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Poker- I play golf with an area manager for Sainsbury’s. I can only say one thing after listening to his stories, I wouldn’t want to work for them at any level. They want their pound of flesh and then some. Treat staff like dirt and there’s a culture of reporting each other and having constant disciplinaries for the most trivial of matters. Just awful. JS may have been authoritarian but the new breed are worse!
I saw John Sainsbury passed away this week...blimey ..in his day..he ran Sainsbury's with an iron rod....everyone was terrified of him..he used fear as a tool to get standards high..
Store Managers begged to be told 6 weeks in advance of a store visit ...
Store visits from that guy makes what MM gets from the City..look like a walk in the park
Those were the days ...jeez
No..MM isnt a con man...but...they do need to be totally on the ball now with every costing and every guidance....the honeymoon period of post IPO is over and you can tell the analysts etc are ...in many ways ...pushing the CEO and CFO to be better ..not just seeking revenues but now squeezing the best returns from the capital employed...there needs to be a strong sense of target setting with regards to areas of the balance sheet..in order to tighten returns ....on top of achieving integration of acquisitions ...
Any acquisitions have to provide the returns on which they based the purchase price...plus..
Being a CEO of a £2.2b turnover company isnt easy ..for sure....and you always have the City to answer to....always
I was once a PA for a FTSE 100 CEO ...jeez he was demanding...and on top he then had a group Chairman to answer to....even more demanding ( you werent expected to ask how to do anything...you just had to do it !!!)
The short attack is also of course aimed at growth sector in general....ROO, BOO, THG, AO..etc etc all getting a share price slicing at the knee
Shorters are in danger of leaving things too cheap....they will want to keep up the fear..to keep buyers out...volume down....and a clearer initial path for an exit...
I just hope the CEO and CFO ...realise the need to listen to the criticism and not take it all too personally....plenty of CEOs have been hauled over the coals by the City...
I watched the ROO webcast a couple of days ago....it was good..better than THG...loads of slides with graphs etc to illustrate the update...the CEO and CFO were very strong with their verbal presence and very focused on the facts and figures...
I still think there is much room for improvement still with how the team here present themselves to their investors...
I do agree with Fordy in one sense. People need to stop focusing incessantly on short attacks. In this instance, the shorts are a by-product of the strange management performances and unconventional company structure. This is exactly how shorts are supposed to work. Hopefully it will wake MM from his narcissistic coma. What I don’t agree with is his constant assertion that Moulding is a conman. This is just sour grapes and because, like me, he is quite a few quid under.
Do you know whatever happened to the idea of Ingenuity working with GSK to supply vitamins etc D2C ....i read about that a while back but havent followed anything since...
" I also wasn’t saying whey will revert any time soon "
Dan, I didnt actually say you did....no need to make any such assumption
I thought MM said they were buying 6 months or 3 month but of course we dont know exactly how far into the latest 6 month they are currently in and when exactly they may choose one final 3 month before supplies improve ...they will no doubt monitor things closely ..i doubt they would want to place 3 month, after 3 month.....all really depends on how the 6 month cycle is timed
Most places that I have read have suggested it wont be any time soon for better supply ...and meanwhile a lot of the dairy associations have put up all their prices at the beginning of the year
I enjoy reading your posts/ views, be it here or Boo/ ASOS
Ditto Kalls counter argument, it’s good that you guys now debate without any personal comments.
Personally I can’t see investor sentiment to buy into THG changing materially to the upside until Beauty is spun off, if there was a buyer at the right price then sell Nutrition and Ingenuity becomes a standalone business possibly with a Nasdaq quote
Re Ingenuity , the market currently can’t evaluate its cash requirement ditto current cash burn, as such at group level we are being valued at 10X EBITA plus cash.
Use the cash from the sale of Nutrition to fund Ingenuity - not sure what value for nutrition ?
Suggest this is the catalyst to turn sentiment and unlock value
They are buying spot price for whey atm. That’s exactly what MM said they were doing on the call
They usually buy 6 months in advance but as the price is elevated they have gone to spot so they can be quick to drop prices on way down
I also wasn’t saying whey will revert any time soon I was just saying the whey price was out last night and it was up (5% or so)
Amazon share price is held together by AWS ....retail Prime side may well make a loss this quarter...their guidance was to do whatever it costs to serve their customers ...keep their customers loyal
The shares are now " game-on" for whoever wants them....and whilst retail fears the very short term...other investors (probably American ) may well see an opportunity to buy a stake ....
By no means are the shorters the only ones wanting to now feed from the carcass....
" No director buying since statement "
I noticed a few retailers are now in a closed period before announcing full or prelim results..the trading updates being a pre-result update
Is that the case here...??
" as whey prices improve (btw they got worse last night - a big jump) "
The supply wont improve to meet demand until mid year....the Chinese are now big importers too...
The higher price I suspect is the Spot price....i doubt THG buys in the Spot market....they have contracted orders placed months in advance..
