Preliminary results - 52 weeks ended 4 May 2025

About this update from Theworks.co.uk Plc

[{"type":"text","content":"\n \n 22 July 2025 \n TheWorks.co.uk plc \n (\"The Works\", the \"Company\" or the \"Group\") \n Preliminary results for the 52 weeks ended 4 May 2025 \n Finished FY25 in line with recently upgraded market expectations, significant improvement in profitability underpinned by new strategy, well positioned to deliver further profit growth in FY26. \n TheWorks.co.uk plc, the retailer of affordable, screen-free activities for the whole family, announces its preliminary results for the 52 weeks ended 4 May 2025 (the \"period\" or \"FY25\"). \n Financial highlights \n \n \n \n \n ·              \n \n \n Delivered total revenue of £277m, a decrease of 2% from the prior year, which benefitted from an additional trading week. \n \n \n \n \n ·              \n \n \n Total like for like ( LFL) sales were ahead of the wider non-food retail market (1) , increasing by 0.8%. \n \n \n \n \n \n \n \n o  Store sales, which represent over 90% of total sales, continued to be the primary driver of growth, increasing 2.3% on a LFL basis, driven by more customer-focussed events, new products across all categories, improved store standards and product availability. \n \n \n \n \n \n \n \n o  Online sales declined by 12.1%, impacted by temporary capacity constraints at our third-party provider during peak and a focus on improving the profitability of this channel. \n \n \n \n \n \n \n \n o  Delivered a strong performance post-Christmas, with Q4 total LFL sales up 6.4%. \n \n \n \n \n ·              \n \n \n Pre-IFRS 16 Adjusted EBITDA rose 58% to £9.5m (FY24: £6m), which was in line with recently upgraded market expectations. Rising cost headwinds were offset through ongoing cost-saving action and sustained product margin growth (+210bps vs. FY24). \n \n \n \n \n ·              \n \n \n Profit before tax increased 20.3% to £8.3m (FY24: £6.9m). \n \n \n \n \n ·              \n \n \n Adjusted profit before tax of £4.6m (FY24: £3.2m) after adjusting for a £3.8m credit (FY24: £3.7m credit) (2) . \n \n \n \n \n ·              \n \n \n The Group ended FY25 with net cash of £4.1m (FY24: £1.6m). \n \n \n \n \n ·              \n \n \n The Board is not proposing a final dividend for FY25 with focus on investing for future growth. Future shareholder distributions will be kept under consideration as profitability improves further and net cash allows. \n \n \n \n \n ·              \n \n \n Trading in the first 11 weeks of FY26 has been strong, with LFL sales up 5% and continued margin growth. \n \n \n \n \n ·              \n \n \n Further profit growth expected in the year ahead - the Group is comfortable with recently upgraded market forecasts of pre-IFRS 16 Adjusted EBITDA of £11.0m in FY26. \n \n \n \n \n   \n \n \n \n \n \n \n \n FY25 \n \n \n FY24 \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n \n \n Revenue \n \n \n  277.0 \n \n \n  282.6 \n \n \n \n \n Revenue growth \n \n \n (2.0%) \n \n \n 0.9% \n \n \n \n \n LFL sales (3) \n \n \n 0.8% \n \n \n (0.9%) \n \n \n \n \n Pre-IFRS 16 Adjusted EBITDA (2) \n \n \n  9.5 \n \n \n  6.0 \n \n \n \n \n Pre-IFRS 16 Adjusted EBITDA margin (2) \n \n \n 3.4% \n \n \n 2.1% \n \n \n \n \n Profit before tax (2) \n \n \n 8.3 \n \n \n  6.9 \n \n \n \n \n Adjusted profit before tax \n \n \n 4.6 \n \n \n 3.2 \n \n \n \n \n Basic and diluted earnings per share \n \n \n 13.1 \n \n \n 10.2 \n \n \n \n \n Adjusted basic and diluted earnings per share \n \n \n 7.1 \n \n \n 4.2 \n \n \n \n \n Net cash at bank (4) \n \n \n 4.1 \n \n \n 1.6 \n \n \n \n \n   \n Business highlights \n \n \n \n \n ·              \n \n \n Launched new strategy in January 2025, 'Elevating The Works', which has ensured the business has both a clear plan and ambitious targets to deliver a step-change in performance. The early success of the strategy is evident in the underlying sales growth, strong store performance and profit growth in FY25. \n \n \n \n \n ·              \n \n \n Notable progress against our three strategic drivers: \n \n \n \n \n \n \n \n o  Growing brand fame : Launched a new approach to our customer campaigns, including more customer-focussed events that drove footfall to stores and increased the all-year-round appeal of The Works, including a \"Kids Favourites Event\" featuring popular kids' characters (including Bluey and Peppa Pig) as well as a \"Books are Magic\" event, which was timed to coincide with World Book Day. \n \n \n \n \n \n \n \n o  Improved customer convenience : Improved store standards and consistency across the estate, which has been a key driver of store LFL growth. Continued optimisation of store estate with 7 openings, 15 closures and 4 relocations, resulting in a higher quality and more profitable portfolio of 503 stores (FY24: 511 stores). \n \n \n \n \n \n \n \n o  Being a lean and efficient operator : Drove sustained product margin growth of 210bps by reducing our cost of goods sold through negotiations with suppliers, reduced markdown activity, more targeted promotional activity and control of product mix. Delivered significant cost-savings in FY25 due to the annualised benefit of action taken in FY24. Undertook a cost transformation project in FY25, with over £2.0m of further annualised cost savings identified for FY26. \n \n \n \n \n ·              \n \n \n Strengthened plc board with the appointment of Steve Bellamy as Chair and Simon Hathway as an Independent Non-Executive Director. \n \n \n \n \n ·              \n \n \n Placed 10 th in the 'Best Big Company to Work For', up from 15 th in the previous year, showing the strength of our culture and colleague engagement. \n \n \n \n \n   \n Current trading and outlook \n The positive trading momentum since Christmas has continued, with total LFL sales up 5.0% in the first 11 weeks of FY26 and good margin growth. This performance is in line with our expectations, and ahead of the wider non-food retail market (5) , reflecting the continued momentum from our strategic and operational progress building through FY25 and into FY26. \n The Board continues to be mindful of significant cost headwinds in FY26, primarily related to National Living and Minimum Wage inflation, and employers' National Insurance increases. However, with a clear strategy in place, the Group is well positioned to navigate these challenges and deliver further strategic and financial progress in the year ahead. \n In light of the strong FY25 performance, positive momentum that has carried into the new financial year and further cost savings identified for FY26, the Board expects to deliver pre-IFRS 16 Adjusted EBITDA in line with recently upgraded external forecasts of £11.0m. We remain on track to deliver sales in excess of £375m and EBITDA margin of at least 6% within five years. \n Gavin Peck, Chief Executive Officer of The Works, commented: \n \"We are delighted to have ended FY25 in line with recently upgraded market expectations in a year defined by ongoing uncertainty and fragile consumer confidence. This encouraging performance is a huge credit to the early success of our new strategy launched in January 2025, 'Elevating the Works', which is already delivering tangible results. It is also thanks to the continued hard work of our dedicated and passionate colleagues, who have worked hard to drive improvements across the business. \n \"Guided by our new strategy, we are focusing our efforts on becoming the favourite destination for affordable, screen-free activities for the whole family. This has significant relevance, particularly in a digital age when customers are looking for ways to connect and spend their time away from screens. We are pleased that the ongoing evolution of our proposition and newness throughout our ranges, has already resonated so well with customers. \n \"The strong trading delivered post-Christmas has continued into the start of our new financial year, with customers clearly loving our new Spring and Summer product ranges. This positive momentum, guided by our transformative strategy and energised team, leaves us well placed for further strategic and financial progress in FY26.\" \n Preliminary results presentation \n A copy of the FY25 Preliminary results presentation will shortly be made available on the Company's website ( https://corporate.theworks.co.uk/investors/ ). \n A presentation and Q&A for all existing and potential shareholders will be held via Investor Meet Company at 12.30pm. Investors can register here: \n https://www.investormeetcompany.com/theworkscouk-plc/register-investor \n \n \n \n \n Enquiries: \n TheWorks.co.uk plc \n Gavin Peck, CEO \n Rosie Fordham, CFO \n   \n \n \n   \n   \n via Sanctuary Counsel \n \n \n \n \n \n \n \n Sanctuary Counsel \n Rachel Miller \n Hannah Butler \n Yasmine Fowler \n \n \n   \n 0207 340 0395 \n \n \n   \n [email protected]         \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Singer Capital Markets (Nomad and Broker) \n Peter Steel \n   \n \n \n 020 7496 3000 \n \n \n \n \n \n \n \n   \n Footnotes: \n \n \n \n \n (1)                    \n \n \n Data from the British Retail Consortium (BRC) showed non-food retail LFL sales declined 0.1% in the 52-week period. \n \n \n \n \n (2)                    \n \n \n Adjusted profit figures exclude Adjusting items. See Note 2 (Alternative performance measures) and Note 3 (Adjusting items) of the condensed financial statements included in this RNS. \n \n \n \n \n (3)                    \n \n \n LFL sales growth is the growth in gross sales from stores which have been trading for the full financial period (current and previous year), and from the Group's online store. \n \n \n \n \n (4)                    \n \n \n Net cash at bank excludes finance leases and is stated on a pre-IFRS 16 basis. \n \n \n \n \n (5)                    \n \n \n Data from the British Retail Consortium (BRC) showed flat non-food retail LFL sales for May and June 2025. \n \n \n \n \n   \n Notes for editors: \n The Works is one of the UK's leading family-friendly value retailers of arts and crafts, stationery, toys, and books, offering customers a differentiated proposition as a value alternative to full price specialist retailers. Our ambition is to become the favourite destination for affordable, screen free activities for the whole family. The Group operates a network of over 500 stores in the UK & Ireland, as well as trading online at  TheWorks.co.uk . \n Chair report \n Introduction \n In the 2024 annual report I spoke of the strategy being under review and action being taken at The Works. The last year can be characterised both by significant change and progress across the business. I am very pleased that, under Gavin's leadership and due to the collective efforts of everyone at The Works, we have a new strategy that is starting to deliver tangible results. This is not only benefitting our customers but is enhancing the fundamentals of the business and delivered a significantly improved financial performance in FY25. Momentum built in the second half of FY25, which has carried forward into the new financial year, providing confidence that the business is on the right track to make further gains in the years to come. \n FY25 performance \n The retail backdrop was challenging throughout