Gift, toy and stationery retailer TheWorks.co.uk PLC (LON:WRKS) has ended its first year as a listed firm on the front foot.
For the year ended 28 April 2019, the company reported an adjusted pre-tax profit of £6.7mln, 58.6% higher than the prior year, while revenues grew 13.2% to £217.5mln.
READ: TheWorks.co.uk shares plunge as it issues profit warning
Like-for-like sales also rose by 3% in the year, although this was a slower pace than the 4.7% rise in 2018.
The group also proposed a maiden final dividend of 2.4p per share, taking the total divi for the year to 3.6p.
Kevin Keaney, the group’s chief executive, said that new store openings had been the biggest driver of growth in the year, with a net of 50 new outlets opening their doors, adding that he was “particularly pleased” with the company’s Click & Collect service which remained its fastest-growing channel and resulted in half a million more customer visits.
Looking ahead, Keaney said underlying LFL sales for the first nine weeks of its current year had improved on the final quarter of the prior 12 months and were up 1% despite a “subdued” consumer backdrop.
He added that this was likely to continue for the foreseeable future, however the “structural shift” in the retail sector had opened up a constant flow of good quality retail space with the firm having a “strong pipeline” of new sites.
The performance sent the group’s shares surging 6.8% to 67p in lunchtime trading, a reaction that may have brought the company’s management some relief after the group issued a profit warning in May on the back of “economic and political uncertainty in the UK”.
Target price trimmed
Despite the seemingly positive figures, analysts at Peel Hunt trimmed their target price for TheWorks to 100p from 135p and said they were downgrading their forecasts for the current year.
However, despite the lower numbers, the broker believed that the company’s equity story was “very much intact” and that the shares offered an “excellent opportunity”.
Analysts said they’re revised estimates were “very achievable” that the shares price had discounted “a much worse outcome” than what was delivered.