In store shopping leads sales growth at The Works, but profits lower

Retailer The Works has recorded full-year sales growth (The Works)
Retailer The Works has recorded full-year sales growth (The Works)

High street shoppers have helped offset declining online sales at The Works, the stationery and books retailer showed as it recorded full-year revenue growth.

The chain, which has 526 branches of which 12 are in greater London, said comparable sales in stores climbed 7.5% in the year to April 30. But the online figure dropped 15%.

Total like for like sales rose 4.2% and revenue increased 5.8% to £280.1 million.

The firm’s update said: “Retailers have witnessed a shift in consumer behaviour post-Covid, with shoppers increasingly returning to shop in-store and less so online. Stores have always been the lifeblood of the business and it has therefore resulted in a net gain for The Works given that stores represent around 90% of sales.”

Chief executive Gavin Peck said: “Although inflationary pressures increased business costs and dampened consumer confidence, we ended the year in line with our rebased expectations.”

Pre-tax profits tumbled to £5 million from £14.2 million, also impacted by the absence of Covid-related business rates support which it was helped by in the prior financial year.

Peck said the firm expects the period “to be the low point in The Works‘ profitability post-Covid given that cost headwinds have now eased, the financial performance improved throughout the second half of the year and we have started to make more meaningful strategic progress”.

He cautioned the macroeconomic outlook remains uncertain, but added he remains confident in the ability to deliver profitable growth in the medium term.

The board has proposed a final dividend of 1.6p per share.