FY25, characterised by geopolitical uncertainty, fragile consumer confidence and rising business costs, particularly following the UK Government's Autumn Budget. Despite this, The Works delivered a much-improved FY25 performance by focusing on factors within our control and driving incremental improvements across the business. The underlying performance was strong, driven particularly by our stores, which tracked consistently ahead of the wider market and saw like for like (LFL) store sales accelerate by 6.9% in Q4. \n Although the business faced difficulties fulfilling online orders during peak, these issues were contained and the online performance improved significantly in Q4. Decisive action has already been taken, including the appointment of a new third-party provider, positioning the business well for the remainder of FY26 and beyond. \n The sustained efforts throughout the year to reduce costs and grow product margins, together with strong sales growth post-Christmas, means The Works delivered profits in line with recently upgraded market expectations for FY25. \n Strategy \n Our new strategy, 'Elevating The Works', launched in January 2025, ensures the business now has a clear plan and ambitious targets to deliver a step-change in performance. \n Excellent initial progress has been made on our three strategic growth drivers: growing our brand fame, improving customer convenience and being a lean and efficient operator. This transformation will take time, but momentum is building. As such, we remain on track to deliver sales in excess of £375m and EBITDA margin of at least 6% within five years. \n Our Board and leadership \n There have been a number of changes to the leadership at The Works over the last year. Our more streamlined Operating Board was embedded at the start of FY25 and we have also seen changes at PLC Board level. \n I joined The Works in July 2024, succeeding Carolyn Bradley as Chair, and have worked closely with Gavin and the leadership team to develop and ensure delivery of the new strategic plans and targets. \n Three other Board members left The Works in FY25. I would like to thank Catherine Glickman for her six-year contribution to The Works and John Goold and Mark Kirkland who joined the Board on a temporary basis to provide additional guidance during a period of change. \n We further strengthened the PLC Board, with Simon Hathway joining as an Independent Non-Executive Director in November 2024. His retail experience and counsel has already proved invaluable, including in the development and roll-out of our new strategy. \n Since the period end, Harry Morley announced his intention to step down as Senior Independent Non-Executive Director at the upcoming AGM. In line with the Board's succession plans, a recruitment process to identify Harry's successor is well advanced. \n We wish Harry, and all our departed Board members, well and are confident that our refreshed Board will continue to deliver for the business and shareholders, in the years ahead. \n Capital distributions \n We have not declared a final dividend for FY25 as we are focussed on investing in our business and delivering our new strategy. Future shareholder distributions, including share buybacks, will continue to be assessed as profitability further improves, investment priorities develop and funding allows. \n Outlook \n The Board is mindful of continued cost headwinds in the year ahead, however, we are confident that we will see further LFL sales growth, realise further benefits from action to grow product margins, reduce costs and execute our new strategy effectively. As such, we expect further profit growth and are comfortable with external forecasts of pre-IFRS 16 Adjusted EBITDA of £11.0m in FY26. \n Steve Bellamy \n Chair \n 22 July 2025 \n   \n CEO report \n Introduction \n We made significant strategic and financial progress in FY25, which was particularly pleasing given the challenging retail backdrop. Our underlying performance was strong, with momentum building steadily throughout the year and our new strategy launched in January 2025, 'Elevating The Works', has already started to deliver tangible results. Our sustained efforts to reduce costs and grow product margins, together with strong sales growth post-Christmas, means we delivered profits in line with recently upgraded market expectations in FY25. \n Everyone at The Works is focussed on fulfilling our ambition to become the favourite destination for affordable, screen-free activities for the whole family and this collective drive, coupled with our strong trading momentum, stands us in good stead to deliver further profit growth and shareholder value in FY26 and beyond. \n FY25 performance \n The backdrop to FY25 was challenging, with consumer confidence remaining fragile throughout, particularly following the government's Autumn Budget, ongoing geopolitical uncertainty and significant cost headwinds. Despite this, we made significant financial progress in FY25, particularly in the second half of the year. \n Total revenue was lower by 2.0% at £277m (FY24: £283m) due to the prior year benefitting from an additional trading week and the continued optimisation of the store estate (a net 8 store closures in FY25). Our FY25 underlying performance was strong, with total like for like (LFL) sales up 0.8%, and ahead of the wider non-food retail market, which saw a LFL sales reduction of 0.1% over the period. \n Our stores, which comprise over 90% of sales, saw LFL sales up 2.3%. Store performance was driven by the execution of our strategic plans, including more customer-focussed events, new products across all categories, improved store standards and product availability. Online sales declined by 12.1% due to the online fulfilment issues experienced during the festive period and our focus on driving profitable growth through this channel. \n Our LFL performance improved throughout the year, with particularly strong growth post-Christmas, reflecting the momentum from our strategic and operational progress building through the year. In Q4, total LFL sales grew by 6.4%, store LFL sales by 6.9% and online improved to flat sales, with the online capacity issues largely resolved post-Christmas.  \n We faced rising cost headwinds in FY25, which we were able to offset due to ongoing cost-saving action and sustained product margin growth (+210bps vs. FY24) driven by supplier negotiations, reduced markdown activity through better stock management, more targeted promotional activity and control of product mix. Whilst stocks were higher at year end, the overall quality improved significantly year-on-year and there was no need for a Spring sale. \n This, combined with the improved sales performance in Q4, resulted in pre-IFRS 16 Adjusted EBITDA up 58% to £9.5m (FY24: £6.0m), which was in line with recently upgraded market expectations of £9.5m. \n Strategy \n With a new leadership structure in place, including a more streamlined Operating Board and refreshed plc Board, we took the decision to evolve our former 'Better, not just Bigger' strategy. We recognised the need for a clear plan to transform the business with the ambition of driving sales growth, improving profit margins and delivering strong shareholder returns. \n In January 2025 we announced our new strategy, 'Elevating The Works', which is focussed on The Works becoming the favourite destination for affordable, screen free activities for the whole family and is underpinned by three strategic drivers: growing our brand fame, improving customer convenience and being a lean and efficient operator. \n The successful execution of this strategy will have a transformative impact on the business, enabling us to deliver sales in excess of £375m and an EBITDA margin of at least 6% within five years. There remains much to do to reach these targets, however, with the early progress made following the launch of the new strategy, we have a clear runway to achieve these plans. \n Growing brand fame \n We know The Works is a favourite destination amongst our loyal customers, but we want even more people to discover us and love what we do. We have made great progress on clarifying what we want to be known for as a brand and to bring this to life with our customers, as outlined below, which has been a key driver of the strong in-store sales and building momentum post-Christmas. \n \n \n \n \n ·              \n \n \n Completed a brand project to provide greater clarity on who we are, what we want to be famous for and the role we can play for customers, culminating in the creation of our #TimeWellSpent strapline.  \n \n \n \n \n ·              \n \n \n Launched a new approach to our customer campaigns, including more customer-focussed events, which successfully drove footfall to stores. In Spring 2025 we held a \"Kids Favourites Event\" featuring popular kids' characters (including Bluey and Peppa Pig) as well as a \"Books are Magic\" event, which was timed to coincide with World Book Day. \n \n \n \n \n ·              \n \n \n Ongoing evolution of our product proposition, including refreshing all product categories, with newness in Spring ranges capturing customers' imaginations and driving sales. There has been strong sales growth in our Toys & Games and adult fiction books categories, with the latter driven by the success of new releases, popular BookTok titles and exclusive editions. \n \n \n \n \n ·              \n \n \n Taken action to grow the all-year-round attraction of the brand and reduce the seasonality of the business. This includes improved Back-to-School and Halloween ranges, as well as cementing our reputation as the go-to destination for screen-free activities around the school holidays. \n \n \n \n \n   \n Improving customer convenience \n We want to attract and retain loyal customers by making it even easier to shop with us. Progress in FY25 included: \n \n \n \n \n ·              \n \n \n Improved product availability and better distribution of stock across the estate, with particularly strong performance in our top turnover stores, building on progress made since our investment in a new stock allocation system and our merchandising team. \n \n \n \n \n ·              \n \n \n Established enhanced space analysis to inform future space planning opportunities, including utilising larger stores to trial new ranges. Further trials are planned for H1 FY26, which will inform opportunities for the years ahead. \n \n \n \n \n ·              \n \n \n Improved store standards and consistency across the estate, driven by the retail leadership restructure at the start of FY25. This has significantly improved consistency of communication, execution and accountability across the store estate, which has been a key driver of store LFL growth. \n \n \n \n \n ·              \n \n \n Ongoing optimisation of the store estate, with 7 new openings, 15 closures and 4 relocations. We ended the year with a smaller, higher quality and more profitable portfolio of 503 stores (FY24: 511 stores). Over the last five years, 150 stores (c. 30% of the estate) have either been newly opened, relocated or refitted, helping to improve the consistency and the overall profitability of our store estate. \n \n \n \n \n ·              \n \n \n Further improvements to the online customer