Expansion on the cards at The Works
By Stephanie Bartup, Midlands Correspondent
High street retailer The Works has grown sales by almost 8 per cent over the past year, Insider can reveal. Despite what the Sutton Coldfield-based company described as an "undoubtedly challenging" period, turnover grew to £114.4m over the 53 weeks to 1 May 2011. The Works, which sells books, stationery and art materials, said it plans to operate a "controlled expansion programme" over the coming months.
The Works opened 43 new stores over the year. Total sales grew by 7.9 per cent year-on-year, with a like-for-like decline of 1.5 per cent.
It said performance had been hindered by "significant" levels of snowfall before Christmas, and said bad weather had undoubtedly affected pre-Christmas trading levels.
Turnover rose from £106m in 2010 to £114m in its latest year end accounts, submitted to Companies House. Operating profit remained fairly static, dropping slightly from £8.3m in 2010 to £8.28m in 2011.
The company's new stores were supplemented by the acquisition of 11 stores in Northern Ireland from Lagan Books, bringing the number of stores in operation to 299. The company said the growth over the year had given it "a significant presence" in Northern Ireland.
Over the coming year, the directors of the company said they would "focus on the sustained performance of our existing stores alongside a controlled expansion programme". In a statement, the directors added that they expected trading conditions to continue being "extremely competitive".
They also said they did not recommend a final dividend payout at the end of the year. An interim dividend of £2m was paid out earlier.
Despite working against what the company described as a "challenging economic background", staff levels rose over the year. In 2010, The Works employed 1,844 staff across its stores; in 2011 this increased to 2,141.
The Works has a five-year bank loan of £11.4m which is due to mature in two years' time. The company renewed its bank overdraft in June 2011, attracting interest of 2.65 per cent against the bank's sterling base rate.
In the coming year, The Works said it would concentrate on improving the presentation of its stores, which it said was "an ongoing project", as well as rolling out its controlled expansion programme.
