Member Info for BigBiteNow

The THG deal and fund raise completely change everything here, including how Huddled went about its business from the moment they knew they would be moving, which will not be the same moment that we found out.

I am confident that everything I stated up until the end of April was correct. I also still feel good about my FY25 revenue figure (£27m but it requires a smooth changeover to THG ahead of Q4). After that, I don't know. The sort of daily order figures being hit (not every day), along with flash sales, etc, lend themselves to orders growing MoM and AOV (at least at DD and Boop) rising. But something tells me my £6.2m figure won't be achieved. If not, then I will be looking at the reasons why and reviewing my own approach to see if it was indeed a little wild. But make no mistake, I spent a great deal of time analysing and testing my enthusiasm along the way.

However, the THG deal and funding have effectively reset the clock here. This investment is now about what happens post the move, with Q4 believed to be the first period where the effects will be seen. That means a bit of a wait, which some aren't prepared to do. The Q4 trading update was always my first checkpoint for my investment, and it has become even bigger now that this deal is in place.

There is little now preventing Huddled from boosting its inventory considerably, driven mainly by consignment ahead of its biggest period, Q4. The market isn't stupid and will position accordingly when it feels it can't wait any longer.

I also wonder just how time this changeover will require. By the end of Q3 is the guidance. August is naturally the quietest period due to holidays. So that is when I would be pushing the button, but I also don't see this being about a single moving day. I also think it makes sense to send all new major stock deliveries directly to THG. That implies running down the stock at the current warehouse. So in theory, whilst the full move may be August, actual stock levels could increase immediately by commencing the process of taking stock on consignment and simply running two two-warehouse approach for the next couple of months. It would be good to hear Martin talk about this more in one of his videos.

I note already a TrustPilot review for Boop for an order taken on 8th July, where the customer was annoyed because the customer service wanted to know which warehouse sent the items. If that is true, then knowing that Boop is only on one floor of the current warehouse, I question why they would ask this unless THG was already in operation. Be it I have no idea at what scale. I will refrain from saying anything more. I wouldn't want to be accused of being wildly over-optimistic.

That was my post, and some context is required here. The list I shared was the warrants list and didn't include any options which were in the next section. See page 47.

https://blencoweresourcesplc.com/wp-content/uploads/2024/11/Blencowe-Resources-November-2024-Prospectus.pdf

There are 10.7m option shares associated with the DFC funding success that can be converted at 0.5p once the 5th tranche of DFC monies is released. These must be held for 12 months or until completion of the DFS, whichever comes first.

As stated in the document, these are rewards for achieving $5m of non-dilutive DFC funding for the DFS. If this funding hadn't been secured, then they would have needed to issue c. 76m shares to cover this cost. So the 10.7m is a fraction of that sum. I wasn't invested at the time and so cannot comment on the 5p share price conversion used, but it doesn't look unreasonable given the SP fluctuations in early 2023 (DFC funding came in April 2023).

So, yes, 10.7m cheap options, but the DFC funding is fairly uncommon, and if one is being fair, the saving has to be taken into account when analysing the options.

2/2

Does this remove the glitches? Do I think management potentially should have held another £2m from the Immotion sale in the business to ensure Huddled was well-financed? Yes. But if they had, then I might not have got my first entry price last Sept, and the pending significant institutional investor might not have come on board. Remember, serious institutions don't like buying small caps on the open market, and this one happily took the shares at the bid price. Think about what that means for their qualities for a moment.

I also accept that investing in AIM isn't perfect, and all BODs have something going on normally for themselves. That's the game. But what I see is a heavily invested hard hard-working BOD that wants a great result, and so if nothing else, I am willing to hang onto their coattails because I think they are really on to something here.

We are all different, and what fits me often doesn't fit everyone else. That is the beauty of this game. When push comes to shove, the key question I ask is at a £10.5m EV, am I likely to lose or make money from these levels? The fact that I might not make quite as much as I thought naturally isn't perfect, but I will focus on winning first and then worry about the size of returns later. This is especially true when I am invested in a stock that still has a great deal of blue-sky potential. Why? Because of the consignment model and the fact that Huddled has found a niche idea to upend surplus stock disappearing to Africa, and instead channel it to them by offering a return and an ESG pathway. That is attractive, which is why I am sure THG won't be the last to engage with it.

