Inspiring reading,
learning, creativity
and play
Annual Report and Accounts 2023
Contents
Strategic report
Highlights 01
Our strategic roadmap 02
Our investment case 03
At a glance 04
Chair’s statement 06
Chief Executive’s review 08
Our marketplace 12
Our business model 14
Our strategy and progress 16
How we measure performance 18
Financial review 19
Our stakeholders 26
Section 172 statement 28
ESG review 29
Task Force on Climate-Related
Financial Disclosures (TCFD) 36
Streamlined Energy and Carbon
Reporting (SECR) 47
Risk management and
principal risks and uncertainties 49
Viability statement 54
Non-financial and sustainability
information statement 57
Corporate governance
Chair’s governance introduction 58
Board of Directors 60
Corporate governance report 62
Audit Committee report 66
Nomination Committee report 70
Directors’ remuneration report 73
Annual report on remuneration 78
Directors’ report 86
Statement of Directors’ responsibilities 89
Financial statements
Independent auditor’s report 90
Consolidated income statement 98
Consolidated statement
of comprehensive income 99
Consolidated statement
of financial position 100
Consolidated statement
of changes in equity 101
Consolidated cash flow statement 102
Notes to the consolidated
financial statements 103
Company statement
of financial position 133
Company statement
of changes in equity 134
Notes to the Company
financial statements 135
Advisers and contacts 140
Our ambition: to become one
of the most loved retailers in the
UK – the go-to place for reading,
learning, creativity and play.
Highlights
Operational highlights
• Resilient performance delivered in FY23 against challenging
backdrop. Well-positioned to capitalise on opportunities
and deliver growth in FY24.
• Continued to refine our customer proposition to more closely
reflect our purpose -
to inspire customers to read, learn, create
and play
– making lives more fulfilled. Rolled out evolved brand
to stores and online to start changing legacy perceptions of The
Works and more accurately reflect the business today.
• Refreshed the product offering, launching new own brand
products such as “PlayWorks” toy range. Increased book market
share by stocking more front-list titles from best-selling authors
such as Julia Donaldson and Colleen Hoover.
• Further enhanced the quality of the store estate with 14 new
openings (which are trading ahead of expectations), three
relocations and 13 store closures. Continued to optimise
the existing estate with an investment of c.£1.4m in 34 refits,
improving the customer experience by enhancing layouts,
improving signage and optimising space utilisation.
• Invested in operational improvements, the significant benefits of
which are expected to be fully realised in FY24 and beyond. This
included restructuring the distribution centre management team,
implementing a new stock allocation system, and introducing
a new automated packing machine at our online fulfilment
provider, iForce.
• Launched a review of the business operating model to drive
effectiveness and efficiencies, improve processes and IT systems,
particularly in relation to the flow of stock through the business.
• Restructured management of the online operation to drive improved
performance. Increased focus on customer experience of the
website and introduced new tools to support analysis and provide
insights into how best to improve performance.
• Placed 12th in ‘Best Big Companies to Work For’, up from 13th
in each of the past two years, and maintained 2* accreditation
for ‘outstanding’ workplace engagement.
Visit our corporate website
corporate.theworks.co.uk
Financial highlights
Revenue
£280.1m
FY22: £264.6m
Like-for-like (LFL) sales growth
2
+4.2%
FY22: +10.5%
Adjusted basic EPS
16.5p
Restated
1
FY22: 26.0p
Profit before tax
£5.0m
Restated FY22: £14.2m
Dividend
1.6p
FY22: 2.4p
Basic EPS
8.4p
Restated
1
FY22: 22.3p
Non-IFRS 16 Adjusted EBITDA
£9.0m
FY22: £16.6m
Adjusted PBT
£10.1m
Restated FY22: £16.5m
1 See note 14 to the financial statements.
2 LFL sales growth has been calculated with reference to the FY22 comparative sales figures. In FY22’s Annual Report, two-year comparatives were used
because the use of a normal one-year LFL comparative was prevented by the various disruptions to store trading brought about by COVID-19 restrictions
in the FY21 comparative period.
Financial statementsCorporate governanceStrategic report
TheWorks.co.uk plc Annual Report and Accounts 2023 01
Our strategic roadmap
TheWorks.co.uk plc Annual Report and Accounts 202302
Creating a better,
not just bigger business
Our purpose and strategy aim to bring our well-loved brand to life
and make The Works ‘better, not just bigger’.
Read more about our culture on page 32
Our purpose
To inspire reading, learning, creativity and play –
making lives more fulfilled.
Develop our
brand and
increase
customer
engagement
Our colleagues Our systems and data Our ESG commitments
Enhance
our online
proposition
Optimise our
store estate
Drive
operational
improvements
Our ambition
To become one of the most loved retailers
in the UK.
Read more about our strategy on pages 16 and 17
Read more about our ESG approach on pages 29 to 35
Our better, not just bigger strategy
Our strategic enablers
Underpinned by our values