The trading update from The Works said that revenue is flat but the company is targeting a return to profit growth in the coming year.

The Works expects to see a return to profit growth in the next financial year as the retailer reports “a year of considerable change” over the last financial year to May 5th 2024. The update stated that revenue was flat at £282.6m, and there was a slight 0.9% decline in like-for-like sales in the 53 weeks of the trading period.

Chief executive, Gavin Peck, commented: “We are pleased to have finished FY24 in line with market expectations, which reflects action taken to reset our cost base and improve margins, supported by improving store sales in the final quarter.

“Significant changes implemented across the business make us well-placed to offset cost headwinds, and we expect to return to profit growth in FY25.”

The Works said that it had made “significant progress” since the start of 2024 on measures taken to stabilise profitability by increasing margins and reducing costs.

This included switching its listing from the main market to AIM, which it said will result in a significantly lower audit fee”, and relocating the company’s online fulfilment centre to a more efficient facility. The Works also closed its loyalty scheme in March, in a further move to reduce costs and rebuild margin and profitability, choosing instead to focus on maintaining everyday affordable prices.

During the year, The Works said it had improved the quality and overall profitability of its store portfolio. Nine new store openings took place, as well as 24 closures, five relocations and 21 store refits. The report stated that, of the company’s 511 existing stores, more than 96% are profitable.

As a result, the retailer said it expects to deliver stable sales for the next financial year and an pre-adjusted EBITDA of £8.5m.

Gavin Peck added: “In a year of considerable change at The Works, I am incredibly grateful to our colleagues for their ongoing dedication to our business and to our customers.”