LSE:WRKS

Stock Analysis Report

Executive Summary

TheWorks.co.uk plc engages in the retail sale of gifts, arts, crafts, toys, books, and stationery products in the United Kingdom and Ireland.

Rewards

Trading at 68.4% below its fair value

Revenue is forecast to grow 9.85% per year

Became profitable this year

Risk Analysis

Earnings have declined by -41.29% per year over past 5 years

Interest payments are not well covered by earnings

Unstable dividend track record

Highly volatile share price over past 3 months

+ 2 more risks


Snowflake Analysis

Undervalued average dividend payer.


Similar Companies

Share Price & News

How has TheWorks.co.uk's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WRKS's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0.8%

WRKS

6.0%

GB Specialty Retail

10.0%

GB Market


1 Year Return

-83.6%

WRKS

-31.7%

GB Specialty Retail

-23.0%

GB Market

Return vs Industry: WRKS underperformed the UK Specialty Retail industry which returned -31.7% over the past year.

Return vs Market: WRKS underperformed the UK Market which returned -23% over the past year.


Shareholder returns

WRKSIndustryMarket
7 Day0.8%6.0%10.0%
30 Day-40.8%-34.1%-17.6%
90 Day-31.2%-43.2%-27.3%
1 Year-82.7%-83.6%-29.4%-31.7%-18.9%-23.0%
3 Yearn/a-33.8%-40.2%-12.9%-24.2%
5 Yearn/a-35.6%-45.6%1.6%-21.8%

Price Volatility Vs. Market

How volatile is TheWorks.co.uk's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is TheWorks.co.uk undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WRKS (£0.2) is trading below our estimate of fair value (£0.63)

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


Price To Earnings Ratio

PE vs Industry: WRKS is good value based on its PE Ratio (4.9x) compared to the Specialty Retail industry average (7.5x).

PE vs Market: WRKS is good value based on its PE Ratio (4.9x) compared to the UK market (12.4x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate WRKS's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: WRKS is good value based on its PB Ratio (0.5x) compared to the GB Specialty Retail industry average (0.7x).


Next Steps

Future Growth

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

9.8%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if WRKS's forecast earnings growth is above the savings rate (0.5%).

Earnings vs Market: Insufficient data to determine if WRKS's earnings are forecast to grow faster than the UK market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: WRKS's revenue (9.8% per year) is forecast to grow faster than the UK market (2.3% per year).

High Growth Revenue: WRKS's revenue (9.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if WRKS's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

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

-41.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WRKS has high quality earnings.

Growing Profit Margin: WRKS became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: WRKS's earnings have declined by -41.3% per year over the past 5 years.

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 (1.5%).


Return on Equity

High ROE: WRKS's Return on Equity (10%) is considered low.


Next Steps

Financial Health

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


Financial Position Analysis

Short Term Liabilities: WRKS's short term assets (£54.6M) do not cover its short term liabilities (£79.1M).

Long Term Liabilities: WRKS's short term assets (£54.6M) do not cover its long term liabilities (£94.6M).


Debt to Equity History and Analysis

Debt Level: WRKS's debt to equity ratio (58.6%) is considered high.

Reducing Debt: Insufficient data to determine if WRKS's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: WRKS's debt is well covered by operating cash flow (86.2%).

Interest Coverage: WRKS's interest payments on its debt are not well covered by EBIT (2.3x coverage).


Balance Sheet

Inventory Level: WRKS has a high level of physical assets or inventory.

Debt Coverage by Assets: WRKS's debt is covered by short term assets (assets are 3.9x debt).


Next Steps

Dividend

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

24.06%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: WRKS's dividend (24.06%) is higher than the bottom 25% of dividend payers in the UK market (2.69%).

High Dividend: WRKS's dividend (24.06%) is in the top 25% of dividend payers in the UK market (7.48%)


Stability and Growth of Payments

Stable Dividend: Too early to tell whether WRKS's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if WRKS's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (88.9%), WRKS's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WRKS's dividends in 3 years are forecast to be covered by earnings (68.2% payout ratio).


Next Steps

Management

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

1.7yrs

Average board tenure


CEO

Gavin Peck (38yo)

0.17

Tenure

UK£179,000

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 Theworks.Co.Uk Plc since April 201 ...


CEO Compensation Analysis

Compensation vs Market: Gavin's total compensation ($USD222.06K) is below average for companies of similar size in the UK market ($USD335.89K).

Compensation vs Earnings: Insufficient data to compare Gavin's compensation with company performance.


Board Members

NamePositionTenureCompensationOwnership
Gavin Peck
CEO & Director0.17yrUK£179.00k0.89% £110.7k
Harry Michael Morley
Senior Independent Non-Executive Director1.67yrsUK£43.00k0.050% £6.2k
Dean Hoyle
Chairman1.67yrsUK£78.00k16.75% £2.1m
Catherine Glickman
Independent Non-Executive Director1.67yrsUK£39.00k0.051% £6.3k

1.7yrs

Average Tenure

53yo

Average Age

Experienced Board: WRKS's board of directors are not considered experienced ( 1.7 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: WRKS insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 38%.


Top Shareholders

Company Information

TheWorks.co.uk plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: TheWorks.co.uk plc
  • Ticker: WRKS
  • Exchange: LSE
  • Founded: 1981
  • Industry: Specialty Stores
  • Sector: Retail
  • Market Cap: UK£12.469m
  • Shares outstanding: 62.50m
  • Website: https://www.theworksplc.co.uk

Number of Employees


Location

  • TheWorks.co.uk plc
  • Boldmere House
  • Faraday Avenue
  • Birmingham
  • West Midlands
  • B46 1AL
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WRKSLSE (London Stock Exchange)YesOrdinary SharesGBGBPJul 2018

Biography

TheWorks.co.uk plc engages in the retail sale of gifts, arts, crafts, toys, books, and stationery products in the United Kingdom and Ireland. The company sells its products through a network of stores, as well as through its online platform. As of April 28, 2019, the company operated 497 stores in the United Kingdom and Ireland. The company was formerly known as Theworks.Co.Uk Limited and changed its name to TheWorks.co.uk plc in July 2018. TheWorks.co.uk plc was founded in 1981 and is headquartered in Birmingham, United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 00:32
End of Day Share Price2020/03/30 00:00
Earnings2019/10/27
Annual Earnings2019/04/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.