The Works raises profit outlook again as like-for-like sales grow 9.8%
The arts, crafts, books and toys chain said Back to School and Halloween both traded strongly, and it now expects earnings of at least £17m this year.
The Works has raised its profit forecast for the second time this financial year, after like-for-like sales grew 9.8% in the 26 weeks to 1 November. A year earlier the figure was 4.0%. Total sales from its continuing business were up 10.1% at £128.8m, against £117.0m in the same half last year.
The retailer, which sells arts and crafts, stationery, toys and games, and books from more than 500 shops in the UK and Ireland, said all four of those categories grew and that Back to School and Halloween traded strongly. It set the figures against British Retail Consortium data showing like-for-like non-food sales in shops fell 1.0% over the six months to 31 October.
On 20 March the board announced that The Works would stop selling online and turn its website into a non-transactional one, so the numbers above cover the shops only.
The board now expects pre-IFRS 16 adjusted EBITDA, the profit measure it uses for guidance, of at least £17.0m for the financial year. Its previous guidance, set at its annual meeting on 7 September, was at least £16.0m.
Product margin was 62.7%, against 62.5% a year earlier. The business ended the half with £3.5m of net cash, having had net debt of £5.3m at the same point last year, which it put down to higher profits and tighter control of stock.
Across the wider market, UK toy sales were 13% higher in the first nine months of the year, according to figures released with this year's DreamToys list.
