Kelso Group Holdings PLC New Investment - TheWorks.co.uk plc (4383N)
2023年9月25日 - 3:00PM
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RNS Number : 4383N
Kelso Group Holdings PLC
25 September 2023
Kelso Group Holdings Plc ("Kelso" or the "Company")
Investment in TheWorks.co.uk plc ("TheWorks")
Kelso, the main market listed investment company, is pleased to
announce that it has made its second investment, having purchased
2.0 million ordinary shares in TheWorks (LSE: WRKS) at an average
price of 31.3p, representing 3.2% of the issued share capital of
TheWorks.
TheWorks is the UK's leading family friendly retailer of value
gifts, arts and crafts, toys and books and stationery products with
12 of its own brands, representing c.30% of revenue. It has a clear
purpose of inspiring people to read, learn, create and play.
Established in 1981, with currently 525 stores across the UK and
Ireland, it was floated on the London Stock Market in July 2018
with a valuation of approximately GBP100 million at 160p per
share.
On 30 August 2023, TheWorks reported its preliminary results for
the year ended 30 April 2023 with revenue of GBP280.1 million,
Adjusted EBITDA of GBP9.0 million and Adjusted PBT of GBP10.1
million. It also reported net cash of GBP10.2 million. For the year
to date, TheWorks reported store like for like sales growth of 3.1%
and an Adjusted EBITDA guidance for the current year to April 2024
of GBP10.0 million. The current share price is c.36.5p resulting in
a market capitalisation GBP22.8 million.
Kelso believes that the business proposition of TheWorks is
strong with its focus on affordability and that the valuation is
highly attractive at an EV/EBITDA(1) of c.1.2x. Kelso is supportive
of the current board and has voted for all of the resolutions
proposed at the forthcoming general meeting on 4 October 2023, save
for the resolution proposing a final dividend of 1.6p per share
equating to GBP1.0 million. Kelso believes that at such valuation
levels TheWorks' cash is better served by buying its shares back
for cancellation rather than paying dividends.
Kelso believes strongly in the strategy and product range of The
Works. Arts and craft, puzzles, games and books have an important
place in life especially when focussed at the value end of the
product spectrum. We are very excited about our new investment and
helping restore the intrinsic valuation of The Works which we
believe is significantly higher than the current price.
(1) Excluding IFRS 16 lease liabilities
For further information please contact:
Kelso Group Holdings plc +44 (0) 75 4033 3933
John Goold, Chief Executive Officer
Mark Kirkland, Chief Financial Officer
Jamie Brooke, Chief Investment Officer
About Kelso
Kelso was established in 2022 to identify, engage and unlock
trapped value in the UK stock market. Kelso's strategy is to invest
in situations where there is an anomaly between the intrinsic value
and prospects of a company and its stock market valuation. Kelso
will, in particular, look for situations where it believes the sum
of the parts of a business is greater than the current value. Kelso
believes that the current market conditions are such that there are
situations where UK listed companies' valuations are not
appropriately matched to their underlying intrinsic value. There
may be instances where Kelso itself could be used as a vehicle by
an undervalued company to spin off a subsidiary into its own
listing. Such a transaction would undoubtedly constitute a reverse
takeover for Kelso.
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