journey, including working to reduce key frictions, such as adding products to basket, and improving product pages and imagery to enhance customer experience and conversion. \n \n \n \n \n   \n Being a lean and efficient operator \n To continue offering customers great value and making sustainable profits, we need to keep our costs low and be an increasingly lean and efficient business. Progress includes: \n \n \n \n \n ·              \n \n \n Significantly reducing our cost of goods sold, through negotiations with suppliers. Together with reduced markdown activity, more targeted promotional activity and control of product mix this supported a 210bps improvement in product margin on FY24. \n \n \n \n \n ·              \n \n \n Delivered significant cost-savings in FY25 due to the annualised benefit of action taken in FY24, including restructuring the Distribution Centre (DC) management and successfully implementing a new way of working in our DC, ending the Together Rewards loyalty scheme, restructuring the Operating Board and transferring The Works' stock market listing to AIM. \n \n \n \n \n ·              \n \n \n Delivered further rent reductions on lease renewals in FY25, ensuring we remain competitive and profitable at store level. \n \n \n \n \n ·              \n \n \n In addition to ongoing cost saving action, we undertook a cost transformation project in FY25, with over £2.0m annualised further cost savings identified for FY26, which will help to offset ongoing cost headwinds. We expect to identify further savings in FY26 and beyond. \n \n \n \n \n ·              \n \n \n Completed rollout of new EPoS software in stores, a key enabler for exploring new hardware in FY26 and improving efficiency of colleagues on the shop floor. \n \n \n \n \n   \n Board and leadership changes \n We embedded our restructured Operating Board at the beginning of the financial year, strengthening the leadership of the business as we developed, and now implement, our new strategy. Doing so has enabled more streamlined decision making and ways of working, supported better cross-functional collaboration and enabled Senior Leaders to step up, grow and take on more responsibility. \n There have also been a number of changes in our PLC Board during FY25. I would like to take this opportunity to thank those who have departed and to welcome our new Board members, who bring a wealth of experience. \n Colleagues \n I am proud that The Works placed 10 th in the 'Best Big Companies to Work For', up from 15 th the previous year. This is particularly impressive given the significant amount of change the business has undergone over recent years. It is credit to our leadership and to everyone at The Works for the way in which colleagues have rallied together during times of difficulty and delivered such significant financial and strategic progress in FY25. The unique culture we have at The Works is something we must never take for granted. It is our collective responsibility to nurture it and ensure it continues to grow. \n ESG \n Underpinning our new strategy are our People and Planet commitments - our way of making positive and sustainable changes for our people, our communities and our planet. We pride ourselves on being an ethical and efficient business, and during FY25 expanded our sourcing function to support the continued delivery of our supplier strategy, engagement and performance. We also rolled out the next phase of our Ethical Compliance Programme across our entire active supplier base, which will help to ensure we maintain our commitment to sourcing our products ethically and in a legally compliant way. \n Good progress has also been made against our Diversity and Inclusion (D&I) strategy. Our wellbeing-related blogs on MyWorks and enhanced D&I training has been well-received by colleagues, as evidenced by improved results of our FY25 D&I survey.  \n Outlook \n We are mindful of significant cost headwinds in FY26, primarily due to changes to employers' National Insurance contributions and higher National Living and Minimum Wages. However, by maintaining our focus on the factors within our control, and continuing to execute our new strategy, we expect to offset these headwinds in the year ahead. \n We have fantastic new products landing throughout the year, which, coupled with the steps we are taking to improve customer experience, will help to drive further sales growth. Alongside ongoing action to grow margins and reduce costs, this positions us well to deliver further strategic and financial progress in the year ahead. \n As such, we expect further profit growth and are comfortable with external forecasts of pre-IFRS 16 Adjusted EBITDA of £11.0m in FY26. Our strong FY25 performance and the forward momentum we have carried into FY26, supported by early delivery on our new strategy, also gives us confidence that we can deliver on our five-year targets, transform the business and deliver shareholder returns. \n Gavin Peck \n Chief Executive Officer \n 22 July 2025 \n   \n Financial Report \n Overview \n This report covers the 52-week period ended 4 May 2025 (\"FY25\", or \"the period\") and refers to the comparative \"FY24\" period of the 53 weeks ended 5 May 2024. Significant financial and strategic progress was made during FY25 against a challenging consumer backdrop. \n   \n \n \n \n \n \n \n \n FY25 \n \n \n FY24 \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n \n \n Revenue \n \n \n  277.0 \n \n \n  282.6 \n \n \n \n \n Revenue growth \n \n \n (2.0%) \n \n \n 0.9% \n \n \n \n \n LFL sales growth (1) \n \n \n 0.8% \n \n \n (0.9%) \n \n \n \n \n Pre-IFRS 16 Adjusted EBITDA (2) \n \n \n  9.5 \n \n \n  6.0 \n \n \n \n \n Pre-IFRS 16 Adjusted EBITDA Margin (2) \n \n \n 3.4% \n \n \n 2.1% \n \n \n \n \n Profit before tax \n \n \n 8.3 \n \n \n  6.9 \n \n \n \n \n Adjusted profit before tax (2) \n \n \n 4.6 \n \n \n 3.2 \n \n \n \n \n Net cash at bank (3) \n \n \n 4.1 \n \n \n 1.6 \n \n \n \n \n   \n \n \n \n \n (1)                    \n \n \n LFL sales growth is the growth in gross sales from stores which have been trading for the full financial period (current and previous year), and from the Group's online store. \n \n \n \n \n (2)                    \n \n \n Adjusted profit figures exclude Adjusting items. See notes 2 (Alternative performance measures) and 3 (Adjusting items) of the condensed financial statements included in this RNS. \n \n \n \n \n (3)                    \n \n \n Net cash at bank excludes finance leases and is stated on a pre-IFRS 16 basis. \n \n \n \n \n   \n Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. \n   \n Revenue \n Total revenue was lower by 2.0% to £277m (FY24: £283m), due to: \n \n \n \n \n ·              \n \n \n The prior year benefitting from an additional trading week (53 weeks in FY24 vs 52 weeks in FY25), which accounted for approximately half of the FY25 reduction. \n \n \n \n \n ·              \n \n \n Our focus on optimisation of the store estate, with 7 new openings, 15 closures and 4 relocations. We ended the year with a smaller, higher quality and more profitable portfolio of 503 stores (FY24: 511 stores). \n \n \n \n \n   \n Total LFL sales increased by 0.8%, ahead of the wider non-food retail market (1) , with store LFLs increasing by 2.3% and online sales decreasing by 12.1%. \n \n \n \n \n LFL sales growth \n \n \n Stores \n \n \n Online \n \n \n Total \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Q1 \n \n \n (1.6%) \n \n \n 0.4% \n \n \n (1.4%) \n \n \n \n \n Q2 \n \n \n 2.9% \n \n \n (21.4%) \n \n \n (0.3%) \n \n \n \n \n H1 \n \n \n 0.9% \n \n \n (14.7%) \n \n \n (0.8%) \n \n \n \n \n Q3 \n \n \n 1.5% \n \n \n (13.5%) \n \n \n (0.3%) \n \n \n \n \n Q4 \n \n \n 6.9% \n \n \n 0.0% \n \n \n 6.4% \n \n \n \n \n H2 \n \n \n 3.5% \n \n \n (9.9%) \n \n \n 2.1% \n \n \n \n \n Full year \n \n \n 2.3% \n \n \n (12.1%) \n \n \n 0.8% \n \n \n \n \n   \n \n \n \n \n (1)                    \n \n \n Data from the British Retail Consortium (BRC) showed a non-food retail LFL decline of 0.1% for the 52-week period. \n \n \n \n \n   \n \n \n \n \n ·              \n \n \n H1 - reported a 0.8% decline in LFL sales, reflecting the challenging external market, however sales remained ahead of the wider market (BRC reported non-food retail LFL had declined by 1.3% for the same period). Store LFL sales growth was strong in Q2, up 2.9% reflecting much improved Back to School and Halloween ranges and continued strong growth in Adult Fiction books, bringing store LFL sales growth for H1 to 0.9%. A planned reduction in September sale activity adversely impacted sales, particularly online, but delivered a much stronger margin rate. Online sales were also impacted by the operational challenges experienced at our third-party operated online fulfilment centre towards the end of the quarter and subsequent action taken to prioritise improving profitability. As a result, online LFL sales declined 14.7% in H1. \n \n \n \n \n \n \n \n \n \n \n \n \n ·              \n \n \n H2 - reported LFL sales growth of 2.1%, which continued to outperform the non-food retail market (BRC reported non-food retail LFL average growth of 1.2%). This reflected a resilient store performance over the festive period with store LFL sales growth of 1.5% in Q3, which was supported by much-improved Christmas across our stores and in our retail Distribution Centre. Online sales declined by 13.5% in Q3 as a result of constrained performance over the festive period due to the aforementioned online fulfilment issues. We delivered a strong performance post-Christmas, with Q4 store LFL sales growth of 6.9% and online improving to flat LFL sales. This strong performance was supported by the ongoing evolution of our product proposition and a new approach to our customer campaigns, including in-store events which drove increased footfall. \n \n \n \n \n   \n Store numbers \n \n \n \n \n   \n \n \n FY25 \n \n \n FY24 \n \n \n \n \n Stores at beginning of period \n \n \n 511 \n \n \n 526 \n \n \n \n \n Opened in the period \n \n \n 7 \n \n \n 9 \n \n \n \n \n Closed in the period \n \n \n (15) \n \n \n (24) \n \n \n \n \n Relocated (excluded from opened/closed above, NIL net effect on store numbers) \n \n \n 4 \n \n \n 5 \n \n \n \n \n Stores at End of period \n \n \n 503 \n \n \n 511 \n \n \n \n \n   \n   \n We traded from 503 stores at the period end (FY24: 511 stores), of which 98% are profitable on an annual basis. Our store estate represents over 90% of sales and recorded a strong LFL performance in the period. We continued to optimise our store estate during FY25, which included closing low-profit and loss-making stores where we were unable to agree suitable terms with landlords, whilst continuing to open new stores that fit our profile. The 11 new stores opened in the period (including relocations) performed well overall and we anticipate that they will see a typical payback of around eighteen months. \n Gross profit \n \n \n \n \n   \n \n \n FY25 \n \n \n   \n \n \n FY24 \n \n \n   \n \n \n Variance \n \n \n Variance \n \n \n \n \n   \n \n \n £m \n \n \n % of revenue \n \n \n   \n \n \n £m \n \n \n % of revenue \n \n \n   \n \n \n £m \n \n \n % \n \n \n \n \n   \n \n \n \n \n \n \n \n Revenue \n \n \n 277.0 \n \n \n   \n \n \n \n \n \n 282.6 \n \n \n   \n \n \n \n \n \n (5.6) \n \n \n (2.0) \n \n \n \n \n Less: Cost of goods sold \n \n \n (112.5) \n \n \n \n \n \n \n \n \n (120.5) \n \n \n \n \n \n \n \n \n 8.0 \n \n \n 6.6 \n \n \n \n \n Product gross margin \n \n \n 164.5 \n \n \n 59.4 \n \n \n   \n \n \n 162.1 \n \n \n 57.3 \n \n \n   \n \n \n 2.4 \n \n \n 1.5 \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Store payroll \n \n \n (49.9) \n \n \n (18.0) \n \n \n \n \n \n (50.2) \n \n \n (17.8) \n \n \n \n \n \n 0.3 \n \n \n 0.5 \n \n \n \n \n Store property and establishment costs \n \n \n (50.3) \n \n \n (18.2) \n \n \n \n \n \n (49.3) \n \n \n (17.4) \n \n \n \n \n \n (1.0) \n \n \n (2.0) \n \n \n \n \n Store PoS and transaction fees \n \n \n (2.5) \n \n \n (0.9) \n \n \n \n \n \n (2.7) \n \n \n (1.0) \n \n \n \n \n \n 0.2 \n \n \n 7.4 \n \n \n \n \n Online variable costs  \n \n \n (13.8) \n \n \n (5.0) \n \n \n \n \n \n (15.8) \n \n \n (5.6) \n \n \n \n \n \n 2.0 \n \n \n 12.7 \n \n \n \n \n Store depreciation (excluding IFRS 16) \n \n \n (2.7) \n \n \n (1.0) \n \n \n \n \n \n (1.9) \n \n \n (0.7) \n \n \n \n \n \n (0.8) \n \n \n (42.1) \n \n \n \n \n Adjusting items \n \n \n 4.4 \n \n \n 1.6 \n \n \n \n \n \n 3.7 \n \n \n 1.3 \n \n \n \n \n \n 0.7 \n \n \n 18.9 \n \n \n \n \n IFRS 16 impact (excluding Adjusting items) \n \n \n 4.1 \n \n \n 1.5 \n \n \n \n \n \n 5.8 \n \n \n 2.0 \n \n \n \n \n \n (1.7) \n \n \n (29.3) \n \n \n \n \n Gross Profit Per Financial Statements \n \n \n 53.8 \n \n \n 19.4 \n \n \n   \n \n \n 51.8 \n \n \n 18.3 \n \n \n   \n \n \n 2.0 \n \n \n 3.9 \n \n \n \n \n   \n   \n   \n Product gross margin increased to 59.4% in FY25 (FY24: 57.3%), reflecting action taken to prioritise margin growth from the end of FY24, with notable factors as follows: \n \n \n \n \n ·              \n \n \n Significant growth as a result of negotiations with suppliers, focussed control of product mix, better stock management and reduced promotional activity. \n \n \n \n \n ·              \n \n \n The hedged FX rate on payments made in US dollars was favourable year-on-year. The FY25 hedged US dollar: GB pound rate was 1.26 versus 1.22 in FY24. \n \n \n \n \n ·              \n \n \n Adverse FY25 container freight rates versus FY24 rates, which created a headwind during the year due to the disruption in the Red Sea. Average container rates paid in FY25 were $4.4k versus FY24 of $1.9k. \n \n \n \n \n   \n Store payroll costs decreased by £0.3m, in part due to 52 weeks of trading in FY25 (53 weeks in FY24). The one-week shorter period reduced costs by £0.9m but was partially offset by the impact of the 9.8% increase in the National Living and Minimum Wage ('NLMW') in April 2024. This created an additional cost of £4.0m, which was mostly offset by a store labour hours efficiency programme. \n Store property and establishment costs increased by £1.0m. FY24 was a 53-week period and the underlying increase in costs was £2.1m as a result of: \n \n \n \n \n ·              \n \n \n Rents increasing by £0.8m. Savings from the renegotiation of leases expiring in FY25 across the LFL store estate were £0.7m partially offsetting a £1.7m headwind due to COVID-19 related rent relief credits released in the prior period. \n \n \n \n \n ·              \n \n \n An additional £0.8m dilapidation provision recognised with respect to expected costs for planned store closures as part of the store optimisation programme. \n \n \n \n \n ·              \n \n \n Inflationary rates and service charge costs were partially offset by reducing electricity costs. \n \n \n \n \n   \n Online variable costs decreased by £2.0m. During the first half of the year, efficiencies were delivered as a result of the move to an automated picking process for online fulfilment, however, during the second half of the period our third-party online fulfilment centre faced significant and unexpected operational challenges. This affected capacity and resulted in significantly increased costs per order. Due to these operational challenges, we proactively optimised online sales which resulted in a saving in digital marketing costs, and lower parcel delivery and packaging costs due to significantly reduced outbound volumes year-on-year.  \n £1.2m of exceptional fulfilment costs were incurred in relation to higher costs per order versus planned levels due to the third-party service disruption and these have been included as an adjusting item in the period. See Notes 3 (Adjusting items) of the attached condensed financial statements. \n Operating profit \n \n \n \n \n   \n \n \n FY25 \n \n \n   \n \n \n FY24 \n \n \n   \n \n \n Variance \n \n \n Variance \n \n \n \n \n   \n \n \n £m \n \n \n % of revenue \n \n \n   \n \n \n £m \n \n \n % of revenue \n \n \n   \n \n \n £m \n \n \n % \n \n \n \n \n   \n \n \n \n \n \n \n \n Gross profit per financial statements \n \n \n 53.8 \n \n \n 19.4 \n \n \n   \n \n \n 51.8 \n \n \n 18.3 \n \n \n   \n \n \n 2.0 \n \n \n 3.9 \n \n \n \n \n Distribution expenses \n \n \n (11.5) \n \n \n (4.2) \n \n \n \n \n \n (12.6) \n \n \n (4.4) \n \n \n \n \n \n 1.1 \n \n \n 8.7 \n \n \n \n \n Distribution depreciation \n \n \n (0.1) \n \n \n (0.0) \n \n \n \n \n \n (0.2) \n \n \n (0.1) \n \n \n \n \n \n 0.1 \n \n \n 50.0 \n \n \n \n \n Distribution Costs per financial statements \n \n \n (11.6) \n \n \n (4.2) \n \n \n   \n \n \n (12.7) \n \n \n (4.5) \n \n \n   \n \n \n 1.1 \n \n \n 8.7 \n \n \n \n \n Administrative expenses \n \n \n (26.9) \n \n \n (9.7) \n \n \n \n \n \n (25.6) \n \n \n (9.0) \n \n \n \n \n \n (1.3) \n \n \n (5.1) \n \n \n \n \n Administrative depreciation \n \n \n (2.1) \n \n \n (0.8) \n \n \n \n \n \n (2.4) \n \n \n (0.8) \n \n \n \n \n \n 0.3 \n \n \n 12.5 \n \n \n \n \n Adjusting Items \n \n \n (0.6) \n \n \n (0.2) \n \n \n \n \n \n 0.0 \n \n \n 0.0 \n \n \n \n \n \n (0.6) \n \n \n (100.0) \n \n \n \n \n IFRS 16 impact (excluding Adjusting items) \n \n \n 0.6 \n \n \n 0.2 \n \n \n \n \n \n 0.3 \n \n \n 0.1 \n \n \n \n \n \n 0.3 \n \n \n 100.0 \n \n \n \n \n Administrative Costs per financial statements \n \n \n (29.0) \n \n \n (10.5) \n \n \n   \n \n \n (27.7) \n \n \n (9.8) \n \n \n   \n \n \n (1.3) \n \n \n (4.7) \n \n \n \n \n Operating profit per financial statements \n \n \n 13.1 \n \n \n 4.7 \n \n \n   \n \n \n 11.4 \n \n \n 4.0 \n \n \n   \n \n \n 1.7 \n \n \n 14.9 \n \n \n \n \n   \n Distribution costs (before depreciation and IFRS 16), comprising picking stock and delivering it to stores, decreased by £1.1m compared with the prior period. Efficiencies continued to be driven from implementation of improved ways of working in the retail Distribution Centre offsetting the April 2024 NLMW increases, with costs also benefiting from 52 weeks of trading in FY25 (53 weeks in FY24). \n Administration costs (before depreciation and IFRS 16) increased by £1.3m, due in part to £0.8m of bonuses payable to colleagues reflecting the improved performance year-on-year (FY24: nil). The prior period costs were also flattered by a release of a VAT provision and lower long term incentive employee share plan charges. \n Operating profit reconciliation to pre-IFRS 16 Adjusted EBITDA \n   \n \n \n \n \n \n \n \n FY25 \n \n \n   \n \n \n FY24 \n \n \n   \n \n \n Variance \n \n \n Variance \n \n \n \n \n   \n \n \n £m \n \n \n % of revenue \n \n \n   \n \n \n £m \n \n \n % of revenue \n \n \n   \n \n \n £m \n \n \n % \n \n \n \n \n   \n \n \n \n \n \n \n \n Operating profit per financial statements \n \n \n 13.1 \n \n \n 4.7 \n \n \n   \n \n \n 11.4 \n \n \n 4.0 \n \n \n   \n \n \n 1.7 \n \n \n 14.9 \n \n \n \n \n Add back depreciation, amortisation included in Operating profit \n \n \n 4.9 \n \n \n 1.8 \n \n \n \n \n \n 4.4 \n \n \n 1.6 \n \n \n \n \n \n 0.5 \n \n \n 11.4 \n \n \n \n \n Less IFRS 16 included in Operating profit (excl. Adjusting Items) \n \n \n (4.7) \n \n \n (1.7) \n \n \n \n \n \n (6.0) \n \n \n (2.1) \n \n \n \n \n \n 1.3 \n \n \n 21.7 \n \n \n \n \n Less Adjusting items (1) \n \n \n (3.8) \n \n \n (1.4) \n \n \n \n \n \n (3.7) \n \n \n (1.3) \n \n \n \n \n \n (0.1) \n \n \n (2.7) \n \n \n \n \n Pre-IFRS 16 Adjusted EBITDA \n \n \n 9.5 \n \n \n 3.4 \n \n \n   \n \n \n 6.0 \n \n \n 2.1 \n \n \n   \n \n \n 3.5 \n \n \n 58.3 \n \n \n \n \n   \n \n \n \n \n (1)                    \n \n \n Adjusted profit figures exclude Adjusting items. See Notes 2 (Alternative performance measures) and 3 (Adjusting items) of the attached condensed financial statements . \n \n \n \n \n   \n Depreciation, amortisation and IFRS 16 adjustments \n Depreciation and amortisation increased £0.5m year-on-year as a result of lower impairment charges. \n The impact of IFRS 16 adjustments were £1.3m lower year-on-year primarily due to lower rental charges and therefore a lower IFRS16 adjustment. Refer to Note 2 (Alternative performance measures (\"APMs\")) of the attached condensed financial statements for a reconciliation of pre-IFRS 16 EBITDA to operating profit. \n Adjusting items were a £3.8m credit in FY25 (FY24: £3.7m credit) and include exceptional fulfilment costs of £1.2m (FY24: nil) as noted above. Other exceptional items include £0.7m of central support centre restructuring costs as part of the Group's cost saving actions. These costs are more than offset by a credit of £6.5m (FY24: credit £1.4m), due to the reversal of impairment charges relating to the notional right-of-use assets created as a result of application of the IFRS 16 accounting standard and a loss of £0.8m (FY24: £3.5m profit) on disposal of right-of-use assets and lease liabilities, with these two items requiring elimination in the calculation of Pre-IFRS 16 Adjusted EBITDA. This is described in note 10 of the condensed financial statements included in this announcement. \n A reconciliation of operating profit to EBITDA can be found in note 2 of the condensed financial statements included in this announcement. \n Net financing expense \n Net financing costs in the period were £4.8m (FY24: £4.5m), mostly relating to IFRS 16 notional interest on the calculated lease liability. \n Interest expense relating to bank facilities was £0.7m (FY24: £0.5m) and included facility availability charges and amortisation of the cost of setting up the facility. The higher interest charge reflects usage of the rolling credit facility to manage the timing of stock intake so that trading was not adversely impacted as a result of longer transit times from China due to the disruption in the Red Sea. \n Profit before tax \n Profit before tax was £8.3m (FY24: £6.9m) which includes the £3.8m credit (FY24: £3.7m credit) for Adjusting items (described above and in Note 3 (Adjusting items)). \n Tax \n The Group's total income tax charge in respect of the period was £0.2m (FY24: £0.5m). The effective tax rate on the total profit before tax was 2.0% (FY24: 7.8%) whilst the effective tax rate on the total profit before Adjusting items was 3.6% (FY24: 17.0%). The difference between the total effective tax rate and the Adjusted tax rate relates to fixed asset impairment charges and reversals within Adjusting items being non-deductible for tax purposes. \n The current year tax charge recognised is driven by deferred tax movements related to lease balances. \n Earnings per share \n The basic and diluted earnings per share for the period were 13.1 pence (FY24: 10.2 pence). Adjusted basic and diluted earnings per share for the period were 7.1 pence (FY24: 4.2 pence). \n Capital expenditure \n Capital expenditure in the period was £5.0 million (FY24: £5.8m). \n   \n \n \n \n \n \n \n \n FY25 \n \n \n FY24 \n \n \n Variance \n \n \n \n \n   \n \n \n £'m \n \n \n £'m \n \n \n £m \n \n \n \n \n New stores and relocations \n \n \n (1.5) \n \n \n (1.6) \n \n \n 0.1 \n \n \n \n \n Store refits, lease renewal and maintenance \n \n \n (1.5) \n \n \n (2.3) \n \n \n 0.8 \n \n \n \n \n IT hardware and software \n \n \n (1.7) \n \n \n (1.7) \n \n \n - \n \n \n \n \n Warehouse \n \n \n (0.2) \n \n \n (0.1) \n \n \n (0.1) \n \n \n \n \n Other \n \n \n (0.1) \n \n \n (0.1) \n \n \n - \n \n \n \n \n Total capital expenditure \n \n \n (5.0) \n \n \n (5.8) \n \n \n 0.8 \n \n \n \n \n   \n \n \n \n \n ·              \n \n \n The net investment in new stores and relocations reduced by £0.1m compared with FY24. 