TheWorks.co.uk (WRKS) H2 2025 earnings summary

Executive summary

• Significant operational, financial, and strategic progress achieved in FY 2025, with strong momentum carried into FY 2026.

• Launched new strategy, "Elevate The Works," aiming to be the top destination for affordable, screen-free family activities, with clear long-term goals: sales over £375 million and EBITDA margin above 6% within five years.

• Achieved strong financial performance with like-for-like sales growth outpacing the sector and significant profitability improvement, aligning with upgraded market expectations.

• Well positioned for further profit growth in FY26, with market guidance recently upgraded and a strong start to the new year.

Financial highlights

• FY 2025 revenue reached £277 million, slightly down year-on-year due to an extra trading week in the prior year and store estate optimization.

• Like-for-like sales grew 0.8% overall, with stores (over 90% of sales) up 2.3%; online sales declined 12.1% due to capacity constraints and profitability focus.

• EBITDA rose to £9.5 million, up from £6 million last year and ahead of market expectations; profit before tax £8.3 million (FY24: £6.9 million).

• Net cash at year-end was £4.1 million, up from £1.6 million year-on-year; product margin improved from 57.3% to 59.4%, driven by supplier negotiations, product mix control, and reduced promotions.

• Basic and diluted EPS at 13.1p (FY24: 10.2p); adjusted EPS for FY 2025 was 7.1p (vs. 4.2p last year).

Outlook and guidance

• FY 2026 off to a strong start: like-for-like sales up 5% in the first 11 weeks, with continued margin growth and cost savings.

• Comfortable with upgraded market expectations for £11 million EBITDA in FY 2026, a year-on-year increase of over 15%, and expected year-end cash of approximately £5.5 million.

• CapEx planned at £8 million for FY 2026, up from £5 million, to support new stores, estate investment, and systems transformation.

• Strategic initiatives in place to offset cost headwinds, including wage and NI increases.