TheWorks "delighted" by accelerating sales growth, upgrades guidance

TheWorks.co.uk PLC issued a trading update ahead of its annual general meeting on Monday, reporting sales growth for the year so far and raising its full-year adjusted earnings guidance.

In response, The Works shares traded 4.7% higher at 91.40 pence on Monday afternoon in London.

The Birmingham, England-based seller of books, stationery and toys said its like-for-like sales climbed 10% in the first 18 weeks to Sunday, September 6. This represented a marked acceleration from growth of 5.9% for the same period last year.

"This performance, which has been supported by continued sales growth across all four of the group's key product categories, reflects the strength and relevance of The Works' screen-free focused customer proposition as well as the continued execution against the group's Elevating The Works growth strategy," The Works stated.

It said it expects adjusted earnings before interest, tax, depreciation and amortisation to be at least £16.0 million for the year, ahead of its previous forecast and market expectations, both of which stood at £15.0 million.

This would represent a rise from £14.0 million in the financial year that ended May 3.

Still, The Works added that it remains "mindful of continuing macroeconomic uncertainty and that the key Christmas trading period is still to come".

"We are delighted with the strong trading momentum and like-for-like sales growth achieved during the first 18 weeks of the year, which includes the important back-to-school trading period," commented Chief Executive Officer Gavin Peck. "This performance has supported a further upgrade to the board's financial 2027pre-IFRS 16 adjusted Ebitda expectations and reflects the successful execution of our long-term growth strategy and our clear focus on delivering a differentiated customer proposition focused on affordable screen-free activities for the whole family.

"We remain focused on maintaining this strong trading momentum through the remainder of the financial year and delivering the group's exciting long-term potential for the benefit of all stakeholders."

In early August, 10% shareholder Kelso Group Holdings PLC requested that a resolution to appoint Graeme Coulthard to The Works' board be considered at the AGM.

The Works said its board "firmly and unanimously believes" that appointing Coulthard would not be in shareholders' best interests, with its reasons including Coulthard's "limited experience as a director of a listed company".

Last week, Independent Voting Advisors ISS and Glass Lewis both recommended that The Works shareholders vote against the resolution to appoint Coulthard, in line with the board's unanimous recommendation.

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