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TheWorks benefits from 'Squishies' trend but losses remain flat

By Oliver Haill

Date: Wednesday 16 Jan 2019

(Sharecast News) - Value retailer TheWorks reported flat adjusted losses for the first half of the year, but declared its first dividend payment since floating last summer and said sales momentum had continued in the second half.
Adjusted operating losses of £0.9m for the 26 weeks ended 28 October were increased from the £0.2m the previous year, while the adjusted loss before tax of £4.4m was exactly the same as the last time.

The full reported loss before tax, which including one-off items relating to the IPO and debt refinancing last July, came out at £7.9m, versus the loss of £4.5m a year before.

An interim dividend of 1.2p was declared.

Having already revealed in a pre-close statement that revenues were up 15% to £91.5m, with like-for-like sales up 3.8%, chief executive Kevin Keaney said the second half has seen record LFL sales growth of 4.5%.

He felt its was a "strong" maiden set of interim results and said the chain of shops and websites had "continued to delight our customers with our wide and constantly refreshed range of great value products".

Of the early second-half performance, he said this meant expectations for the current full year remain unchanged.

"Whilst the UK retail environment and economic outlook remains challenging, we remain confident of the group's future prospects given our differentiated proposition, offering a wide range of new products at outstanding value, through our unique multi-channel offering, which continues to be well received by our customers."

House broker Investec agreed it was a strong Christmas and losses "slightly lower" than forecast.

"The business continues to trade in line with FY expectations despite an issue with moving its online distribution to a third party, resulting in higher-than-expected opex."

Investec forecasts £221.3m sales for the full year and increased its adjusted EBITDA forecast 4% to £14.6m due to the £0.6m 'Squishies Mega Trend'.

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