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An update from Insight Business Support Plc ( (GB:KLSO) ) is now available.
Kelso Group Holdings Plc, a listed UK investment vehicle specialising in under-valued small and mid-cap stocks where it seeks to unlock value through active engagement, has built a concentrated portfolio including TheWorks.co.uk, Saga, THG and several other names. The firm leverages its highly experienced board to influence strategy, capital allocation and investor relations across its investee companies, aiming to close valuation gaps in the domestic market.
Kelso has increased its stake in TheWorks.co.uk Plc, the UK’s leading specialist retailer of affordable, screen-free activities, from 6.6% to 7.0%, underscoring its conviction that the chain is significantly undervalued. Despite The Works’ 500-store footprint, rising EBITDA and net cash, and expectations for further profit and cash growth, the retailer trades on very low EV/EBITDA and revenue multiples, prompting Kelso to send the board a set of proposals designed to help narrow what it views as a clear disconnect between performance and market valuation.
The Works reported revenue of £277m for the year to April 2025 and a 58% year-on-year rise in EBITDA pre-IFRS 16 to £9.5m, with 2026 EBITDA forecast at £11.0m and net cash expected to rise to at least £5.0m. Kelso argues that these metrics, achieved alongside continued investment in store expansion, are not reflected in the current valuation, and its more assertive shareholder stance may increase pressure on The Works’ board to pursue strategies that could unlock greater value for investors.
Clarity around The Works’ capital allocation, growth plans and market communication is likely to come into sharper focus as Kelso presses its case, potentially influencing broader sentiment towards UK value retailers. The move also illustrates Kelso’s wider strategy of using incremental stake-building and targeted engagement to catalyse re-ratings in overlooked domestic equities, a model that could resonate with other activist-style investors in the UK small and mid-cap arena.
The most recent analyst rating on (GB:KLSO) stock is a Hold with a £3.00 price target. To see the full list of analyst forecasts on Insight Business Support Plc stock, see the GB:KLSO Stock Forecast page.
Spark’s Take on GB:KLSO Stock
According to Spark, TipRanks’ AI Analyst, GB:KLSO is a Neutral.
The score is weighed down primarily by the sharp deterioration in financial performance and cash generation in 2024 versus 2023, despite a relatively solid balance sheet. Technical indicators are broadly neutral with slightly weak short-term momentum, and valuation cannot be assessed due to missing P/E and dividend yield data.
To see Spark’s full report on GB:KLSO stock, click here.
More about Insight Business Support Plc
Kelso Group Holdings Plc is a London-listed investment vehicle focused on under-valued UK small and mid-cap companies, typically holding fewer than ten positions. Backed by over 75 business associates and some institutions, its board owns around 20% of the company and brings extensive experience across fund management, corporate broking, M&A, private equity and law.
Kelso targets companies where it can play an active role in unlocking value, offering strategic, capital allocation and investor relations input. Its declared holdings span sectors and include CVS Group, Saga, NCC Group, THG, Angling Direct, TheWorks.co.uk and Selkirk, with an average market capitalisation of about £400m.
TheWorks.co.uk Plc is the UK’s leading specialist retailer of affordable, screen-free family activities, trading through more than 500 stores across the UK and Ireland and online. Its product mix covers arts and crafts, stationery, toys and games, and books, positioning it in value-focused, non-digital leisure and educational spending for households.
Average Trading Volume: 313,279
Technical Sentiment Signal: Sell
Current Market Cap: £12.39M
For detailed information about KLSO stock, go to TipRanks’ Stock Analysis page.