REG - TheWorks.co.uk PLC - Trading update for the 52 weeks ended 3 May 2026

Works co ukAnnouncement

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RNS Number : 1685F  TheWorks.co.uk PLC  21 May 2026

21 May 2026

TheWorks.co.uk plc

("The Works", the "Company" or the "Group")

Trading update for the 52 weeks ended 3 May 2026

A year of significant progress with FY26 Adjusted EBITDA ahead of market
expectations

The Works, the UK's leading specialist retailer of affordable, screen-free
activities for the whole family, is pleased to announce a Trading Update for
the 52 weeks ended 3 May 2026 (the "Period" or "FY26"). Further to the closure
of its transactional website announced on 20 March 2026, the Group is
reporting its financial performance based on its continuing operations(1).

Financial highlights

·   Total revenue of approximately £260m, a 3.2% increase against the
prior year (FY25: £252m), with growth achieved across all four key product
categories.

·   Like for like ("LFL") sales increased 3.3% in FY26, against the BRC
reported decline of 0.1% for the UK non-food retail market, with especially
strong LFL growth of 5.3% in Q4 against the BRC reported decline of 1.1%.

·  Sustained increase in product margin of +240bps year on year, reflecting
ongoing focus on supplier negotiations, tighter control of stock and
promotional markdowns, and product mix improvements.

·  Successful delivery of previously announced £2m cost reduction
programme, helping to partially offset industry-wide inflationary cost
pressures.

·   Reflecting the revenue growth, improvements in product margin and cost
reduction programme, pre-IFRS 16 Adjusted EBITDA is expected to be
approximately £14.0m (FY25: £9.5m), a 47% increase year on year and ahead of
current market expectations of £13.5m(3).

·   The Group ended FY26 with a net cash position of £3.6m (FY25: £4.1m),
above market expectations of £2.0m.

 

Strategic highlights

·   Strong progress in the first full year of the Group's Elevating The
Works growth strategy which, together with increasing relevance of The Works'
affordable, screen free activities for the whole family, drove outperformance
against the wider non-food retail market(2).

·   Successful implementation of a new store focused trading model in March
2026, concentrating the Group's focus on its core strength as a highly
successful bricks-and-mortar retailer. As previously announced, approximately
£2m of costs incurred in FY26 related to the closure of the online trading
channel are to be treated as Adjusting items(5).

·   Continued progress against store optimisation programme with a net five
new store openings. As a result, the Group operated 508 stores at the year-end
(FY25: 503 stores).

Summary & Outlook

The Group delivered a strong performance in FY26, despite growing
macroeconomic uncertainty over recent months. The particularly strong sales
growth in Q4 reflects the increasing relevance and strength of The Works brand
and proposition, supported by a positive impact on the Group's stores from the
closure of the online channel.

The Works has a clear growth strategy and brand purpose aligned to growing
demand for affordable screen-free activities. This, together with its plans to
open ten net new stores in FY27 and to deliver further product margin growth
and cost efficiencies, underpins the Board's confidence in achieving the
Group's recently upgraded FY27 guidance(4) and its medium-term EBITDA goal of
at least £22.5m in FY30.

Gavin Peck, Chief Executive Officer of The Works, commented:

"We delivered very strong strategic and financial progress during FY26. This
was driven by sales growth across all four of our key product categories
reflecting the diverse and increasing year-round appeal of the Group's product
proposition.

Our outperformance against the broader high-street supports our strong
conviction that The Works' brand and product proposition, which is aligned to
families' growing demand for affordable screen-free activities, is
increasingly relevant and underpins our plans for further growth.

While we remain mindful of the challenging macroeconomic environment, the
Board is confident that The Works is well placed to achieve further strategic
progress and profitable growth in FY27."

The Group's FY26 Preliminary results are expected to be announced on Thursday
23(rd) July 2026.

ENDS

 1    Note on reconciliation between continuing and discontinuing operations. FY26
      total revenue including discontinued operations was £274.0m (FY25: £277.0m).
      Pre-IFRS16 Adjusted EBITDA including, a £2.5m loss from discontinued
      operations is expected to be £11.5m (FY25: £9.5m).
 2    Data from the British Retail Consortium (BRC) showed non-food retail LFL
      decline of 0.1% for the 52-week period ended 3 May 2026.
 3    Market expectations for FY26 Pre-IFRS16 Adjusted EBITDA from continuing
      operations of £13.5m prior to publication of this announcement.
 4    Guidance for FY27 Pre-IFRS16 Adjusted EBITDA is £15.0m.

 5    Total Adjusting items of £2.5m includes a further £0.5m recognised in H1,
      reflecting the one-off cost of transitioning to the new third-party fulfilment
      provider prior to the decision to close the online trading channel.

 

Enquiries

 The Works                      Via Hudson Sandler

 Gavin Peck, CEO

 Rosie Fordham, CFO

 Hudson Sandler - Financial PR  theworks@hudsonsandler.com

 Alex Brennan/ Lucy Wollam      020 7796 4133
 Singer Capital Markets         020 7496 3000

 Peter Steel / Sara Hale

 

About The Works

The Works is the UK's leading specialist retailer of affordable, screen-free
activities for the whole family, providing customers with fantastic value
across four product categories: arts and crafts, stationery, toys and games,
and books.

The Group operates a network of over 500 stores in the UK & Ireland.

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