Shares in TheWorks.co.uk PLC (LSE:WRKS, FRA:6EU) jumped 17% to 43p after the discount books and crafts retailer shut its online shop and upgraded its earnings guidance, winning over investors who had long viewed the loss-making channel as a drag.
The company, which operates more than 500 stores across the UK, blamed repeated failures by two successive third-party fulfilment partners for making the channel unviable and said it would revert to a browse-only website with immediate effect.
The closure will cost around £2 million in exceptional charges this financial year, but the board lifted its 2027 financial year earnings guidance from £12.7 million to £15 million, measured by pre-IFRS 16 adjusted EBITDA, a standard measure of operating profitability that strips out lease costs.
Guidance for the current financial year, restated for continuing operations, was raised from £11 million to £13.5 million.
Like-for-like store sales are up 3.3% in the year to date, and the company said its medium-term target of at least £22.5 million EBITDA by 2030 can now be reached from a lower sales base than originally planned.
The company intends to open a net five new stores this financial year and ten more in the next, with scope for around 100 additional locations over time.