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The Works has reported that total sales dipped slightly, from £124.2m to £123.8m in the 26-week period to 2 November, despite store like-for-like sales rising by 4% due to the impact of its strategy to improve layouts, ranges and marketing.
The group still maintains that it is on course to deliver full-year profits in line with expectations.
The discount retail chain opened a net two stores in the period, and also confirmed it remains on track for a net five openings this financial year.
Online revenues, which now make up less than 10% of sales, dropped by 36% after difficulties linked to the transition to a new third-party fulfilment provider. The Works said steps had been taken to limit the disruption, but reduced outbound capacity and higher costs were expected to continue through the peak trading season while a longer-term fix was developed.
Product margins improved by 3% compared with the same period last year. The firm said savings achieved through its £2m cost-reduction programme, including lower central staffing costs and efficiencies at its distribution centre following the installation of a mezzanine floor, had helped offset wider cost pressures. Net debt at the end of the period stood at £5.3m, compared with £8.5m a year earlier.
The Works said it remained focused on factors within its control and was “well positioned” for peak trading. Market expectations for the year include pre-IFRS 16 adjusted EBITDA of £11m.
Gavin Peck, chief executive of The Works, said: “We are pleased with the progress made in the first half of FY26, having delivered a number of important strategic initiatives, a strong performance in-store and ongoing margin growth.
“Our focus on delivering screen-free activities for the whole family is resonating with customers and, notwithstanding the challenging retail backdrop and ongoing online capacity constraints, we are on track to deliver further strategic and financial progress in the remainder of the financial year and beyond.”
Separately, The Works confirmed that independent non-executive director Simon Hathway will step down in early January after B&M announced his appointment to a full-time executive director role. Hathway joined the board in November 2024 and chairs the remuneration committee.
Steve Bellamy, chair of The Works, said: “We are grateful for the significant contribution Simon has made since joining the Board last year. His retail experience brought valuable insight at a crucial time for The Works as we launched our new strategy and capitalised on growth opportunities. On behalf of everyone at The Works, we wish Simon the best of luck in his new role at B&M.”
Hathway added: “I have greatly valued the opportunity to contribute to The Work’s exciting growth journey and to work alongside such a dedicated and talented team. The Company’s loyal customer base and strong value proposition leaves it well positioned in the months and years ahead.”
