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They can see the opportunity. In 2022 each store contributed about £88k. If the team can maintain margins and increase sales by 6%, and then add 6% more stores, group profit goes up from £5m to about £15m. Sort out online sales/costs and you are approaching £20m profit each year.
They have upped their stake.
I must delve deeper then.
None of the board are drawing wages
Interesting - £4.5m market cap. Is this a company that takes the fee revenue from their investments?
My fear would be that the wages will always eat up the revenue.
At 2.3p KLSO looks a cheap investment too.
At least I concur with their investment decision on half of the shares in their portfolio. Excellent solid value here at WRKS. If you look at the Mcap on a per store value (they have c.525 stores remember) its a no-brainer - great product strategy and positioning too.
Https://www.lse.co.uk/rns/KLSO/new-investment-theworkscouk-plc-0l51tx2gt1mj8ac.html
"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."
"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/EBITDA1 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 £1.0 million. Kelso believes that at such valuation levels TheWorks' cash is better served by buying its shares back for cancellation rather than paying dividends."
Next Wilko? I would say 'not'. Fundamentals, momentum and finances are not even close. Just been taking a look at their 2023 annual report, and I must say the articulation their strategy and direction is impressive. Their clear direction and purpose will I think be well rewarded over the coming years. Stores are sensibly-sized, good stock/floor area ratio, well stocked with some recognisable branded titles/products and importantly healthily busy. Online sales represent c.10%. If they have to trim down a few non performing stores - or if decent rents can't be negotiated, the small store size and relatively short rental terms make it manageable to do so. Board are massively experienced. Shares looking undervalued to me.
Why would you say that?
This one surely has to be the next to fold on the High Street.
14 new stores were opened in great locations which are trading ahead of expectations, 13 stores were closed, 3 stores were relocated to new units, 1.4M was spent on the refit of 34 stores leaving a total of 526 stores operational with a potential of about 600 stores.
I have been trawling there accounts, so they have 9M ebitda, 5M profit, - 1M to pay dividend at 1.6p, 10.2M in cash, 33.4M in stock 30.2M stock in hand 3.2M stock in transit. So they are well solvent! !! 18M valuation rediculous these are due a big upturn upwards toward 50-60p and I am buying some more. gl
The dividend was a bit disappointing.
However there was no shocking news, the auditor should have completed on time.
If the auditor had completed on time the price would be 3p higher.
The company should be compensated for the delay in the audit.
The group has got everything in hand , 10.2 M cash , 9M ebitda, 5M profit, a good future business strategy, 50p + soon gl.
I have found the accounts really hard to understand this time around. Losses from adjusted items and impairments and revisions. I can't work it out yet sadly.
But, the market cap. is only £17.5m and they have £10m cash. Growing sales to £280m, over 500 shops and the next dividend of 1.6p is nearly 6%. So I am sticking around.
Found it, they didn't pay any tax as they had an un-expected tax credit.
So net profit was about £5m .
So now this doesn't look to bad for this year and worth a punt at this price and a divi to come.
Yes I said all that but did they make a profit after tax or was it a nett loss???.
Couldn't find that info anywhere.
Are they hidding it ?
Yes, they made £10.1 excluding impairment charges. After including impairment charges they made £5.0m.
"The Group made a profit before tax of £5.0m (restated FY22: £14.2m). This result includes a £5.1m impairment charge, most of which relates to the notional right of use asset created as a result of following the requirements of the IFRS 16 accounting standard. As in previous periods, impairments have been treated as Adjusting items. The Adjusted profit before tax excluding impairment charges was £10.1m"
So they came in at about £10 before tax but in the end the Group made a profit before tax of £5.0m (restated FY22: £14.2m). This result includes a £5.1m impairment charg.
So did they make a profit after tax ? can't find that anywhere.
Hi I think the upturn will be higher than 41p I would estimate it to be 48 to 55p because I believe that this stock is very undervalued.
Having said that I do believe that the board should sometimes be more positive and determined because there as been too much negitavity in the past. I want to see some optimism and growth, which will generate more institutional interest.
The reasoning in this is because they sell a lot of items which when compared with similar stores that sell some of the same items Works are better than their competitors. Because I watch those as well. Gl .
I watched a shop today for about an hour around the till 26 / 08 / 23 and they took about £100 which on average is about 50k an hour average across all shops. like they said in an RNS " comfortable" .
Large down trendline is intersecting or will intersect sp, soon. The volume has dried up for 3 consecutive months, which is bullish. If the sp, can close above 34, buy, with a price target of 41.
Hi the results are now delayed until Wednesday 30th August due to the auditers having not completed the audit.
In my opinion the dividend will be 2.4p though we might hope it will be more maybe 2.5p afterall we want to see some progressive increase in profits, or maybe a special divi because of the strong Christmas sales. Afterall 2.4p costs only 1.5M out of the ebitda.
So I think these are value at 32p but we all make our own decisions good luck.
Like many I have been following these for months and waiting to see if they have turned the corner. They say this work will not impact the pre IFRS 16 Adjusted EBITDA, which is expected to be £9.0 million as previously stated.
But will there be any profit after tax ?and if they do go a divi will it be 0.5p or 1p any ideas.
I thought about buying some on Monday just before the results or shouls I wait.
It is the Auditers fault that the results are not ready and not the Company. Maybe they will use a different firm next time.
However the EBITDA is still looking like 9m so there would have to be a massive slump in retail to change that.
So what with the 9m EBITDA and 10.2 million in cash those numbers alone cover the entire share capital, so the shares are amazingly cheap at 33p they have also said that they will set the (level) of the dividend in the results, so there is certainly going to be a dividend . I heve watched the activity in the shops forever and they are doing okay, also I have noticed that the exclusive to Works artistic hobby sets and Wool etc seem to be selling well because there is always some gaps on the shelf.
So finally I think if we sit tight we will be quids in gl.