The Works Reports Positive Trading and Strategic Progress Ahead of AGM

Profit guidance: aiming for £11.0m pre-IFRS 16 Adjusted EBITDA

The Board says it is confident in delivering FY26 profit in line with market expectations of pre-IFRS 16 Adjusted EBITDA of £11.0 million. That is the only explicit number in today’s update.

Quick refresher:

• EBITDA is profit before interest, tax, depreciation and amortisation – a proxy for underlying operating cash generation.
• Pre-IFRS 16 means the figure excludes lease accounting changes introduced by IFRS 16, which can otherwise inflate EBITDA for retailers with lots of leased stores.

This guidance matters because it signals that management expects to offset “significant cost headwinds” with cost savings and sustained margin growth. It’s a resilience message.

Margins and costs: resilience, but details not disclosed

The Works highlights “ongoing cost-saving activity and sustained margin growth.” That suggests better buying, mix, pricing, or operational efficiencies are sticking. Exact gross margin or cost-saving figures are not disclosed.

The phrase “significant cost headwinds” nods to the reality of UK retail right now, without spelling out the drivers. The key is that the company believes it is “well-positioned” to absorb these and still progress strategically and financially through FY26.

Why this matters ahead of Christmas

For a value-focused retailer, Christmas can make or break the year. Today’s update says:

• The warehouse can handle more volume due to the mezzanine expansion – fewer bottlenecks when the orders pile in.
• The e-commerce operation should be slicker with the new third-party fulfilment partner – a win for service and potentially cost per order.
• Like-for-like sales momentum is in place heading into peak – even if the exact rate is not disclosed.

Put together, The Works is signalling it is match-fit for the holidays.

Key numbers at a glance

Metric	FY26 YTD / Guidance	Notes
Like-for-like sales (YTD)	Outperforming wider market	Exact percentage not disclosed
Pre-IFRS 16 Adjusted EBITDA (FY26)	£11.0m (market expectations)	Board confident in delivering “in line”
Margins	Sustained improvement	No detailed figures provided
Cost outlook	Significant headwinds	Mitigated by cost-saving actions
Operational capacity	DC mezzanine completed	Increases throughput for peak
Online fulfilment	Transition in final stage	New third-party provider

Dates to note: half-year update on 13 November 2025

We will get the next data point on 13 November 2025, covering the half year to 2 November 2025. That should include hard numbers on like-for-like sales, gross margin, and the early impact of the fulfilment switch. It will also set the tone for the crucial December trading period.

What I’m watching next

• Hard LFL numbers – we know outperformance is there, but the magnitude matters.
• Gross margin trend – confirmation that “sustained margin growth” is continuing into peak.
• Operational KPIs – any colour on fulfilment speeds, online order accuracy, or DC throughput post-mezzanine.
• Cost commentary – how the “significant cost headwinds” are tracking versus plan.

Josh’s take: cautiously positive and operationally focused

This is a tidy, confidence-building statement from The Works. No fireworks, but the right signals: LFL momentum, capacity added, online fulfilment upgraded, and profit delivery in line with market expectations at £11.0 million on a pre-IFRS 16 Adjusted EBITDA basis.

The absence of disclosed LFL figures and margin percentages means we will need the November update to fully validate the narrative. Execution through the fulfilment transition is the swing factor. If the operational upgrades bed in smoothly, The Works looks well placed for a solid Christmas and a steady FY26.

Net: cautiously positive. The story is about controlled execution rather than grand promises – exactly what you want heading into peak trading.