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Goldy had some interesting points that were relevant from an operational point of view - it’s good for us not to be in an echo chamber - and the poster kept it clean
The subjects not touched on was cash to grow 3 Growth business, plus MM’s preference?
Personal opinion we are heading for a Buy Out, makes sense on every level, both of the above get settled.
Insiders can retain their equity and at management level can enjoy a
‘ carry ‘ on the growth as a private company, MM moves from
15% to a higher stake without using his own cash ,the Golden Share worry for him has then gone, why has he held on to the GS ?
High chance of a private bid
Literally all I said was take the vague statements with a. Pinch of salt
It was you lot who flew off the handle
Read the thread
Goldy
So a whole weekend wasted for him, with some extremely long and laborious posts, to come to this very easy conclusion staring everyone in their faces.
Most of us could have said the same in just a few words LMAO.
(No matter which way anyone tries to slide and dice THG, ITS MASSIVELY UNDERVALUED, SIMPLES)
Goldenyears - tip from yesterday. It’s not what you say, it’s how you say it.
This will help you
BREAKING NEWS Goldy LLP upgraded THG to BUY but declined to reveal the TP
Got there in the end hehe
Nice open market buys taking shares out of the atrocious algo carousel one for 100k
I am saying THG is a buy! I never said it wasn’t! All I ever said is don’t get excited by vague statements! When in reality we haven’t a clue what we do for any of those FMCGs
It was a really simple balanced point and for some reason caused all this. I think as it scares people not to see 100% optimistic comments
A good case in point is no one has countered with what we actually do for any of these FMCGs so how can you be excited
On your point re security that’s not really relevant as THG owns the sites (they are MyProtein and lookfantastic sites also). Also cages and stuff is old world. We are using Autostore! It’s all in bins (or will be when fully rolled out)
I have never been negative I was just being balanced on vague statements
Why you all got so upset is beyond me
Goldy
Totally agree HH definitely a change in momentum & feels like we could get a surge at any moment even on no news let alone an expected RNS..
Yeah thanks Goldy - BUY more THG
OK Goldy you understand general fulfilment, you really like Ingenuity, you state Ingenuity's revenue is worth more than its recurring beauty and nutrition revenue and you can see a reason why WPP would like to offer an Ingenuity service to clients. Your post really sells THG so hopefully it clarifies your position here.
On top of your fulfilment description the company will bespoke security, (CCTV, access control, cages, personnel) H&S (******ants, aerosol protection, bespoke personnel training modules) and packaging (bespoke designing, holding pre-supplied packaging stock, personalised welcome notes etc....) I'm sure there is so much more FMCG's bespoke offerings THG makes that others can add as my background is mobile telecommunications hardware.
I think you make very good points why WPP may have launched a dirty PR campaign with their city and Fleet ST friends against THG with the view of possibly making a bid for Ingenuity
Thanks for the reassuringly optimistic positive strong buy opinion on THG
No I never said they are hiding behind NDAs at all. Someone else did. And they were saying that waswhy we know nothing. My point was actually we’ve seen the opposite from THG. Every single RNS up until Dec had a large paragraph with new client wins and detail of what we are doing for them
Also with NDAs you can discuss anything in the public realm ie once a site is live
Your points seem to lean on a view that you think I’m negative on ingenuity. I’m not, my initial point in all of this was saying to people calm down with statements like “5 top FMCGs signed up” as we don’t know what that actually means
I then gave the example of Unilever which is a client but all we do for them (or did we don’t know if this has changed) is hosting. It was a client of hanger7
Another example is GSK. THG said we are doing a site for them. It’s never appeared. GSK in their annual reports talk of their D2C strategy particularly in the US but none of these are ingenuity sites so why?
So my point was, very simply, just calm down when saying these statements as we don’t really know what they mean.
Everyone got all offended and upset and seems to think that means I’m a deramper when all I’m saying is something very logical and balanced
Fulfilment. In terms of THG (I’ll answer anyway even though it’s nothing to do with anything I said). Is the holding of client stock in a THG warehouse. THG, uniquely in the market may add personalisation (coke being an example). THG then pass this item through a 3PL to the customer
What makes ingenuity special is the global footprint but also that they can combine ownership of this global footprint with the ownership of tech. Ie as that stock item moves the stock system is updated, PIM corrected and a website reacting to the stock level. Upstream the data shared back with the client via the CRM but also to aid in better sales or product discover
No other player does all of this and gives you the insight. Inbound to the THG site from the client site will likely be clients cost
Why does WPP want to copy? As revenues from this service are highly rated. £100m revenue in this business is a higher value than £100m selling screws. Mainly as it’s considered to be annuity like. As the above described THG would be a clients entire end2end infrastructure in a geography so once install and with a growing client base it would be difficult and costly to replace. Therefore once on ingenuity, particularly in an international territory, a client will likely never leave (although Jack wills an example of a client that did - in the US)
WPPS revenues although repeat as the clients like them are lumpy based on ad cycles. They also have to keep the client happy. This lower certainty of revenues drags forward earnings valuations
Again for the 100th time I’m not negative on ingenuity I’m just saying a bit of balance about vague statement and stating some facts
Goldy
Goldy (I'm sure I've seen goldy7 before anyway)
I believe you have stated that thg are being vague due to hiding behind unwarranted nda's
If that is the only concern that you're implying then please read my earlier post again because if you don't understand bespoke fulfillment then just admit it or research it properly
Please just state to the BB what you believe bespoke fulfillment is and I and others will gladly dissect your post with actual experience thus allowing a true understanding of ingenuitys capabilities
Lasty can you please explain why Mark Read CEO of WPP (a huge transparent conglomerate that you seem to like) stated recently that WPP want to launch something like ingenuity
Look forward to your precise reply 2phevs
Wel mrsimmons I suggest you take your grief up the insitute of chartered accountants and every business in the UK who are legally bound by IFRS16
The whole point of IFRS16 is to prevent off balance sheet financing. All long term leases should be treated as capital loans on the balance sheet to show the true liabilities and treat it as a capital loan with an interest charge.