7 new stores were opened and 4 stores relocated to new units (FY24: 9 new stores, 5 relocations), with the higher net investment per store reflecting reduced landlord contributions and cost inflation. \n \n \n \n \n ·              \n \n \n The net investment in store refits reduced by £0.8m compared with FY24. The quantity of refits was lower in FY25 (6 refits) vs FY24 (20 refits), reflecting the impact of the decision taken at the beginning of FY24 to reduce refits to conserve cash. This saving was offset, in part, by wider cost inflation increasing the relative cost per refit. \n \n \n \n \n   \n Inventory \n Stock was valued at £35.0m at the end of the period (FY24: £31.4m), an increase of £3.6m. The increased gross stock level compared to the prior period reflects investment in new stock across strong performing ranges to support higher sales and increased freight rates within average cost prices. The stock value represents a lower stock provision due to the timing of four-wall stock counts in stores occurring closer to the year-end (which reduces the shrinkage provision year-on-year) and less terminal stock than the prior year resulting in a lower obsolescence provision. Increased stock in transit reflects longer transit times from China due to the continued challenges in the Red Sea. \n   \n \n \n \n \n   \n \n \n FY25 \n \n \n FY24 \n \n \n \n \n   \n \n \n £m \n \n \n £m \n \n \n \n \n Gross stock \n \n \n 30.1 \n \n \n 28.4 \n \n \n \n \n Less: provisions \n \n \n (1.0) \n \n \n (1.9) \n \n \n \n \n Stock net of provisions \n \n \n 29.1 \n \n \n 26.5 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Stock in transit \n \n \n 5.9 \n \n \n 4.9 \n \n \n \n \n Stock per balance sheet \n \n \n 35.0 \n \n \n 31.4 \n \n \n \n \n   \n Cash flow                  \n The Group ended the period with net cash at bank of £4.1m (FY24: £1.6m cash), The table below shows a summarised pre IFRS 16 presentation of cash flow. The net cash inflow before exchange rate movements for the period was £2.9m (FY24: outflow of £7.9m). \n   \n \n \n \n \n \n \n \n FY25 \n \n \n FY24 \n \n \n Variance \n \n \n \n \n   \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Operating profit \n \n \n 13.1 \n \n \n 11.4 \n \n \n 1.7 \n \n \n \n \n Other operating cashflows (1) \n \n \n (5.7) \n \n \n (8.3) \n \n \n 2.6 \n \n \n \n \n Net movement in working capital \n \n \n 2.2 \n \n \n (4.3) \n \n \n 6.5 \n \n \n \n \n Net Cash from Investing Activities \n \n \n (5.1) \n \n \n (5.8) \n \n \n 0.7 \n \n \n \n \n Tax paid \n \n \n (0.5) \n \n \n (0.1) \n \n \n (0.4) \n \n \n \n \n Interest and financing costs \n \n \n (0.6) \n \n \n (0.5) \n \n \n (0.1) \n \n \n \n \n Purchase of Shares into the Employee Benefit Trust \n \n \n (0.5) \n \n \n (0.3) \n \n \n (0.2) \n \n \n \n \n Cash Flow before Exchange Rate Movements \n \n \n 2.9 \n \n \n (7.9) \n \n \n 10.8 \n \n \n \n \n Exchange rate movements \n \n \n (0.4) \n \n \n (0.7) \n \n \n 0.3 \n \n \n \n \n Net increase /(decrease) in cash and cash equivalents \n \n \n 2.5 \n \n \n (8.6) \n \n \n 11.1 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Opening net cash balance excluding IAS 17 leases \n \n \n 1.6 \n \n \n 10.2 \n \n \n   \n \n \n \n \n Closing net cash balance excluding IAS 17 leases \n \n \n 4.1 \n \n \n 1.6 \n \n \n   \n \n \n \n \n   \n   \n \n \n \n \n (1)                    \n \n \n Other operating cashflows relate to pre-working capital movements, excluding tax and interest. See Condensed consolidated cash flow statement of the attached condensed financial statements . \n \n \n \n \n   \n Bank facilities and financial position \n The Group continues to have a Revolving Credit Facility (RCF) of £20.0m, which provides ample liquidity and is utilised to support the build of stock prior to peak trading. The terms of this financing agreement expire on 30 November 2026. We will be seeking a similar facility during FY26. \n Capital distributions \n The Board is not proposing a final dividend. Future shareholder distributions, including share buybacks, continue to be assessed as profitability improves and funding allows. \n Employee Benefit Trust funding for the purposes of share schemes \n To avoid dilution of existing shareholder interests, the Board's intention is to continue providing funding to the Company's Employee Benefit Trust. This will enable the EBT to continue purchasing shares in the market that can subsequently be used to satisfy the exercise of options under employee share schemes, as it has done in each of the last two financial years. \n Rosie Fordham \n Chief Financial Officer \n 22 July 2025 \n \n \n   \n Consolidated income statement \n For the period ended 4 May 2025 \n   \n \n \n \n \n \n \n \n \n \n \n \n 52 weeks to 4 May 2025 \n \n \n \n \n \n \n \n 53 weeks to 5 May 2024 \n \n \n \n \n \n \n   \n \n \n \n \n Note \n \n \n \n \n Result before \n  Adjusting items \n £000 \n \n \n \n \n Adjusting \n items \n £000 \n \n \n \n \n Total \n £000 \n \n \n \n \n   \n \n \n \n \n Result before \n  Adjusting items \n £000 \n \n \n \n \n Adjusting \n items \n £000 \n \n \n \n \n Total \n £000 \n \n \n \n \n \n Revenue \n \n \n \n \n \n 277,039 \n \n \n - \n \n \n 277,039 \n \n \n \n \n \n 282,585 \n \n \n - \n \n \n 282,585 \n \n \n \n \n \n Cost of sales \n \n \n \n \n 3 \n \n \n \n \n (227,697) \n \n \n \n \n 4,408 \n \n \n \n \n (223,289) \n \n \n \n \n   \n \n \n \n \n (234,505) \n \n \n \n \n 3,741 \n \n \n \n \n (230,764) \n \n \n \n \n \n Gross profit \n \n \n \n \n \n 49,342 \n \n \n 4,408 \n \n \n 53,750 \n \n \n \n \n \n 48,080 \n \n \n 3,741 \n \n \n 51,821 \n \n \n \n \n Other operating income \n \n \n \n \n \n 8 \n \n \n - \n \n \n 8 \n \n \n \n \n \n 8 \n \n \n - \n \n \n 8 \n \n \n \n \n Distribution expenses \n \n \n \n \n \n (11,628) \n \n \n - \n \n \n (11,628) \n \n \n \n \n \n (12,725) \n \n \n - \n \n \n (12,725) \n \n \n \n \n \n Administrative expenses \n \n \n \n \n 3 \n \n \n \n \n (28,392) \n \n \n \n \n (640) \n \n \n \n \n (29,032) \n \n \n \n \n   \n \n \n \n \n (27,685) \n \n \n \n \n - \n \n \n \n \n (27,685) \n \n \n \n \n \n \n Operating profit \n \n \n \n \n 4 \n \n \n \n \n 9,330 \n \n \n \n \n 3,768 \n \n \n \n \n 13,098 \n \n \n \n \n   \n \n \n \n \n 7,678 \n \n \n \n \n 3,741 \n \n \n \n \n 11,419 \n \n \n \n \n \n Finance income \n \n \n \n \n \n 35 \n \n \n - \n \n \n 35 \n \n \n \n \n \n 19 \n \n \n - \n \n \n 19 \n \n \n \n \n \n Finance expenses \n \n \n \n \n   \n \n \n \n \n (4,790) \n \n \n \n \n - \n \n \n \n \n (4,790) \n \n \n \n \n   \n \n \n \n \n (4,520) \n \n \n \n \n - \n \n \n \n \n (4,520) \n \n \n \n \n \n \n Net financing expense \n \n \n \n \n   \n \n \n \n \n (4,755) \n \n \n \n \n - \n \n \n \n \n (4,755) \n \n \n \n \n   \n \n \n \n \n (4,501) \n \n \n \n \n - \n \n \n \n \n (4,501) \n \n \n \n \n \n Profit before tax \n \n \n \n \n \n 4,575 \n \n \n 3,768 \n \n \n 8,343 \n \n \n \n \n \n 3,177 \n \n \n 3,741 \n \n \n 6,918 \n \n \n \n \n \n Taxation \n \n \n \n \n 6 \n \n \n \n \n (165) \n \n \n \n \n - \n \n \n \n \n (165) \n \n \n \n \n   \n \n \n \n \n (541) \n \n \n \n \n - \n \n \n \n \n (541) \n \n \n \n \n \n \n Profit for the period \n \n \n \n \n   \n \n \n \n \n 4,410 \n \n \n \n \n 3,768 \n \n \n \n \n 8,178 \n \n \n \n \n   \n \n \n \n \n 2,636 \n \n \n \n \n 3,741 \n \n \n \n \n 6,377 \n \n \n \n \n \n \n   \n Basic earnings per share (pence) \n \n \n \n \n 8 \n \n \n \n \n 7.1 \n \n \n \n \n   \n \n \n \n \n 13.1 \n \n \n \n \n   \n \n \n \n \n 4.2 \n \n \n \n \n   \n \n \n \n \n 10.2 \n \n \n \n \n \n \n Diluted earnings per share (pence) \n \n \n \n \n 8 \n \n \n \n \n 7.1 \n \n \n \n \n   \n \n \n \n \n 13.1 \n \n \n \n \n   \n \n \n \n \n 4.2 \n \n \n \n \n   \n \n \n \n \n 10.2 \n \n \n \n \n \n   \n Profit for the period is attributable to equity holders of the Parent. \n   \n Consolidated statement of comprehensive income \n For the period ended 4 May 2025 \n   \n \n \n \n \n \n   \n \n \n \n \n FY25 \n £000 \n \n \n \n \n FY24 \n £000 \n \n \n \n \n \n \n Profit for the period \n \n \n \n \n 8,178 \n \n \n \n \n 6,377 \n \n \n \n \n \n Items that may be recycled subsequently into profit and loss \n \n \n \n \n \n \n \n \n \n \n Cash flow hedges - changes in fair value \n \n \n (1,851) \n \n \n 1,664 \n \n \n \n \n Cash flow hedges - reclassified to profit and loss \n \n \n 340 \n \n \n 134 \n \n \n \n \n Cost of hedging - changes in fair value \n \n \n (273) \n \n \n (415) \n \n \n \n \n Cost of hedging - reclassified to profit and loss \n \n \n 366 \n \n \n 182 \n \n \n \n \n \n Tax relating to components of other comprehensive income \n \n \n \n \n (409) \n \n \n \n \n (323) \n \n \n \n \n \n \n Other comprehensive (expense)/income for the period, net of income tax \n \n \n \n \n (1,827) \n \n \n \n \n 1,242 \n \n \n \n \n \n \n Total comprehensive income for the period attributable to equity shareholders of the Parent \n \n \n \n \n 6,351 \n \n \n \n \n 7,619 \n \n \n \n \n \n   \n   \n \n \n   \n Consolidated statement of financial position \n As at 4 May 2025 \n   \n \n \n \n \n \n   \n \n \n \n \n Note \n \n \n \n \n FY25 \n £000 \n \n \n \n \n FY24 \n £000 \n \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n Intangible assets \n \n \n 9 \n \n \n 2,168 \n \n \n 1,866 \n \n \n \n \n Property, plant and equipment \n \n \n 10 \n \n \n 12,583 \n \n \n 12,358 \n \n \n \n \n Right-of-use assets \n \n \n 11 \n \n \n 61,830 \n \n \n 57,703 \n \n \n \n \n \n Deferred tax assets \n \n \n \n \n 12 \n \n \n \n \n 3,514 \n \n \n \n \n 4,036 \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n 80,095 \n \n \n \n \n 75,963 \n \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n Inventories \n \n \n 13 \n \n \n 34,985 \n \n \n 31,354 \n \n \n \n \n Trade and other receivables \n \n \n 14 \n \n \n 6,149 \n \n \n 8,384 \n \n \n \n \n Derivative financial assets \n \n \n \n \n \n - \n \n \n 306 \n \n \n \n \n Current tax asset \n \n \n 6 \n \n \n 1,603 \n \n \n 1,189 \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n 15 \n \n \n \n \n 4,118 \n \n \n \n \n 1,619 \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n 46,855 \n \n \n \n \n 42,852 \n \n \n \n \n \n \n Total assets \n \n \n \n \n   \n \n \n \n \n 126,950 \n \n \n \n \n 118,815 \n \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Lease liabilities \n \n \n 11 \n \n \n 18,646 \n \n \n 19,943 \n \n \n \n \n Trade and other payables \n \n \n 17 \n \n \n 32,851 \n \n \n 29,886 \n \n \n \n \n Provisions \n \n \n 18 \n \n \n 798 \n \n \n 543 \n \n \n \n \n \n Derivative financial liabilities \n \n \n \n \n   \n \n \n \n \n 1,879 \n \n \n \n \n 64 \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n 54,174 \n \n \n \n \n 50,436 \n \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Lease liabilities \n \n \n 11,16 \n \n \n 56,284 \n \n \n 57,817 \n \n \n \n \n \n Provisions \n \n \n \n \n 18 \n \n \n \n \n 650 \n \n \n \n \n 476 \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n 56,934 \n \n \n \n \n 58,293 \n \n \n \n \n \n \n Total liabilities \n \n \n \n \n   \n \n \n \n \n 111,108 \n \n \n \n \n 108,729 \n \n \n \n \n \n \n Net assets \n \n \n \n \n   \n \n \n \n \n 15,842 \n \n \n \n \n 10,086 \n \n \n \n \n \n Equity attributable to equity holders of the Parent \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share capital \n \n \n \n \n \n 625 \n \n \n 625 \n \n \n \n \n Share premium \n \n \n \n \n \n 28,322 \n \n \n 28,322 \n \n \n \n \n Merger reserve \n \n \n \n \n \n (54) \n \n \n (54) \n \n \n \n \n Share-based payment reserve \n \n \n \n \n \n 2,274 \n \n \n 2,583 \n \n \n \n \n Hedging reserve \n \n \n \n \n \n (2,122) \n \n \n 129 \n \n \n \n \n \n Retained earnings \n \n \n \n \n   \n \n \n \n \n (13,203) \n \n \n \n \n (21,519) \n \n \n \n \n \n \n Total equity \n \n \n \n \n   \n \n \n \n \n 15,842 \n \n \n \n \n 10,086 \n \n \n \n \n \n   \n These financial statements were approved by the Board of Directors on 22 July 2025 and were signed on its behalf by: \n   \n   \n   \n   \n Rosie Fordham \n Chief Financial Officer \n   \n Company registered number: 11325534 \n   \n \n \n   \n Consolidated statement of changes in equity \n   \n \n \n \n \n \n \n \n \n Attributable to equity holders of the Company  \n \n \n \n \n \n \n   \n \n \n \n \n Share \n capital \n £000 \n \n \n \n \n Share \n premium \n £000 \n \n \n \n \n Merger \n reserve \n £000 \n \n \n \n \n Share-based \n payment \n reserve 1 \n £000 \n \n \n \n \n Hedging \n reserve 2,3 \n £000 \n \n \n \n \n Retained \n earnings \n £000 \n \n \n \n \n Total \n equity \n £000 \n \n \n \n \n \n \n Balance at 30 April 2023 \n \n \n \n \n 625 \n \n \n \n \n 28,322 \n \n \n \n \n (54) \n \n \n \n \n 2,780 \n \n \n \n \n (331) \n \n \n \n \n (27,926) \n \n \n \n \n 3,416 \n \n \n \n \n \n Total comprehensive income for the period \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 6,377 \n \n \n 6,377 \n \n \n \n \n \n Other comprehensive income \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 1,242 \n \n \n \n \n - \n \n \n \n \n 1,242 \n \n \n \n \n \n Total comprehensive income for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1,242 \n \n \n 6,377 \n \n \n 7,619 \n \n \n \n \n Hedging gains and losses and costs of hedging transferred to the cost of inventory \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (492) \n \n \n - \n \n \n (492) \n \n \n \n \n \n Transfer to retained earnings \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (290) \n \n \n \n \n 290 \n \n \n \n \n - \n \n \n \n \n \n Transactions with owners of the Company \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Reversal of share-based payment charges \n \n \n - \n \n \n - \n \n \n - \n \n \n (197) \n \n \n - \n \n \n - \n \n \n (197) \n \n \n \n \n \n Own shares purchased by Employee Benefit Trust \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (260) \n \n \n \n \n (260) \n \n \n \n \n \n \n Total transactions with owners of the Company \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (197) \n \n \n \n \n - \n \n \n \n \n (260) \n \n \n \n \n (457) \n \n \n \n \n \n \n Balance at 5 May 2024 \n \n \n \n \n 625 \n \n \n \n \n 28,322 \n \n \n \n \n (54) \n \n \n \n \n 2,583 \n \n \n \n \n 129 \n \n \n \n \n (21,519) \n \n \n \n \n 10,086 \n \n \n \n \n \n Total comprehensive (expense)/income for the period \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 8,178 \n \n \n 8,178 \n \n \n \n \n \n Other comprehensive expense \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (1,827) \n \n \n \n \n - \n \n \n \n \n (1,827) \n \n \n \n \n \n Total comprehensive (expense)/income for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1,827) \n \n \n 8,178 \n \n \n 6,351 \n \n \n \n \n Hedging gains and losses and costs of hedging transferred to the cost of inventory \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (424) \n \n \n - \n \n \n (424) \n \n \n \n \n \n Transfer to retained earnings \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (662) \n \n \n \n \n - \n \n \n \n \n 662 \n \n \n \n \n - \n \n \n \n \n \n Transactions with owners of the Company \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share-based payment charges \n \n \n - \n \n \n - \n \n \n - \n \n \n 353 \n \n \n - \n \n \n - \n \n \n 353 \n \n \n \n \n \n Own shares purchased by Employee Benefit Trust \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n   \n (524) \n \n \n \n \n   \n (524) \n \n \n \n \n \n \n Total transactions with owners of the Company \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 353 \n \n \n \n \n - \n \n \n \n \n (524) \n \n \n \n \n (171) \n \n \n \n \n \n \n Balance at 4 May 2025 \n \n \n \n \n 625 \n \n \n \n \n 28,322 \n \n \n \n \n (54) \n \n \n \n \n 2,274 \n \n \n \n \n (2,122) \n \n \n \n \n (13,203) \n \n \n \n \n 15,842 \n \n \n \n \n \n   \n 1     Share-based payment reserve includes a transfer of £662k (FY24: £nil) to retained earnings in relation to closed schemes (all shares have been granted, lapsed or forfeited). \n   \n 2     Hedging reserve includes £330k (FY24: £410k) in relation to changes in forward points which are recognised in other comprehensive income and accumulated as a cost of hedging within the hedging reserve. \n   \n 3     Hedging reserve contains a £nil (FY24: £290k) transfer from retained earnings in relation to a historical tax charge for financial derivatives that had previously been recognised in the consolidated income statement. \n   \n   \n   \n \n \n   \n Consolidated cash flow statement \n For the period ended 4 May 2025 \n   \n \n \n \n \n \n   \n \n \n \n \n Note \n \n \n \n \n FY25 \n £000 \n \n \n \n \n FY24 \n £000 \n \n \n \n \n \n Profit for the period (including Adjusting items) \n \n \n \n \n \n 8,178 \n \n \n 6,377 \n \n \n \n \n Adjustments for: \n \n \n \n \n \n \n \n \n \n \n \n \n \n Depreciation of property, plant and equipment \n \n \n 10 \n \n \n 3,854 \n \n \n 3,663 \n \n \n \n \n Impairment of property, plant and equipment \n \n \n 10 \n \n \n 463 \n \n \n 1,589 \n \n \n \n \n Reversal of impairment of property, plant and equipment \n \n \n 10 \n \n \n (975) \n \n \n (1,272) \n \n \n \n \n Depreciation of right-of-use assets \n \n \n 11 \n \n \n 18,385 \n \n \n 18,224 \n \n \n \n \n Impairment of right-of-use assets \n \n \n 11 \n \n \n 2,180 \n \n \n 3,394 \n \n \n \n \n Reversal of impairment of right-of-use assets \n \n \n 11 \n \n \n (7,807) \n \n \n (4,620) \n \n \n \n \n Amortisation of intangible assets \n \n \n 9 \n \n \n 1,213 \n \n \n 632 \n \n \n \n \n Impairment of intangible assets \n \n \n 9 \n \n \n 141 \n \n \n 442 \n \n \n \n \n Reversal of impairment of intangible assets \n \n \n 9 \n \n \n (471) \n \n \n (850) \n \n \n \n \n Derivative exchange loss \n \n \n \n \n \n 424 \n \n \n 494 \n \n \n \n \n Financial income \n \n \n \n \n \n (35) \n \n \n (19) \n \n \n \n \n Financial expense \n \n \n \n \n \n 689 \n \n \n 536 \n \n \n \n \n Interest on lease liabilities \n \n \n 11 \n \n \n 4,101 \n \n \n 3,984 \n \n \n \n \n Loss on disposal of property, plant and equipment and intangibles \n \n \n 9, 10 \n \n \n 282 \n \n \n 202 \n \n \n \n \n Loss/(profit) on disposal of right-of-use asset and lease liability \n \n \n 11 \n \n \n 845 \n \n \n (3,537) \n \n \n \n \n Effect of modifications on right-of-use asset \n \n \n \n \n \n (193) \n \n \n - \n \n \n \n \n Share-based payment charges \n \n \n \n \n \n 353 \n \n \n (197) \n \n \n \n \n \n Taxation \n \n \n \n \n 6 \n \n \n \n \n 165 \n \n \n \n \n 541 \n \n \n \n \n \n Operating cash flows before changes in working capital \n \n \n \n \n \n 31,792 \n \n \n 29,583 \n \n \n \n \n (Increase)/decrease in trade and other receivables \n \n \n \n \n \n 2,081 \n \n \n (963) \n \n \n \n \n (Increase)/decrease in inventories \n \n \n \n \n \n (3,396) \n \n \n 1,149 \n \n \n \n \n Increase/(decrease) in trade and other payables \n \n \n \n \n \n 3,037 \n \n \n (3,672) \n \n \n \n \n \n Increase/(decrease) in provisions \n \n \n \n \n 18 \n \n \n \n \n 429 \n \n \n \n \n (844) \n \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n 33,943 \n \n \n 25,253 \n \n \n \n \n \n Corporation tax paid \n \n \n \n \n   \n \n \n \n \n (466) \n \n \n \n \n (97) \n \n \n \n \n \n \n Net cash inflow from operating activities \n \n \n \n \n   \n \n \n \n \n 33,477 \n \n \n \n \n 25,156 \n \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Acquisition of property, plant and equipment \n \n \n 10 \n \n \n (4,691) \n \n \n (6,078) \n \n \n \n \n Capital contributions received from landlords \n \n \n 10 \n \n \n 842 \n \n \n 1,460 \n \n \n \n \n Acquisition of intangible assets \n \n \n 9 \n \n \n (1,185) \n \n \n (1,208) \n \n \n \n \n \n Interest received \n \n \n \n \n   \n \n \n \n \n 35 \n \n \n \n \n 19 \n \n \n \n \n \n \n Net cash outflow from investing activities \n \n \n \n \n   \n \n \n \n \n (4,999) \n \n \n \n \n (5,807) \n \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Payment of lease liabilities (capital) \n \n \n 16 \n \n \n (20,330) \n \n \n (22,471) \n \n \n \n \n Payment of lease liabilities (interest) \n \n \n 16 \n \n \n (4,101) \n \n \n (3,984) \n \n \n \n \n Payment of fees from loans and borrowings \n \n \n \n \n \n - \n \n \n (60) \n \n \n \n \n Interest paid \n \n \n \n \n \n (579) \n \n \n (434) \n \n \n \n \n Repayment of bank borrowings \n \n \n 16 \n \n \n (9,000) \n \n \n (6,000) \n \n \n \n \n Proceeds from bank borrowings \n \n \n 16 \n \n \n 9,000 \n \n \n 6,000 \n \n \n \n \n \n Own shares purchased by Employee Benefit Trust \n \n \n \n \n   \n \n \n \n \n (524) \n \n \n \n \n (260) \n \n \n \n \n \n \n Net cash outflow from financing activities \n \n \n \n \n   \n \n \n \n \n (25,534) \n \n \n \n \n (27,209) \n \n \n \n \n \n Net increase/(decrease) in cash and cash equivalents \n \n \n \n \n \n 2,944 \n \n \n (7,860) \n \n \n \n \n Exchange rate movements \n \n \n \n \n \n (445) \n \n \n (717) \n \n \n \n \n \n Cash and cash equivalents at beginning of period \n \n \n \n \n 16 \n \n \n \n \n 1,619 \n \n \n \n \n 10,196 \n \n \n \n \n \n \n Cash and cash equivalents at end of period \n \n \n \n \n 16 \n \n \n \n \n 4,118 \n \n \n \n \n 1,619 \n \n \n \n \n \n   \n   \n \n \n   \n Notes to the consolidated financial statements \n (Forming part of the financial statements) \n   \n 1. Accounting policies \n Where accounting policies are particular to an individual note, narrative regarding the policy is included with the relevant note; for example, the accounting policy in relation to inventory is detailed in Note 13 (Inventories). \n (a) General information \n TheWorks.co.uk plc is a leading UK multi-channel value retailer of arts and crafts, stationery, toys, games and books, offering customers a differentiated proposition as a value alternative to full price