Losses widen at The Works, shares slide

The books, arts and crafts, toys and stationery specialist said revenues in the 26 weeks to 29 October rose 3% to £122.6m, while total like-for-like sales sparked 1.6%.

Pre-tax losses, however, widened to £14.8m from £7.3m a year previously. The Works said it had faced tough cost headwinds during the first half, due to inflation and the increase in national living and minimum wages.

Current trading also disappointed, with like-for-like sales falling 4.9% in the 11 weeks to 14 January 2024, below management expectations.

The Works attributed the weak performance to a "challenging" consumer environment and subdued demand over the festive period.

As at 1010 GMT, shares in The Works were down 11% at 24.12p.

Gavin Peck, chief executive, said: "Market conditions have been persistently challenging, putting pressure on our sales and profit performance in the first half and throughout the festive period.

"It is clear that many families celebrated Christmas on tighter budgets this year, and while we offer excellent value, we are not immune to this reduced spend.

"Our focus for the remainder of the year will be on cost reduction, rebuilding margin and profitability, and conserving cash. It is necessary to take this action now, to stabilise the profitability of the business during this challenging period.

"However, we remain confident that our ‘better, not just bigger’ strategy is the right direction."

The retailer also left its full-year guidance for adjusted earnings before interest, tax, depreciation and amortisation of around £6m unchanged. Interim underlying losses widened to £8.5m from £6.4m a year previously.