TheWorks.co.uk PLC (LON:WRKS) said it is planning to reopen stores “at the appropriate time” while it expressed confidence in its outlook.
The gift, toy and stationery retailer saw online sales up more than three times the equivalent period last year and is working with its third-party fulfilment partner to expand capacity.
Like-for-like (LFL) sales rocketed 81% in the week to 22 March as customers stock up on kids’ stationery and material to “beat the boredom” ahead of lockdown.
Capital expenditure for the current year has been cut to £3mln from the £9mln initially planned, senior management have taken a pay cut and the firm is discussing with landlords to defer rent.
In the year to 22 March 2020 (the day before all stores were closed due to the COVID-19 outbreak) LFL sales rose by 0.7%, while net debt at year-end was £8mln. The retailer has access to a £25mln revolving credit facility.
“Rates are a £13mln saving and furloughing staff means that the impact of the negative LFL may not be too catastrophic and we expect The Works to stay EBITDA [underlying earnings] positive for financial year 2021,” analysts at Peel Hunt commented.
Shares dropped 4% to 26.25 on Thursday at the opening bell.