TheWorks.co.uk (LSE:WRKS) - Share price, News & Analysis

Q: What is the Fair Price of WRKS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

WRKS (£0.43) is trading below our estimate of [[fair value]] (£4.53)

WRKS fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	4/6
Past Performance	2/6
Financial Health	4/6
Dividends	0/6

WRKS Stock Overview

TheWorks.co.uk plc operates as a retailer of gifts, arts, crafts, toys, books, and stationery products.

Rewards

Trading at 90.5% below our estimate of its fair value

Earnings are forecast to grow 37.52% per year

Became profitable this year

Risk Analysis

Large one-off items impacting financial results

Does not have a meaningful market cap (£27M)

TheWorks.co.uk Competitors

Gear4music (Holdings)

AIM:G4M

UK£37.8m

Angling Direct

AIM:ANG

UK£30.9m

Stanley Gibbons Group

AIM:SGI

UK£6.2m

Scholium Group

AIM:SCHO

UK£5.8m

Price History & Performance

Summary of all time highs, changes and price drops for TheWorks.co.uk
Historical stock prices
Current Share Price	UK£0.43
52 Week High	UK£0.72
52 Week Low	UK£0.42
Beta	2
1 Month Change	-19.48%
3 Month Change	-15.02%
1 Year Change	-29.97%
3 Year Change	-37.68%
5 Year Change	n/a
Change since IPO	-75.84%

Recent News & Updates

Jan 23

Need To Know: Analysts Are Much More Bullish On TheWorks.co.uk plc (LON:WRKS)

Celebrations may be in order for TheWorks.co.uk plc ( LON:WRKS ) shareholders, with the analysts delivering a...

Nov 16

TheWorks.co.uk plc's (LON:WRKS) Intrinsic Value Is Potentially 18% Below Its Share Price

How far off is TheWorks.co.uk plc ( LON:WRKS ) from its intrinsic value? Using the most recent financial data, we'll...

Shareholder Returns

	WRKS	GB Specialty Retail	GB Market
7D	-9.5%	1.8%	2.4%
1Y	-30.0%	-25.4%	-6.7%

Return vs Industry: WRKS underperformed the UK Specialty Retail industry which returned -25% over the past year.

Return vs Market: WRKS underperformed the UK Market which returned -6.8% over the past year.

Price Volatility

Is WRKS's price volatile compared to industry and market?
WRKS volatility
WRKS Average Weekly Movement	6.0%
Specialty Retail Industry Average Movement	6.3%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.6%
10% least volatile stocks in GB Market	2.8%

Stable Share Price: WRKS is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: WRKS's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1981	3,600	Gavin Peck	https://www.theworksplc.co.uk

TheWorks.co.uk plc operates as a retailer of gifts, arts, crafts, toys, books, and stationery products. The company sells its products through a network of stores, as well as through its online platform. As of May 2, 2021, it operated 527 stores in the United Kingdom and Ireland.

TheWorks.co.uk Fundamentals Summary

How do TheWorks.co.uk's earnings and revenue compare to its market cap?
WRKS fundamental statistics
Market Cap	UK£26.88m
Earnings (TTM)	UK£113.00k
Revenue (TTM)	UK£207.82m

238.9x

P/E Ratio

0.1x

P/S Ratio

Is WRKS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
WRKS income statement (TTM)
Revenue	UK£207.82m
Cost of Revenue	UK£177.51m
Gross Profit	UK£30.32m
Other Expenses	UK£30.20m
Earnings	UK£113.00k

Last Reported Earnings

Oct 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.0018
Gross Margin	14.59%
Net Profit Margin	0.054%
Debt/Equity Ratio	-2.6%

How did WRKS perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is WRKS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for WRKS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for WRKS. This is calculated by dividing WRKS's market cap by their current preferred multiple.
What is WRKS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£26.88m

WRKS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.6x
Enterprise Value/EBITDA	-79.8x
PEG Ratio	6.4x

Price to Sales Ratio vs Peers

How does WRKS's PS Ratio compare to its peers?