specialist retailers. The Group operates a network of over 500 stores in the UK, Ireland and online. \n TheWorks.co.uk plc (the Company) is a UK-based public limited company (11325534) with its registered office at Boldmere House, Faraday Avenue, Hams Hall Distribution Park, Coleshill, Birmingham B46 1AL. \n These consolidated financial statements for the 52 weeks ended 4 May 2025 (FY25 or the period) comprise the results of the Company and its subsidiaries (together referred to as the Group) and are presented in pounds sterling. All values are rounded to the nearest thousand (£000), except when otherwise indicated. \n (b) Basis of preparation \n The Group financial statements have been prepared on a historical cost basis, except for financial assets at fair value through profit and loss including derivatives. The financial statements are in accordance with UK-adopted International Accounting Standards. \n The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of policies, and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience, future budgets and forecasts, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. \n The estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The Group's significant judgements and estimates relate to going concern, fixed asset impairment and inventory; these are described in Note 1(e). \n (i) Going concern \n The financial statements have been prepared on a going concern basis, which the Directors consider appropriate for the reasons set out below. \n The Directors have assessed the prospects of the Group, taking into account its current position and the potential impact of the principal risks documented in the Strategic report on pages 1 to 43 of the Annual Report and Accounts. The financial statements have been prepared on a going concern basis, which the Directors consider appropriate having made this assessment. \n The Group performed a detailed strategic review during the second half of FY25 and produced a five-year plan to support the new strategy, 'Elevating The Works'. This five-year plan is referred to as the 'Base Case', from which the Group has prepared cash flow forecasts for a period of at least 12 months from the date of approval of these financial statements (the going concern assessment period). In addition, a 'severe but plausible' 'Downside Case ' s ensitivity has been prepared to support the Board's conclusion regarding going concern, by stress testing the Base Case to indicate the financial headroom resulting from applying more pessimistic assumptions. \n In assessing the basis of preparation, the Directors have considered: \n •       The external environment. \n •       The Group's financial position including the quantum and expectations regarding availability of bank facilities. \n •       The potential impact on financial performance of the risks described in the Strategic report. \n •       The output of the Base Case scenario, which mirrors the Group's five-year plan and therefore represents its estimate of the most likely financial performance over the forecast period. \n •       Measures to maintain or increase liquidity in the event of a significant downturn in trading. \n •       The resilience of the Group to these risks having a more severe impact, evaluated via the Downside Case which shows the impact on the Group's cash flows, bank facility headroom and covenants. \n   \n \n \n   \n Going concern and basis of preparation conclusion \n The retail backdrop was challenging throughout FY25, characterised by geopolitical uncertainty, fragile consumer confidence, continued high inflation and rising business costs. Despite this, the Group delivered a much-improved FY25 performance by focusing on factors within its control and driving incremental improvements across the business. The Board is mindful of continued cost pressures in the year ahead. However, the Group is confident that it will see further LFL sales growth, realise further benefits from action to grow product margins and reduce costs and execute the new strategy effectively. It is expected to offset the significant cost pressures and deliver further profit growth and strategic development in FY26 which will continue into the remainder of the five-year plan. There is sufficient cash headroom within both covenants under both scenarios and therefore the Directors are confident that the Group will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and have therefore prepared the financial statements on a going concern basis. \n (ii) New accounting standards \n The Group has applied the following new standards and interpretations for the first time for the annual reporting period commencing 6 May 2024: \n ·    Non-Current Liabilities with Covenants - Amendments to IAS 1 and Classifications of Liabilities as Current or Non-Current - Amendments to IAS 1 1. \n ·    Lease Liability in a Sale and Leaseback - Amendments to IFRS 16 1. \n ·    Supplier Finance Agreements - Amendments to IAS 7 and IFRS 7 1. \n The adoption of the standards and interpretations listed above has not led to any changes to the Group's accounting policies or had any other material impact on the financial position or performance of the Group. \n As at the date of approval of these financial statements, the following standards and interpretations, which have not been applied in these financial statements, were in issue, but not yet effective: \n ·      Amendments to IAS 21 Lack of Exchangeability 2 . \n ·      Amendment to IFRS 9 and IFRS 7 Classification and Measurement of Financial Instruments 3 . \n ·      IFRS 18 Presentation and Disclosure in Financial Statements 4 . \n ·      IFRS 19 Subsidiaries without Public Accountability: Disclosures 4 . \n 1      Effective for annual periods commencing after 1 January 2024. \n 2      Effective for annual periods commencing after 1 January 2025. \n 3      Effective for annual periods commencing after 1 January 2026. \n 4      Effective for annual periods commencing after 1 January 2027. \n   \n The adoption of the standards and interpretations listed above is not expected to have a material impact on the financial position or performance of the Group. \n (c) Accounting convention \n The consolidated financial statements have been prepared under the historical cost convention, except for certain financial assets and financial liabilities (including derivative instruments), which are held at fair value. \n (d) Basis of consolidation \n The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to direct the activities that affect those returns through its power over the entity. Consolidation of a subsidiary begins from the date control commences and continues until control ceases. The Company reassesses whether or not it controls an investee if circumstances indicate that there are changes to the elements of control detailed above. \n An Employee Benefit Trust operated on the Group's behalf (EBT) is acting as an agent of the Company; therefore, the assets and liabilities of the EBT are aggregated into the Company balance sheet and shares held by the EBT in the Company are presented as a deduction from reserves. \n \n \n   \n (e) Key sources of estimation uncertainty \n The preparation of consolidated financial statements requires the Group to make estimates and judgements that affect the application of policies and reported amounts. \n Critical judgements represent key decisions made by management in the application of the Group's accounting policies. Where a significant risk of materially different outcomes exists, this will represent a key source of estimation uncertainty. \n Estimates and judgements are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. \n Key sources of estimation uncertainty which are material to the financial statements are described in the context of the matters to which they relate, in the following notes: \n \n \n \n \n \n Description \n \n \n \n \n Note \n \n \n \n \n \n Going concern \n \n \n 1(b)(i) \n \n \n \n \n Impairment of intangible assets, property, plant and equipment and right-of-use assets \n \n \n 9, 10, 11 \n \n \n \n \n Inventory provisions \n \n \n 13 \n \n \n \n \n   \n 2. Alternative performance measures (APMs) \n \n \n \n \n Accounting policy \n In the reporting of financial information, the Group has adopted various alternative performance measures (APMs) of financial performance, position or cash flows other than those defined or specified under International Accounting Standards (IFRS). APMs should be considered in addition to IFRS measurements and are not intended to be a substitute for IFRS measurements. These measures are not defined by IFRS and may not be comparable with similarly titled performance measures and disclosures by other entities. \n   \n The Group believes that these APMs provide stakeholders with additional helpful information on the performance of the business. They are consistent with how business performance is planned and reported internally and are also consistent with how these measures have been reported historically. Some of the APMs are also used for the purpose of setting remuneration targets, which are set out below. \n   \n   \n The table below sets out the APMs used in this report, with further information regarding the APM, and a reconciliation to the closest IFRS equivalent measure, below. \n \n \n \n \n Sales APM \n \n \n Like-for-like (LFL) sales \n \n \n \n \n Profitability APM \n \n \n EBITDA \nAdjusted EBITDA pre-IFRS 16 \n Adjusted profit before tax (PBT) \n Adjusted EPS (see Note 8) \n \n \n \n \n Financial position APMs \n \n \n Net debt \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n Sales APM \n Like-for-like (LFL) sales \n Closest IFRS equivalent: revenue \n   \n LFL sales are defined by the Group as the year-on-year growth in gross sales from stores which have been trading for a full financial year prior to the current year and have been trading throughout the current financial period being reported on, and from the Company's online store, calculated on a calendar week basis. The measure is used widely in the retail industry as an indicator of sales performance. LFL sales are calculated on a gross basis to ensure that fluctuations in the VAT rates of products sold are excluded from the LFL sales growth percentage figure. \n A reconciliation of IFRS revenue to sales on an LFL basis is set out below: \n \n \n \n \n FY25 \n \n \n Stores £000 \n   \n £000 \n \n \n Online \n £000 \n   \n \n \n Total \n£000 \n \n \n \n \n Revenue \n \n \n 252,166 \n \n \n 24,873 \n \n \n 277,039 \n \n \n \n \n VAT \n \n \n 33,924 \n \n \n 2,541 \n \n \n 36,465 \n \n \n \n \n Loyalty points \n \n \n (216) \n \n \n - \n \n \n (216) \n \n \n \n \n Total gross sales \n \n \n 285,874 \n \n \n 27,414 \n \n \n 313,288 \n \n \n \n \n Non-LFL store sales \n \n \n  (16,192) \n \n \n - \n \n \n (16,192) \n \n \n \n \n LFL sales \n \n \n 269,682 \n \n \n 27,414 \n \n \n 297,096 \n \n \n \n \n   \n \n \n \n \n FY24 \n \n \n Stores £000 \n   \n £000 \n \n \n Online     £000 \n   \n \n \n Total \n£000 \n \n \n \n \n Revenue \n \n \n 254,228 \n \n \n 28,357 \n \n \n 282,585 \n \n \n \n \n VAT \n \n \n 33,501 \n \n \n 3,098 \n \n \n 36,599 \n \n \n \n \n Loyalty points \n \n \n 1,228 \n \n \n 86 \n \n \n 1,314 \n \n \n \n \n Total gross sales \n \n \n 288,957 \n \n \n 31,541 \n \n \n 320,498 \n \n \n \n \n Non-LFL store sales \n \n \n (25,209) \n \n \n (342) \n \n \n (26,551) \n \n \n \n \n LFL sales \n \n \n 263,748 \n \n \n 31,199 \n \n \n 293,947 \n \n \n \n \n LFL sales growth \n \n \n 2.3% \n \n \n (12.1)% \n \n \n 0.8% \n \n \n \n \n   \n FY24 was a 53-week period; therefore, the LFL sales APM compares 52 weeks of FY25 to the equivalent 52 weeks of FY24. \n Profit APMs \n EBITDA and pre - IFRS 16 Adjusted EBITDA \n Closest IFRS equivalent: operating profit 1 \n   \n EBITDA is earnings before interest, tax, profit or loss on disposal of fixed assets, depreciation, amortisation and impairment reversals and charges. The Group uses EBITDA as a measure of trading performance, as it usually correlates with the Group's operating cash generation. \n Pre-IFRS 16 Adjusted EBITDA is defined by the Group as pre-IFRS 16 earnings before interest, tax, depreciation, amortisation and profit/loss on the disposal of fixed assets, after adding back or deducting Adjusting items. Pre-IFRS 16 EBITDA is used for the bank facility financial covenants. \n   \n The table below provides a reconciliation of operating profit to Adjusted EBITDA and pre-IFRS 16 EBITDA: \n \n \n \n \n \n   \n \n \n \n \n FY25 \n £000 \n \n \n \n \n FY24 \n £000 \n \n \n \n \n \n Operating profit 1 \n \n \n 13,098 \n \n \n 11,419 \n \n \n \n \n Add back : \n \n \n   \n \n \n \n \n \n \n \n Depreciation of property, plant and equipment \n \n \n 3,854 \n \n \n 3,663 \n \n \n \n \n Depreciation of right-of-use assets \n \n \n 18,385 \n \n \n 18,224 \n \n \n \n \n Amortisation \n \n \n 1,213 \n \n \n 632 \n \n \n \n \n Loss on disposal of fixed assets \n \n \n 282 \n \n \n 202 \n \n \n \n \n Gain on modification of right-of-use assets \n \n \n (193) \n \n \n - \n \n \n \n \n Adjusting items \n \n \n (3,768) \n \n \n (3,741) \n \n \n \n \n Adjusted EBITDA \n \n \n 32,871 \n \n \n 30,399 \n \n \n \n \n Less: \n \n \n   \n \n \n   \n \n \n \n \n Income statement rental charges not recognised under IFRS 16 \n \n \n (23,328) \n \n \n (24,426) \n \n \n \n \n Foreign exchange difference on euro leases \n \n \n (36) \n \n \n 69 \n \n \n \n \n Pre-IFRS 16 Adjusted EBITDA \n \n \n 9,507 \n \n \n 6,042 \n \n \n \n \n 1 Whilst operating profit is not defined formally in IFRS, it is considered a generally accepted accounting measure. \n   \n Adjusted profit after tax \n Closest IFRS equivalent: profit before tax \n   \n Adjusted PBT is profit before tax adjusted to exclude the effect of transactions that, in the opinion of the Directors, are either one off in nature and/or are unreflective of the underlying trading performance of the Group in the period. Adjusted PBT reports a normalised or underlying trading performance of the Group. The transactions that have been adjusted could distort the impression of future performance trends based on the current year results. \n   \n The Group uses Adjusted PBT to assess its performance on an underlying basis excluding these items and believes measures adjusted in this manner provide additional information about the impact of unusual or one-off items on the Group's performance in the period. \n   \n These adjusted metrics are included within the consolidated income statement and consolidated statement of other comprehensive income, with further details of Adjusting items included in Note 3 . \n   \n \n \n \n \n \n \n \n FY25 \n £000 \n \n \n FY24 \n £000 \n \n \n \n \n Adjusted profit after tax \n \n \n 4,410 \n \n \n 2,636 \n \n \n \n \n Adjusting items (including impairment charges and reversals) \n \n \n 3,768 \n \n \n 3,741 \n \n \n \n \n \n Profit after tax \n \n \n \n \n 8,178 \n \n \n \n \n 6,377 \n \n \n \n \n \n   \n Financial position APMs \n Net debt \n Closest IFRS equivalent: no equivalent; however, it is calculated by combining IFRS measures for cash and borrowing. \n Net debt is calculated by subtracting the Group's cash and cash equivalents from its gross borrowing. Net debt is utilised in the calculation of leverage, a covenant in the Group's financing facilities. \n The Group presents net debt inclusive and exclusive of lease liabilities, which is consistent with the definition used for its banking covenant calculations. \n \n \n \n \n Calculation of net debt \n \n \n FY25 \n £000 \n \n \n FY24 \n £000 \n \n \n \n \n Current borrowings \n \n \n (18,646) \n \n \n (19,943) \n \n \n \n \n Non-current borrowings \n \n \n (56,284) \n \n \n (57,817) \n \n \n \n \n Gross borrowings \n \n \n (74,930) \n \n \n (77,760) \n \n \n \n \n Add cash \n \n \n 4,118 \n \n \n 1,619 \n \n \n \n \n Net debt (inc. leases) \n \n \n (70,812) \n \n \n (76,141) \n \n \n \n \n Lease liabilities \n \n \n 74,930 \n \n \n 77,760 \n \n \n \n \n Net cash (exc. leases) \n \n \n 4,118 \n \n \n 1,619 \n \n \n \n \n   \n \n \n   \n   \n 3. Adjusting items \n Adjusting items are unusual in nature or incidence and sufficiently material in size that in the judgement of the Directors they merit disclosure separately on the face of the financial statements to ensure that the reader has a proper understanding of the Group's financial performance and that there is comparability of financial performance between periods. \n The Directors believe that the Adjusted profit and earnings per share measures included in this report provide additional useful information to users of the accounts. These measures are consistent with how business performance is measured internally. The profit before tax and Adjusting items measures are not recognised profit measures under IFRS and may not be directly comparable with Adjusted profit measures used by other companies. \n If a transaction or related series of transactions has been treated as Adjusting in one accounting period, the same treatment will be applied consistently year on year. \n \n \n \n \n \n   \n \n \n \n \n FY25 \n £000 \n \n \n \n \n FY24 \n £000 \n \n \n \n \n \n Cost of sales \n \n \n \n \n \n \n \n \n \n \n Impairment charges \n \n \n (2,784) \n \n \n (5,333) \n \n \n \n \n Impairment reversals \n \n \n 9,253 \n \n \n 6,742 \n \n \n \n \n (Loss)/profit on disposal of right-of-use assets and lease liabilities \n \n \n (845) \n \n \n 3,537 \n \n \n \n \n Exceptional fulfilment costs \n \n \n (1,216) \n \n \n - \n \n \n \n \n Other exceptional costs \n \n \n - \n \n \n (1,205) \n \n \n \n \n Administration costs \n \n \n \n \n \n \n \n \n \n \n Other exceptional costs - restructuring \n \n \n (640) \n \n \n - \n \n \n \n \n \n Total Adjusting items \n \n \n \n \n 3,768 \n \n \n \n \n 3,741 \n \n \n \n \n \n   \n Impairment charges and reversals of prior year impairment charges relate to fixed assets (see Notes 9, 10 and 11). \n Profit on disposal of right-of-use assets and lease liabilities relate to leases (see Note 11). \n Other exceptional items in FY25 comprise £1.2m (FY24: £nil) in relation to the transition of the online sales Distribution Centre and £0.6m (FY24: £nil) related to the review of the cost base of the Group, which includes £0.4m of redundancy costs. In FY24, other exceptional items comprise £0.5m of professional fees and other costs related to the listing of the Company on AIM and £0.7m of redundancy costs related to the restructure of the Operating Board, which were included within cost of sales in the prior year. \n   \n \n \n   \n 4. Operating profit \n Operating profit before Adjusting items is stated after charging the following items: \n \n \n \n \n \n   \n \n \n \n \n FY25 \n £000 \n \n \n \n \n FY24 \n £000 \n \n \n \n \n \n Loss on disposal of property, plant and equipment \n \n \n 282 \n \n \n 168 \n \n \n \n \n Loss on disposal of intangible assets \n \n \n - \n \n \n 34 \n \n \n \n \n Depreciation \n \n \n 22,239 \n \n \n 21,887 \n \n \n \n \n Amortisation \n \n \n 1,213 \n \n \n 632 \n \n \n \n \n Net foreign exchange loss \n \n \n 276 \n \n \n 170 \n \n \n \n \n Cost of inventories recognised as an expense \n \n \n 111,385 \n \n \n 120,530 \n \n \n \n \n Staff costs \n \n \n 68,590 \n \n \n 67,855 \n \n \n \n \n   \n Auditor's remuneration \n \n \n \n \n \n   \n \n \n \n \n FY25 \n £000 \n \n \n \n \n FY24 \n £000 \n \n \n \n \n \n Fees payable to the Group's auditor for the audit of the Group's annual accounts \n \n \n 307 \n \n \n 300 \n \n \n \n \n Amounts payable in respect of other services to the Company and its subsidiaries \n \n \n \n \n \n \n \n \n \n \n \n Audit of the accounts of subsidiaries \n \n \n \n \n 43 \n \n \n \n \n 42 \n \n \n \n \n \n \n Total \n \n \n \n \n 350 \n \n \n \n \n 342 \n \n \n \n \n \n   \n 5. Staff numbers and costs \n The average number of people employed by the Group (including Directors) during the period, analysed by category, were as follows: \n \n \n \n \n \n \n \n \n Number of employees \n \n \n \n \n \n \n   \n \n \n \n \n FY25 \n \n \n \n \n FY24 \n \n \n \n \n \n Store support centre colleagues \n \n \n 284 \n \n \n  280 \n \n \n \n \n Store colleagues \n \n \n 3,259 \n \n \n  3,590 \n \n \n \n \n \n Warehouse and distribution colleagues \n \n \n \n \n 154 \n \n \n \n \n  156 \n \n \n \n \n \n \n   \n \n \n \n \n 3,697 \n \n \n \n \n  4,026 \n \n \n \n \n \n   \n The corresponding aggregate payroll costs were as follows: \n \n \n \n \n \n   \n \n \n \n \n FY25 \n £000 \n \n \n \n \n FY24 \n £000 \n \n \n \n \n \n Wages and salaries \n \n \n 62,765 \n \n \n  62,367 \n \n \n \n \n Social security costs \n \n \n 4,700 \n \n \n  4,422 \n \n \n \n \n \n Contributions to defined contribution pension schemes \n \n \n \n \n 1,125 \n \n \n \n \n  1,066 \n \n \n \n \n \n Total employee costs \n \n \n 68,590 \n \n \n  67,855 \n \n \n \n \n \n Agency labour costs \n \n \n \n \n 1,804 \n \n \n \n \n  2,977 \n \n \n \n \n \n \n Total staff costs \n \n \n \n \n 70,394 \n \n \n \n \n  70,832 \n \n \n \n \n \n   \n \n \n   \n The Directors' remuneration for the period was as follows: \n \n \n \n \n \n   \n \n \n \n \n FY25 \n £000 \n \n \n \n \n FY24 \n £000 \n \n \n \n \n \n Directors' remuneration \n \n \n 1,012 \n \n \n  791 \n \n \n \n \n \n Contributions to defined contribution plans \n \n \n \n \n 42 \n \n \n \n \n  16 \n \n \n \n \n \n \n   \n \n \n \n \n 1,054 \n \n \n \n \n  807 \n \n \n \n \n \n   \n The following number of Directors were members of: \n \n \n \n \n \n   \n \n \n \n \n FY25 \n \n \n \n \n FY24 \n \n \n \n \n \n \n Company defined contribution scheme \n \n \n \n \n 2 \n \n \n \n \n 2 \n \n \n \n \n \n \n   \n \n \n \n \n 2 \n \n \n \n \n 2 \n \n \n \n \n \n   \n The highest paid Director's remuneration and contributions to defined contribution plans during the year were as follows: \n \n \n \n \n \n   \n \n \n \n \n FY25 \n £000 \n \n \n \n \n FY24 \n £000 \n \n \n \n \n \n Directors' remuneration \n \n \n 478 \n \n \n  337 \n \n \n \n \n \n Contributions to defined contribution plans \n \n \n \n \n 9 \n \n \n \n \n 10 \n \n \n \n \n \n \n   \n \n \n \n \n 487 \n \n \n \n \n 347 \n \n \n \n \n \n   \n 6. Taxation \n \n \n \n \n Accounting policy \n The tax expense represents the sum of the tax currently payable and deferred tax. \n   \n Current tax \n The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. \n   \n Deferred tax \n Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. \n   \n Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it i...

View stock analysis, news, and events for Theworks.co.uk Plc