The Works warns of a slowdown in trade despite the “strong” 22nd fiscal year

Retail arts and crafts retailer The Works has warned that it has experienced a slight slowdown in recent trade due to the cost of living crisis, despite a “strong” performance for FY22.

In a trade update for the 52 weeks ended May 1, 2022, the retailer revealed that it was trading “well above” pre-pandemic levels by 10% on an LFL basis over two years and a two-year overall growth rate. sales of 12.7%.

After a strong first half and a record performance in the Christmas trade, he added that his two-year LFL sales in the last months of the fiscal year remained positive, although growth was expected to be lower than before Christmas.

He added that consumer spending was “widely reported to have slowed in recent months”, adding that he believed it had affected sales. During the period, he also confirmed that he had suffered a “limited disruption” to trade and business operations as a result of a cybersecurity incident in late March.

Despite these headwinds, he revealed that “operational and propositional improvements” have helped offset the impact of the headwinds noted above, meaning that he has maintained his EBITDA forecast for the 22nd financial year of £ 15 .0 million

As such, the company has recovered its dividend and expects to recommend a dividend of approximately 2.4 pence per share together with the results of the 22nd fiscal year in September and to maintain a progressive dividend policy thereafter.

CEO Gavin Peck said: “We are pleased to announce strong trading in fiscal year 22, consistently delivering sales well before pre-COVID levels and another record-breaking Christmas. This performance and the sustainability that our business has shown against a challenging external background demonstrate the positive effect of our “better, not just bigger” strategy, which still has many more positive results.

“We are pleased that our improved sales performance will allow us to recommend a dividend recovery and remain optimistic that we can achieve further sales growth next year.”

He added: “As we enter our new financial year, the general trading conditions remain challenging. We will continue to focus on the factors under our control and ensure that, as customers face the growing pressure of living costs, they can continue to rely on The Works as a destination for high-value products that inspire reading, learning, creativity and play.

“None of this would have been possible without the passion, dedication and patience of our brilliant colleagues, who have done more to deliver to customers.”