EL7.AI
StocksMedium•12 November 2026•
5 min read

The Works raises minimum annual profit forecast to £17 million

Key Facts

1The company raised its minimum forecast for adjusted EBITDA before IFRS 16 to £17.0 million in FY27, above market expectations.
2Like-for-like sales rose 9.8% in H1 FY27, compared with growth of 4.0% in H1 FY26.
3Sales from continuing operations increased 10.1% to £128.8 million, from £117.0 million in H1 FY26.
4The cash position swung to net cash of £3.5 million, compared with net debt of £5.3 million a year earlier.

The Works raised its forecast for adjusted EBITDA before IFRS 16 in FY27 to at least £17.0 million, above market expectations, according to a trading update issued on November 12 covering the 26 weeks ended November 1, 2026. Its previous guidance was £16.0 million, making the announcement a further increase to its annual profit estimate. The company said the current upgrade, together with the upgrade announced on September 7, lifts its profit forecast by more than 13.0% since the start of the financial year. The update follows an acceleration in like-for-like sales growth and an improvement in its cash position in the first half. The company is now heading into the Christmas trading period, which it described as the next key phase.

Like-for-like sales rose 9.8% in the first half of FY27, compared with growth of 4.0% in the corresponding period of the previous financial year, the company said. Sales from continuing operations also increased 10.1% to £128.8 million, from £117.0 million in the first half of FY26. The comparison shows growth in both like-for-like and total sales over the same period, with the rates tied to specific financial periods. The company said its performance outpaced the broader UK non-food retail market. According to British Retail Consortium data cited in the company's update, like-for-like store sales in the sector fell 1.0% in the six months to October 31, 2026. Including stores and online, sector sales grew 0.6% over the same period.

The Works said the sales figures in the update exclude its online channel, after the board announced on March 20, 2026, its decision to stop trading through it and switch to a non-transactional website. The online channel is presented as a discontinued operation and is therefore excluded from current sales figures for continuing operations. This scope sets the basis for comparing the company's 9.8% like-for-like sales growth with the market data it cited, including the sector figure combining stores and online. The narrower non-food retail market comparison, which covers store performance only, showed a decline of 1.0%. Distinguishing between the two market measures allows the company's performance to be read against the sector trend according to the channels included. The company's total sales figures remain tied to continuing operations, as reported in the first-half update.

The company attributed sales growth to higher sales across all its core categories and to the year-round appeal of its screen-free offerings. Chief Executive Gavin Peck said the company performed strongly during the back-to-school and Halloween seasons. Both seasons fell within the trading period covered by the update, the 26 weeks ended November 1. The company thus links first-half results to product-category performance and specific retail events during the period. The update also indicates that like-for-like sales growth accelerated from the corresponding period a year earlier, rising from 4.0% to 9.8%. This comparison places the seasons cited by the chief executive within the broader picture of first-half performance.

Product margin was 62.7% in the first half of FY27, compared with 62.5% in the corresponding period, and the company said it was in line with expectations. The margin therefore edged up year on year, rather than remaining flat, while staying close to the previous period's level. On its cash position, the group ended the period with net cash of £3.5 million, compared with net debt of £5.3 million a year earlier. The company attributed the change to higher profit levels and improved inventory management. The shift from net debt to net cash accompanied sales growth in the first half, while product margin remained at the level the company said matched its expectations.

The Works forecast adjustment costs of about £1 million in FY27, linked to a systems transformation programme worth about £6 million over the next four years. The company cited these costs alongside its forecast for adjusted EBITDA before IFRS 16, with spending on the programme expected over a four-year period. This provides further context for the £17.0 million minimum guidance in relation to costs tied to the systems plan. The update did not change the fact that the company expects profit to exceed its previous guidance of £16.0 million, and it said the new forecast was above market expectations. According to the company, the upgrade combines the impact of the current update and the previous upgrade announced on September 7, taking the cumulative increase to more than 13.0% since the start of the financial year.

Peck said the company was entering the Christmas trading period "in a good position", adding that its focus was on giving customers more inspiration and choice. The company described the period as the next key trading phase, following a first half that included the back-to-school and Halloween seasons. The Christmas season comes ahead of the FY27 interim results, scheduled for January 21, 2027, according to the company's financial calendar. That announcement will be the next results release after the coming period ends. The company has placed the start of the season at the heart of its message about the next phase, while the interim results date is the next dated milestone on its calendar.