The Works has reported a 47 per cent increase in adjusted EBITDA following growth in sales and improvements to its product margin.
Revenue from continuing operations increased by 3.1 per cent to £260m during the 52 weeks to 3 May 2026, while like-for-like sales grew by 3.3 per cent.
Pre-IFRS 16 adjusted EBITDA rose from £9.5m to £14m, with its margin increasing from 3.7 per cent to 5.4 per cent. Adjusted pre-tax profit increased by 44 per cent to £7.2m.
Statutory pre-tax profit from continuing operations fell by 28 per cent to £6.8m, reflecting higher adjusting items and impairment reversals recorded in the previous year.
The retailer said its improved underlying performance was supported by sales growth, a 240-basis-point rise in product margin and the delivery of £2m in annual cost savings. This helped offset higher National Living Wage and employer National Insurance costs.
The Works ended the year with net cash of £3.6m and has agreed a new £20m revolving credit facility running until November 2029.
The group opened a net five stores during the year, taking its estate to 508 locations across the UK and Ireland. More than 98 per cent of its stores are profitable.
It plans to open a further net 10 stores during the current year and is targeting an estate of more than 560 locations by the end of its 2030 financial year.
The Works stopped trading through its ecommerce website in March after concluding that the channel, which generated less than 10 per cent of sales, was loss-making. Its website now operates as a non-transactional brand and product discovery platform.
The retailer said the move had allowed it to concentrate resources and investment on its profitable store estate.
Trading has remained strong since the year-end, with like-for-like sales increasing by 8.8 per cent during the first 11 weeks of the new financial year. The board maintained its guidance for pre-IFRS 16 adjusted EBITDA of £15m for the full year.
Gavin Peck, chief executive of The Works, said: “FY26 was a pivotal year for The Works, with continued execution against our growth strategy and a step change in underlying profitability supported by increasing demand from families for affordable screen-free activities.
“We have made a strong start to the new financial year, with like-for-like sales up 8.8 per cent in the first 11 weeks, underpinning our confidence in delivering further sales and profit growth in the current year.”
The group continues to target pre-IFRS 16 adjusted EBITDA of at least £22.5m by 2030.
Reflecting its store-focused operating model, it will also ask shareholders to approve changing the company’s name from TheWorks.co.uk plc to TheWorks plc at its forthcoming annual general meeting.
Share