas and are gearing up to deliver for our customers, maintaining our commitment to provide them with the products they love at fantastic value.

“The Works is a resilient business with a proven track record of delivering robust results during times of economic hardship, however, given current conditions, we maintain our cautious view of the year ahead.

“We remain confident in our ability to continue making good strategic progress and to deliver growth in the medium-term.”

Shares in the company moved 42.2% higher to 41.09p in early trading.

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