1/2

I won't get into analysing the minor negatives posted here because most of it is historic nitpicking and has no significant influence on the bigger picture, which is where I am firmly focused.

But in terms of the "eat into the new money to the tune of £500k by year end" comment, this excerpt from the same Zeus note gives far better context.

"In FY25, net cash increases to £1.0m (prior: £0.0m) as we assume net proceeds of £1.4m, £0.3m of exceptional costs relating to the 3PL transition and £0.1m of additional working capital as management improve product availability and stock purchasing."

If you then look at the YE25 inventory, you will see that they have simply raised this from £1.9m to £2m. Why? Because this is all they can do at this stage until they can better understand what this move means. But there is no additional cash burn other than what is required to move to THG Ingenuity.

I have shared my thoughts on what I believe this deal means, but would take this further by encouraging investors to try and appreciate the consignment model better and what significantly more stock with limitless order volume can mean for Huddled moving forward. Investors are criticizing a business that was shackled by warehousing constraints and its quality (lift, old building, 3rd and 4th floors), plus the depth of stock. Yet failing to appreciate that this deal not only removes those issues but greatly enhances their ability to grow much quicker.

The last +20 months of trading (whilst also introducing and growing 2 new brands) haven't just been about building up revenues, but also about building relationships with suppliers. Do you think a brand-new discount retail business with no history of sales or proof of respect for brands walks into THG Ingenuity and secures surplus stock from a leading FTSE company? No. First of all, you need to construct your model and deliver a sensible business that can demonstrate it has a worthwhile and attractive proposition for these big players. THG is the first. Turn that deal into a trend, and stock levels (consignment-led, remember) won't be a problem anymore.

Better still, with THG Ingenuity offering a near-limitless volume of orders and doing everything, the amount of volume will simply come down to how quickly Huddled can get the items online and drive the marketing. But with +20 months of trading behind them, they have already built up a solid customer base and a large potential customer database. So they have every chance of getting off to a strong start. What this means is that daily orders can literally go anywhere once they are fully up and running, and it can happen almost immediately.

On the point about moving into profitability.

Huddled has clearly stated that the current funds (before this RNS update) were sufficient to enable the company to reach cash flow positive status. That is not outright profitability and never was.

Huddled has on various occasions talked about the tipping point, and having pressed management on this, it was made clear that this is the point at which all costs are covered except the head office overhead. In at least one June update, we were told that now the business had reached this tipping point. We were also told in the FY24 update that the business expects to reach cash flow positive in H2.

So they were exactly where they planned to be with the funds and warehouse abilities that they had.

Whilst I am here I would encourage investors to re-watch the 20th June video update on Huddled's consignment-based model. Ask yourself why he chose to talk about this model on 20th June, when 2-3 weeks later the Ingenuity deal was coming.

Could it be that this consignment model is designed for larger clients who want to keep control of the price of their brands, but have an outlet to sell them?

If such a model were applied to THG PLC, whose surplus stock likely gazumps Huddled's working capita,l then there would be no limit on the amount of THG stock they could transfer, especially when we consider that its transfer involves merely changing the owner of the SKU on the computer.

https://www.youtube.com/watch?v=Gg-B7uW7f6U

Morning bobbyaxelrod.

I think the pertinent question is, can Huddled talk openly about partner sign-ups?

If not, then a surplus stock deal with THG PLC can only be hinted towards. Would Huddled make this strategic move in the hope that they could win over clients in the THG auto store, or would they ensure they had at least one lead client on board to prove the concept? After all, we were told in the video that "this is not just about a warehouse move, this is a much bigger and strategic play." Businesses don't normally make such strategic plays without securing the very thing that makes it strategic in the first place.

