The Works opens higher as activist investor increases stake in 'undervalued' high street retailer
Shares in The Works opened higher this morning as an activist investor upped its stake in the 'undervalued' retailer.Private equity firm Kelso Group Holdings has increased its stake in the retailer, which runs 500 stores, from 6.6 per cent to 7 per cent.The Works, which suffered a gloomy Christmas, trades at a market capitalisation of around £22.6million as of Friday's closing price, despite generating revenue of £277million in the year to April 2025.Kelso believes The Works 'is one of the most undervalued companies on the UK stock markets' and had written to the board 'outlining several constructive proposals aimed at closing this clear valuation gap'. Undervalued: Private equity firm Kelso has increased its stake in The WorksShares in The Works rose 4.7 per cent to 38.3p to reach a two-month high and a market cap of around £23.75m.The shares are up nearly 12 per cent so far this year but have dropped by over 38 per cent since their peak last July.The Works has struggled amid subdued consumer spending, reporting a sharp drop in online sales following problems with a new delivery provider ahead of Christmas. But there were some signs of growth, having narrowed its pre-tax losses from £6.5million to £5.1million.Kelso, which also holds stakes in online retailer THG and fishing tackle seller Angling Direct, pointed to The Works' expected growth over the next year.'Despite this continued improvement in performance, driven by strong operational management, The Works is currently trading on an EV/EBITDA multiple of just 1.65x and a revenue multiple of 0.05x,' it said.Kelso first acquired a holding in the firm in September 2023 and gained two board seats two years ago.AJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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The Works opens higher as activist investor increases stake in 'undervalued' high street retailer
