The Works, the UK specialist retailer, reported total revenue of £260m for the 52 weeks to 3 May, up 3.1% from £252.2m a year earlier.
Like-for-like sales rose 3.3%, outperforming a 0.1% decline across the UK non-food retail sector reported by the British Retail Consortium.
Pre-IFRS 16 adjusted EBITDA from continuing operations climbed 47% to £14m, from £9.5m, as a 240 basis point rise in product margin and a completed £2m annual cost reduction programme offset higher National Living Wage and employer National Insurance costs.
Adjusted profit before tax from continuing operations rose 44% to £7.2m, from £5m, while statutory profit before tax fell 28% to £6.8m, reflecting a £0.5m adjusting items charge against a £4.5m net credit the prior year that had been driven by impairment reversals.
The group ended the period with net cash of £3.6m, down from £4.1m, and secured a new £20m revolving credit facility running to November 2029.
The board discontinued the group's online transactional channel in March following recurring fulfilment problems with third-party providers, with the business now presented as a discontinued operation.
"FY26 was a pivotal year for The Works with continued execution against our growth strategy and a step change in underlying profitability," said chief executive Gavin Peck.
Like-for-like sales grew 8.8% in the first 11 weeks of the new financial year to 19 July, up from 7% growth in the same period last year, prompting the board to maintain its upgraded FY27 guidance of £15m pre-IFRS 16 adjusted EBITDA and its target of at least £22.5m by FY30.
News Intelligence what this means for the company
The Works delivered a 47% jump in adjusted EBITDA to £14m on flat revenue growth (3.1%), driven by a 240 basis point margin expansion and a £2m cost reduction programme that more than offset wage inflation. The company is now trading profitably enough to maintain FY27 guidance of £15m EBITDA and a FY30 target of £22.5m—a meaningful step-up from the £9.5m baseline just 12 months ago—while early trading in FY27 shows accelerating like-for-like sales momentum (8.8% vs 7% in the prior-year equivalent period).
The Works has moved from margin compression to margin expansion and is now generating positive operating leverage on a stable revenue base. The discontinued online channel removes a drag (closure costs of ~£2m were treated as adjusting items), and the new £20m credit facility provides runway; the real test is whether the 8.8% like-for-like growth in early FY27 can sustain and whether the company can reach £22.5m EBITDA by FY30 without significant revenue growth.
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Shore Capital on The Works reiterates FY27 guidance
Shore Capital analyst David Hughes says FY26 was the first full year of the "Elevating The Works" strategy, delivering stronger sales momentum, a 240bps product margin improvement and a step-change in profitability.
The broker, in a note, described earnings (adjusted EBITDA) as in-line with the firm's latest guidance and repeated the board's £150m EBITDA target alongside, its longer-term £22.5m FY30 ambition as the key forward markers.
He adds that exiting the online transactional channel, together with a £20m revolving credit facility and net cash, should support higher margins and underpin balance-sheet resilience.