WRKS PS Ratio vs Peers

The above table shows the PS ratio for WRKS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	0.5x
G4M Gear4music (Holdings)	0.3x	9.5%	UK£37.8m
ANG Angling Direct	0.4x	n/a	UK£30.9m
SGI Stanley Gibbons Group	0.6x	n/a	UK£6.2m
SCHO Scholium Group	0.8x	n/a	UK£5.8m
WRKS TheWorks.co.uk	0.1x	9.6%	UK£26.9m

Forward PS

Price-To-Sales vs Peers: WRKS is good value based on its Price-To-Sales Ratio (0.1x) compared to the peer average (0.5x).

Price to Earnings Ratio vs Industry

How does WRKS's PE Ratio compare vs other companies in the GB Specialty Retail Industry?

Price-To-Sales vs Industry: WRKS is good value based on its Price-To-Sales Ratio (0.1x) compared to the UK Specialty Retail industry average (0.3x)

Price to Sales Ratio vs Fair Ratio

What is WRKS's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

WRKS PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	0.1x
Fair PS Ratio	0.1x

Price-To-Sales vs Fair Ratio: WRKS is good value based on its Price-To-Sales Ratio (0.1x) compared to the estimated Fair Price-To-Sales Ratio (0.1x).

Share Price vs Fair Value

What is the Fair Price of WRKS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: WRKS (£0.43) is trading below our estimate of fair value (£4.53)

Significantly Below Fair Value: WRKS is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: WRKS is poor value based on its PEG Ratio (6.4x)

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Future Growth

How is TheWorks.co.uk forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

37.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: WRKS's forecast earnings growth (37.5% per year) is above the savings rate (0.9%).

Earnings vs Market: WRKS's earnings (37.5% per year) are forecast to grow faster than the UK market (11% per year).

High Growth Earnings: WRKS's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: WRKS's revenue (9.6% per year) is forecast to grow faster than the UK market (4.1% per year).

High Growth Revenue: WRKS's revenue (9.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: WRKS's Return on Equity is forecast to be low in 3 years time (15.3%).

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Past Performance

How has TheWorks.co.uk performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-40.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: WRKS has a large one-off gain of £12.8M impacting its October 31 2021 financial results.

Growing Profit Margin: WRKS became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: WRKS has become profitable over the past 5 years, growing earnings by -40.9% per year.

Accelerating Growth: WRKS has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: WRKS has become profitable in the last year, making it difficult to compare its past year earnings growth to the Specialty Retail industry (46.2%).

Return on Equity

High ROE: WRKS's Return on Equity (1.1%) is considered low.

Discover strong past performing companies

Financial Health

How is TheWorks.co.uk's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: WRKS's short term assets (£73.8M) do not cover its short term liabilities (£93.5M).

Long Term Liabilities: WRKS's short term assets (£73.8M) do not cover its long term liabilities (£94.5M).

Debt to Equity History and Analysis

Debt Level: WRKS is debt free.

Reducing Debt: WRKS has no debt compared to 5 years ago when its debt to equity ratio was 549.3%.

Debt Coverage: WRKS has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: WRKS has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is TheWorks.co.uk current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

5.58%

Forecast Dividend Yield

Dividend Yield vs Market

Notable Dividend: Unable to evaluate WRKS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate WRKS's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if WRKS's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if WRKS's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: WRKS is not paying a notable dividend for the UK market.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as WRKS has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.9yrs

Average board tenure

CEO

Gavin Peck (40 yo)

2.42yrs

Tenure

UK£303,000

Compensation

Mr. Gavin Lee Peck has been Chief Executive Officer of Theworks Co.Uk Plc since January 16, 2020 and serves as its Director. Mr. Peck served as Chief Financial Officer of TheworksCo.Uk Plc since April 201...

CEO Compensation Analysis

Compensation vs Market: Gavin's total compensation ($USD367.30K) is about average for companies of similar size in the UK market ($USD332.74K).

Compensation vs Earnings: Gavin's compensation has been consistent with company performance over the past year.

Board Members

Experienced Board: WRKS's board of directors are considered experienced (3.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/29 00:00
End of Day Share Price	2022/06/29 00:00
Earnings	2021/10/31
Annual Earnings	2021/05/02