REG - Kelso Group Holdings - Update on Investment: TheWorks.co.uk plc

Kelso groupAnnouncement

05/10/2023 07:00

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RNS Number : 7329O  Kelso Group Holdings PLC  05 October 2023

Kelso Group Holdings Plc ("Kelso")

 

Update on Investment: TheWorks.co.uk Plc ("TheWorks")

 

 

The Board of Kelso notes the results yesterday of the TheWorks' AGM
resolutions. In particular, we draw attention to Resolution 2, which was not
passed, having been voted against by c.65% of shareholders, which proposed
paying a final dividend.

 

Kelso holds 2.9 million shares, representing 4.6% of the issued shares. We are
supportive of management and voted for all resolutions with the exception of
Resolution 2. We believe, given the low valuation of TheWorks of c.1.4x
EV/EBITDA(1) (excluding IFRS 16 lease liabilities) that the company's cash is
better used by buying back its shares for cancellation. Kelso looks forward to
engaging with the management of TheWorks on this matter.

 

We strongly believe that the intrinsic value of TheWorks is significantly
higher than the current value. We also believe that its position in the UK
high street with a dozen own brands at the value end of arts and craft
products, stationery, games and books all in the creative and learning arena
is a good defensive part of the market.

 

(1)Calculated as current market capitalisation (£23.9m) less net cash
(£10.2m), divided by expected FY24 EBITDA (£10.0m). Figures taken from
TheWorks' announcement on 30 August 2023.

( )

 

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.

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