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Shares in TheWorks.co.uk PLC fell on Monday after the company ‘materially lowered its expectations’ regarding results for the current financial year.
TheWorks shares were down 23% to 35.66 pence each in London on late Monday morning.
The Birmingham-based stationary retailer said it is facing historically high freight costs and increases to the national living wage in the UK, giving a cautious outlook for financial year 2023 which started in May.
The company expects underlying earnings before interest, tax, depreciation and amortisation at £16.5 million, higher than its previous guidance of £15.0 million, as provisions relating to stock are at a lower-than-expected level.
TheWorks still expects to pay a dividend of 2.4p per share for the financial year that ended on May 1, confirming plans set out in late May to reinstate its payout.
The company also provided an update on its first quarter, which ended July 13. Total sales were down 2.5% on a year ago due to a 29% like-for-like slide in online sales. Store sales were up 1.4% on a like-for-like basis however.
‘We delivered a strong performance in financial year 2022 and will report a better than expected profit, as well as reinstating the payment of a dividend,’ said Chief Executive Officer Gavin Peck.
‘Since the start of the financial year we have faced the residual effects of the cyber security incident and increasingly challenging trading conditions. The progressive recovery of store trading throughout the period is reassuring and we are pleased with the resilient performance delivered considering the lower consumer confidence.’
The retailer aims to release full results for financial 2022 on September 23.
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