The easiest client to secure would be THG itself because HUD is transferring its business to them, so the win/win argument for them is greater than for their other clients and comes with more leverage.

By securing one major client, Huddled can prove the benefits of a tie-up with them in this facility. But even to my untrained mind, the advantages for these clients are clear enough already.

If that is the case, then Huddled has just accessed a company that delivered c. £370m in Q1 revenues between its two main brands (both of which supply stock that Nutricircle and Boop already sell - See Zeus note today).

It takes a little leap of faith to believe this, something most of the market isn't prepared to do. I have studied and followed this company extremely closely, so for me it isn't a leap at all.

If investors could get their heads around this, then fears over potential (do we think HUD hasn't planned for this?) disruption in Q3 or Q2 results would fade into the background because they are a means to an end (Q3) and a historic set-up (Q2). To date, Huddled's progress (which has been very good) is not about demand or stock. It has been about warehouse performance/limitations and accessing the stock at a place in the food chain where margins can be maximised. Directly accessing producers/owners of the brands delivers this. This is why deals with Ingenuity clients are so advantageous.

It may well take a few months for this to sink in/show itself, and it may require some added insight (video updates) from the management team along the way. But ultimately, the numbers will do the talking and my sights, as they have been for some time, remain laser-focused on Q4.

Some investors may see nothing happening for the next few months and decide they are better off somewhere else. That is their prerogative. After all, who am I with my opinion anyway?

From my perspective, I see patience winning the day here because if the team can get the stock levels right (and they now have cash and I think clients to allow that), then Q4 with the warehouse shackles removed could be an absolute whopper.

In early June, they had already tested up to 2,400 orders per day in the old warehouse. Even a push to 3,000 orders in Q4 would likely see revenues hit £10m. But the reality is that there is no limit now. Think about that.

Morning all.

Here are my initial thoughts on this announcement.

Questions around moving now, when the existing warehouse has just got up and running, are valid, but we also need to be open-minded as to the limitations Huddled was forced to begin life with. This opportunity, backed by cash that has come at the current market price (not easy to achieve), opens up a whole new world of possibilities and removes shackles on their ability to grow. The existing warehouse would likely have hit a ceiling at some point, possibly next year. The growth so far indicates that. Plus, each growth spurt had to be tested first so as to avoid overloading the team. That risk is now removed.

Don't get me wrong, the management team needs to prove this was the right move by properly exploiting the now near-limitless order volumes on offer. That will come through the depth of stock and sufficient marketing. To date, marketing has been very effective, but has been throttled back in order to ensure the warehouse isn't overloaded. That concern is now gone. So then it comes down to how much stock and at what price. Reading the quotes in the RNS, there are strong indications that Huddled are looking to access stock from current users of the THG Ingenuity store. Holland and Barrett are definitely there because a case study on the site says as much. But THG PLC should also be on site. If they can access their stock in decent quantities, then that feels like a game-changer for the business. After all, we are currently talking about a c. £20m per annum discount brand now potentially doing deals with companies that ship 100s of millions of pounds worth of stock.

So it looks like this is not just about moving for more efficiency and capacity, but also stock from much bigger players. Huddled don't need much success with these suppliers/brands to become a much bigger entity in their own right vs. what we see today.

https://x.com/BigBiteNow/status/1941029893589917714

If the ECR BOD don't deliver positive updates leading into their share renumeration, then they are deliberately holding info back. But if they present a bitcoin treasury stock idea or talk up larger initial wash plants at Blue Mountain, then they are simply rampers.

Right now, attempting to sensibly debate on this BB is a complete waste of time.

What that also does is place a valuation on each successful well. 5 years x $3.6m (assumes 10% average tax over the period) = $18m + whatever the tail-off period achieves.

None too shabby.

Excellent work, DropD.

What shouldn't be forgotten is that the broker sees each well achieving an extended lifespan of 5 years of plateau production due to the quality of the flow rate data. That means far less ongoing CAPEX, which means far more of these cash flows can be put towards company expansion and/or dividends.

