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The Works has upgraded its FY25 profit guidance and is expecting to deliver approximately adjusted EBITDA of £9.5m compared with £6m in FY24, following good progress with its turnaround strategy.
The group is also targeting profit growth in excess of current market expectations of the £10m adjusted EBITDA in FY26.
The Works revised its profit outlook as it made “amazing” initial progress on its new strategy, ‘Elevating The Works’, alongside its strong Q4 performance, sustained margin growth and ongoing operational efficiencies.
However, for the year ended 4 May 2025, total group revenues decreased by 2% to £277m (FY24: £283m) due to the prior year benefitting from an additional trading week and partly to trading out of eight fewer stores.
Its LFL sales also remained relatively flat at 0.8%, while its LFL store sales were up 2.3%. More customer-focussed events, new products across all key categories, improved store standards and product availability have been the “key drivers” of in-store growth.
Additionally, online sales declined by 12.1% due to the online fulfilment issues experienced during the festive period.
The group’s trading performance improved after Christmas, with Q4 total like-for-like (LFL) sales rising 6.4%, store LFL sales up 6.9%, and online improving to flat sales.
The board now expects that the “positive momentum seen since Christmas will continue”.
Gavin Peck, chief executive officer of The Works, said: “We are pleased to have made such significant progress in FY25, both strategically and financially, particularly given the challenging retail backdrop. Our sustained efforts to reduce costs and grow product margins, together with the strong sales growth post-Christmas, means we delivered profits ahead of expectations in FY25.
“Execution of our new strategy, ‘Elevating The Works’, is already delivering tangible results. As ever, we’ve got more work to do, but everyone at The Works is focused on fulfilling our ambition to become the favourite destination for affordable, screen-free activities for the whole family. We are confident that this, coupled with the strong momentum in our trading performance, will see us deliver further profit growth in FY26.”
