TheWorks.co.uk PLC COVID-19 Update (2159H)
March 23 2020 - 8:10AM
UK Regulatory
TIDMWRKS
RNS Number : 2159H
TheWorks.co.uk PLC
23 March 2020
23 March 2020
TheWorks.co.uk plc
COVID-19 Update
TheWorks.co.uk plc ("The Works", the "Company" or the "Group"),
the multi-channel value retailer of gifts, arts, crafts, toys,
books and stationery, announces an update regarding COVID-19.
Trading in the nine weeks since the Group's last update on
Thursday 16 January 2020 to Sunday 15 March 2020 had been strong,
with LFL sales growth of +2.9%. This strong growth was delivered
across both stores and online.
Last week, despite declining high street footfall, the Group
experienced a significant uplift in sales, both in stores and
online, as customers demanded products to support with their
child's ongoing education, mindfulness material to support mental
health or products to "beat the boredom" during this period of
social distancing.
The Group has been monitoring the rapidly changing situation and
guidance closely with the key priority at present being the health
and wellbeing of its colleagues, customers and wider communities.
To date, the Group has continued to follow the Government's advice
and kept its stores trading. However, to encourage social
distancing for the safety and wellbeing of its colleagues,
customers and the wider community the Board has taken the decision
to close all of its stores as of tonight. The Group's website,
www.theworks.co.uk , will continue to trade as normal unless
further restrictions are put in place by the Government to restrict
the movement of people and/or goods.
The Group has always maintained a prudent approach to costs,
however, it is now taking a number of additional temporary measures
to help manage its cost base and cashflows during this challenging
time. These measures include:
-- All non-essential capital investment has been temporarily
suspended, including the new store rollout programme (with the
exception of a small number of stores where we are legally
committed);
-- All discretionary operational expenditure, such as store
point of sale and marketing spend and travel costs will be managed
to minimum spend levels;
-- Discussions with landlords will be held regarding measures to
reduce net cash outflow on store rents whilst stores are
closed;
-- Planned stock intake will be reviewed to ensure careful cash
management, particularly as the Group builds towards its peak
working capital requirements ahead of Christmas 2020;
-- Considering the likely prolonged impact on consumer demand,
the Board do not currently expect to declare a final ordinary
dividend for the year ending 26 April 2020.
The Group notes and appreciates the various actions taken by the
Government to support businesses and their employees during these
challenging times. The reduction in business rates is expected to
provide a monthly cash saving of cGBP1.2m, while the temporary
deferral of HMRC payments will contribute positively to our
short-term cash flow. The announced support for payment of wages
for colleagues is welcomed. However, there remains significant
details to work through to fully understand the impact of all of
these measure on The Group.
Net cash at the end of February 2020 stood at cGBP1.5m and the
Group has access to a GBP25m revolving credit facility (expiring in
June 2021).
Given the continued uncertainty as a result of COVID-19, the
Board does not believe it appropriate to provide guidance for the
financial years ending April 2020 or April 2021 at this time.
The Group will announce a trading update for the year ending 26
April 2020 on 7 May 2020.
Enquiries:
TheWorks.co.uk plc via Teneo
Gavin Peck, CEO
Rosie Fordham, Interim CFO
Teneo
Ben Foster, Haya Herbert-Burns,
Rachel Miller
+44 (0)7776 240806/ +44 (0) 7342 031051/ +44 (0) 7850 656713
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END
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