The general price increases affects every player in the market....and gives good reason to look for non-animal based alternatives
Short-selling is a matter of "fact", and short-sellers do drive down prices!
Stop with the short sellers, that is what you have chosen to hear, not the truth, the short sellers do not have such a huge impact on a company, sentiment does and the sentiment says that MM cannot be trusted.
Sure short sellers are making money, like crows feeding on roadkill, they they did not kill THG, MM did with his mouth.
Peloton dropped nearly 80%, not from short sellers, but sentiment, there is less demand for stationary bikes now that the world is opening up.
fordman: "Sorry, but that is just your opinion, not fact based. The fall in sp, now that is fact! The crickets sound you hear, that's the BoD doing nothing."
The fall of the SP is the act of short-sellers! BoD is always working behind the scenes, and let's see what they will announce!
Sorry, but that is just your opinion, not fact based. The fall in sp, now that is fact! The crickets sound you hear, that's the BoD doing nothing.
fordm: "No, it does no such thing. Just reinforces lack of City confidence."
How can you say that? BOD has always been working, such as acquisitions.
Possible announcements: Chairman, giving up golden share, taking private, ..., etc.
"This means BOD is working behind the scenes, and there will be major announcement, soon!"
No, it does no such thing. Just reinforces lack of City confidence.
"2. No director buying since statement…. tells you the board are inside and simply cannot buy. This point has to be unequivical. IF IF other big holders are also inside then that often takes away the most obvious natural buyers of a stock. The takeover panel limits such inside conversations to a half dozen but I suspect that is where we are. "
This means BOD is working behind the scenes, and there will be major announcement, soon!
I think all of the below is fair.
100% agree re value. And this cements as whey prices improve (btw they got worse last night - a big jump) and the profit profile improves. Also more and more automation driving the group to be more and more efficient
Ultimately part of the beauty of ingenuity is that it turns cost centres into profit centres and then a value driver in its own right
On the register I agree and this was my point yesterday. It’s not just “look at top 7” etc. you need to know who matts mates are as they are likely the cornerstone for any deal
(Matt 22%, sofina 9%, merian 2%?, management 3-5%?)
Then if SoftBank is the buyer they have their 8% or so. This was why sofina buying pre Christmas was upsetting as then you know nothing is in play (board seat as well)
Re the ingenuity contracts they modelled this at the Q3 results
Beauty spin off will cause a re-rate. Those assets are highly rated in the US. Even the online beauty retailer in India is worth a look (nykaa)
Would love some more ingenuity wins. Anyone find it odd that the Q4 update was the first one to not include names of wins?
A great post and a very interesting read. Thank you
A great post and a very interesting read. Thank you
To finish off as it got cut off ‘In the waiting room. Sit tight and accumulate stock carefully.’
Sorry a bit long !!
My second post on THG - I have decent city experience inc several recessions but not overly worried about that in this situation
My take on where we are is as follows
1. We are into extreme value here - I don’t usually talk sales multiples on valuation but it is relevant here as we are sub 1x price to sales versus every global peer / potential buyer of each part of business is 2.5x to 7x sales to value multiple. Given any global buyer will ultimately double sales at least as they push a niche product through their own global channels with higher ebitda too, this is relevant. Also relevant is most massive global buyers would give their right arm to buy my protein in particular
2. No director buying since statement…. tells you the board are inside and simply cannot buy. This point has to be unequivical. IF IF other big holders are also inside then that often takes away the most obvious natural buyers of a stock. The takeover panel limits such inside conversations to a half dozen but I suspect that is where we are.
3. Understand the register - near 50% of the company is 5 names inc MM. Key points - that is a nice start BUT not enough to go private (IF THAT IS WHAT THEY WANTED TO DO) without paying a sensible price for the balance. Most of the top 5 can hold private paper but many other holders cannot. They need 25% more at least to go private but 90% really. I think 350p would be a steal and that 400p more likely but would expect higher. Sad Premiums are based on 3 month average historic prices NOT on Friday nights close ! If I were Managment i would def give up on the public markets but it saddens me to say that. Therefore what is the right price ?. If this is the track they go down they will get on with it no doubt quickly
My huge preference is an ON market turn around where probably my protein or beauty is sold alongside a big contract for Ingenuity to run probably for 10 years thus achieving two things obviously - 1. Several billion of cash in BUT propelling ingenuity into a proper business with obvious very big value and that then gets its 10x sales rating over time. The shares would quickly track to 500p plus. A positive massive double whammy with no doubt not one but several ready buyers who would love to own either division.
The big question is whether the disposal and back to back contract happens on market or off. Remember the Sunday times rankings well pre ipo of the number 1 fastest growth company in the U.K., for several years running - nothing could touch this company and it remains one of the UK’s best global leaders with extremely clever management who will choose the right road for the long term of THG. What they won’t do I have no doubt is a slow turn around and try and persuade hedgies to believe in them. Hedgies will get massively burnt here. It will be soon I suspect as this is a fast pace company naturally and big I would have thought. Either way at 150p we are sitting in deep value and we are in the w