TheWorks.co.uk reinstates dividend after strong trading performance

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TheWorks.co.uk PLC on Friday said it delivered a ‘strong’ trading performance, allowing the company to reinstate its dividend.

Shares in the Birmingham-based stationary retailer were trading 13% higher at 57.00 pence in London on Friday.

Total sales for the year financial ended May 1 increased by 13% compared to the 2020 financial year and two-year like-for-like sales increased by 10%.

TheWorks said sales grew both online and in stores, noting that capitalising on online trends prompted ‘renewed customer interest’ in some previously best-selling books.

However, the company has experienced some headwinds in the period which slowed spending in recent months. TheWorks cited consumer spending slowing across many industries and a cyber security incident at the end of March.

Despite these challenges, the stationary retailer expects earnings before interest, tax, depreciation and amortisation to meet its unchanged forecast of £15.0 million. This would be up 39% from £10.8 million in 2020.

Further, TheWorks is reinstating its dividend, which is expected to be 2.4 pence per share. The board has not proposed a dividend since 2020. Once reinstated, the company plans to maintain a ‘progressive’ dividend policy.

TheWorks said that it has continued to work towards its strategic focus: ‘better, not just bigger’. During 2022, it opened 5 new stores, closed 7 and relocated 6. This initiative was to ‘improve the quality of the store estate.’

Looking forward, the company remains concerned about the external environment and how this might affect levels of consumer spending in the months ahead. Chief Executive Gavin Peck commented on ‘increasing cost-of-living pressures’.

However, Peck added that ‘[customers] can continue to rely on The Works as a destination for great value products to inspire reading, learning, creativity and play’.

TheWorks plans to issue its results in September, after giving it extra time in order to implement IT improvements following the cyber security incident.

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