TheWorks.co.uk PLC (LON:WRKS) has joined the ranks of retailers pushing back against the gloomy atmosphere by posting positive Christmas trading.
The group, which sells gifts, craft supplies, books, and stationery, said in a trading update for the 11 weeks to 13 January that it had delivered record sales with like-for-like (LFL) growth of 4.5%.
READ: TheWorks.co.uk climbs as ‘Squishies’ sales help boost interim revenues by 15%
This was accompanied by the group’s first half results, which ran for the 26 weeks to 28 October.
For the interims, the company said LFL sales had grown 3.8%, slower than 8.2% a year ago while the loss before tax widened to £7.9mln from £4.5mln and revenues rose 15% at £91.5mln.
The sales and revenue figures were in line with a trading update issued by the company in November, when it said the sales of ‘Squishies’ toys and growth in both stores and online had boosted its earnings.
The losses, meanwhile, were partially attributed to around £2.9mln in costs relating to the firm’s initial public offering (IPO) in July, without which losses would have come in at £4.4mln.
The group also declared its maiden interim dividend of 1.2p per share.
Over the half-year period, the company said it had opened 32 net new stores and was on track for 50 in the full year, adding that it was continuing its rebranding programme to ‘TheWorks.co.uk’ to promote its multi-channel proposition.
Trading following the end of the period had been in line with expectations, and as such full year expectations had remained unchanged.
The company said while the UK retail and economic outlook remained “challenging”, it was confident of its future prospects due to its “differentiated proposition” and “unique multi-channel offering”.
Kevin Keaney, chief executive of The Works, said the group’s focus for 2019 would be on introducing its proposition to more customers and expanding the store portfolio and online offer while remaining “flexible and nimble traders whatever the economic environment may be”.
Broker hails “very pleasing” maiden results
In a note to clients, analysts at broker Shore Capital said the results showed that the firm had “navigated the challenging peak trading period well” and that investors would “no doubt, also be pleased to see a maiden dividend declaration”.
“We like its proposition, seeing its mix of affordability, authority in its ranges, strong execution capabilities and adeptness to market conditions as key strategic virtues of management and so the business.”
The broker added that while the group was “immature with many stores still to open”, the British real estate market “makes for opportunities to strike more attractive property deals”, although clarified that the firm needed to be “cognisant for quite rapidly evolving high streets, particularly where previous anchors close down”.
In early trading Wednesday, The Works shares were flat at 136p.
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