Thats the whole point aof IFRS16 and it is the correct legal accounting treatment. Your objection applies to every business in the UK which are all bound by IFRS16.
The rent does through the funds atatement
I agree with heres. Use ingenuity to support nutrition and go for market share
This is the beauty of ingenuity during tough times. THG can still go and grow profitably
Then whey prices unwind and it’s a huge headwind
Goldy
Simmons but you don't complain about the IFRS 16 making the interest expense higher than it would have shown as being before meaning in terms of making an overall profit or loss it's a neutral change.
Also obviously the rule effects all companies so EBITDA is just as comparable to other companies EBITDA as it ever was.
Simmons- we can all see you posting furiously on both ADVFN and lse
Why bother? No one really listens to you on either site?
HH I’m not a fan of exceptionals and I’m certainly not a fan of excluding your rent from your quoted ebitda % which to me is plain and simply wrong and borderline misleading. No one can argue with that. How can you quote an ebitda margin but exclude your rent costs because of ifrs16. It’s wrong and shouldn’t be allowed.
Mrs Immons is losing its rag over on advfn now as well
Why do it to yourself Immons - surely your can make more in McDonald’s or Argos etc
We find you really embarrassing in your blatant agenda
The 60% wasn't pulled out of thin air.
"RBC said: "We sympathise with the challenge in valuing Ingenuity. Indeed, it is what previously kept us on the sidelines.
"However, its momentum in the 2021 full year – we believe its site order book more than doubled - and improved disclosure have been overlooked.
"We project that Ingenuity Commerce could increase tenfold to £0.5bn of revenue in five years, with at an EBITDA margin of around 60%, drives our discounted cashflow valuation for the segment of £4.4bn. Yet the market is attributing no value at all."
https://www.sharecast.com/news/broker-recommendations/rbc-capital-ups-rating-on-thg-to-outperform--9088704.html
I’ve read all the analysts reports. Most have ingenuity in at 35% ebitda margin going fwd. this 60% is a nonsense and makes no logical sense when you look at the maths for the group
But Jesus hang me because I’ve raised a question on the ingenuity margin. HOW DARE I! TROLL! PAID DE RAMPER!!! Let’s post a link to his advfn profile instead of replying with why we think it’s 60%. Hey ste2000?
Hosai. There is no point growing if the margin isn’t improving or even worse declining. Them saying they won’t pass on price for me is the wrong strategy. we are expecting to put 4/5% on wages alone this year. You can’t absorb that into margin. You have to pass it on. It’s a race to the bottom otherwise.
Yes you win market share but your margin goes down the toilet. Do we really think margin will go up 500bps in a year. That would be one hell of a turnaround. I guess those that are in think that is possible. I’m more sceptical. Doesn’t make me a troll. But thanks for the answer. You have done some research before investing.
Ste2000 aka Kim Jung un I see won’t answer. No posts are allowed which question the messiah Matt moulding as far Ste2000 is concerned.
Hosai. A great point. We actually don’t really know what margin ingenuity is at atm! This is a fair point
Now prepare to be lynched for not claiming with undying favour that it’s amazing!
I mean this in a jest but this is an example of a very big unknown also re ingenuity. What money is it even making? Which revenues drive the higher margin? How will a ramp up in marketing spend impact this? How many client have accepted the take rate on fulfilment? What impact does that have on margin?
Just basic questions
It’s not deramping. They are fair questions to ask
Simmons, there has been huge price increases this year for example in Whey protein, hence the big margin deterioration, in the medium term they predict to be back to 9-10%. They are not passing on the costs hence are predicting to grow 22-25% (prob around 19% organic) this year as opposed to other online retailers such as boohoo/asos who are predicting similar margins but to grow "in the low single digits".
I'm not sure Ingenuity is at 60% margin yet I believe that was where it was claimed it could get to in future years.
Ste you are the troll. I’ve asked you a question about your information and you are refusing to answer because you don’t like the answer.
I will ask again for the 3rd and final time (I don’t expect an answer) but here goes.
YOU said ingenuity will do 120 m at 60% ebitda.
Matt Moulding (ceo) has said the group ebitda will be below 6% this year.
By my workings that means the existing business ebitda margin will be 3%.
Is this right Ste yes or no?
In fact ste. You’ve just said yourself ingenuity will be 120m at 60%. Yet Matt has said group ebitda margin will be below 6% this year. So on that basis the rest of the group will be below 3% margin. FACT Ste. That’s not trolling. That’s a fact using your own information. You should read a post and not just call it trolling because of the posters name. This is a board for discussion not a monopoy for good news only. That last time I checked Ste this is the UK not North Korea. If you want only good posts please move there.