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Multichannel gifts and toys retailer The Works announces IPO

Multichannel value retailer The Works will start trading on the London Stock Exchange on 19 July.

The fast-growth company, which sells arts & crafts, toys and gifts, said an initial public offering (IPO) price has been set at 160 pence per share, equating to a market capitalisation of £100 million on admission.

The offer is expected to raise £65.2 million of gross proceeds, of which £28.5 million is for the company and £36.7 million is for the selling shareholders which comprises two funds from private equity group Endless, as well as the business’s executive directors and chairman, members of the senior management team and other individuals.

Kevin Keaney, CEO of The Works, commented: "Today represents a significant milestone for The Works and we're extremely pleased with the level of interest we've received from investors in our business.

“They've seen what our customers see every day - a unique and exciting retail experience that combines value, quality and variety that's available online and in-store.”

He added: “With a highly experienced management team, energised staff and compelling offer, we are well-positioned for further growth. We're grateful to our exiting shareholders Endless, whose support has enabled us to get here today and look forward to welcoming new shareholders to join us in this exciting new chapter for the business."

While announcing the IPO, which had been rumoured for some time, the group revealed encouraging trading for the three years ended 29 April 2018. In that time, underlying revenue increased at a CAGR of 14% to £189.3 million, while underlying EBITDA grew at a CAGR of 14.1% to £12 million.

Over the last three financial years, the group has opened a net 134 new retail stores and concessions and the continued roll out of its store network represents a key driver of growth in the business.

In 2017, The Works relocated to a new 183,000 sq ft support and distribution centre which is located in Coleshill, Birmingham and which the directors believe provides the capacity to support up to 1,000 stores and concessions across the UK and Ireland.

Earlier this year, IT director at The Works Tom Scott revealed a range of tech infrastructure investments made in 2017 had boosted the retailer’s performance, adding that eCommerce sales had jumped by around 30% year on year.

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