Also, the broker is basing their forecast on 4 wells completed and producing in 2025, when we do have a good chance that it will be 5.

Apologies that should have read...

"Taking that valuation point a little further, the existing 2P and 2C resources (522 mmcf) are currently valued (risked) at 31.3p, whilst unrisked, they sit at 41p."

Taking that valuation point a little further, the existing 2P and 2C resources (522 mmcf) are currently valued (unrisked) at 31.3p, whilst unrisked, they sit at 41p.

If Hex could even just double the resource to 1bcf, then even on a risked basis, we can add in a further 31.3p, taking Rudyard to over 62p a share.

However, the more the field is de-risked through successful wells, the more investors may be minded to factor in the unrisked valuation, which would have risen to c. 82p a share. This is purely Rudyard. So nothing included for Ingomar, or the hydrogen or the oil. Nor the cash that would begin building once first production is reached.

From the LInda #1 well flow test results dated 22nd May.

"At conservative sustained production rate of 2,000 Mcf/day raw gas, 1.2% helium grade, and a helium sales price of $500/Mcf, production from the Linda #1 would generate pre-tax cashflow of circa $4,000,000 per year, in line with base-case modelling, demonstrating the scalability of production at Rudyard and robustness of our economic forecast."

This means all costs, except tax.

The broker has issued an update today and stated that "We have also adjusted our tax rate from 21% to 10% based on the company’s guidance."

They go on to state that the adjusted tax rate is "based on several tax rebates available that will reduce the tax burden by around half."

That indicates that each well would deliver post-tax cash flow of $3.6m per annum based on the above parameters, which I think are a little light given how the wells have performed so far. At the initial 5 wells, we are talking about $18m post tax.

Despite the additional dilution, they have slightly increased their current risked NAV to 49p a share, but this is merely a point in time, and upward adjustments should come. e.g updated reserves. Weil #1 alone sits outside the previous report.

Looking good.

I was referring to the video that I included in my post.

Yes, Bottomzup note also in that second video that he talks about the landowner's input. i.e

"The land owner and also he's got his own team of people with his own equipment as so we're over that hurdle. The land owners really like what we're doing here, he's very interested in what we find here."

This is why chatter about equipment and landowner issues etc is just nonsense being spoken by people who aren't prepared to investigate enough.

The wash plant is the same one that came with Blue Mountain (see original video below) when they acquired it, but upgraded to allow/test better gold recoveries in line with what has been learnt from Gekko. So it is not new, and this process of upgrading and the reasons why have been set out in RNSs.

In that video, it is clear to see the heavy equipment and water supply in play.

This plant is a pathfinder to establish where the best ore is situated so that the feasibility for a larger plant and its size can be established. At the same time, it will test the methodology for extracting and enable gravity separation to be tested at a small scale. In doing so, an updated and bankable resource can, when it is appropriate, be established.

There is no need for any landowner agreement to be published, but it has to be in place, or a further mining lease won't be issued. That is Queensland law and can easily be checked on the Department of Natural Resources and Mines, Manufacturing and Regional and Rural Development website. What can also be found there is information around small-scale mining and the authority's approach to supporting mine development. Mines can increase scale whilst applying for the relevant authorisation, so long as this is agreed with the relevant authorities. This is to ensure that mining isn't interrupted.

Plus, if there was no agreement in place with the landowner, then they wouldn't be heading back to the site.

This is the initial phase, and so it is small in scale. But they can still process 1,000 tons of ore, which I believe this wash plant can handle. All gold extracted can be sold and the money reinvested in the project. Alluvial gold mining is a very simple extraction process, but it still needs to be planned properly, which takes time and requires this process to be concluded.

There is no guarantee that they will find enough resources, but they have the very best chance of getting into production because it is so low-cost and simple to execute vs other forms of gold extraction. But still, they need to follow the correct path, and that takes time.

https://www.youtube.com/watch?v=IKpjUKCx25A

It is worth keeping an eye on these Discount Dragon free gift deals. The current one is free gin if you spend over £75.

Since 1pm yesterday, 127 have been taken.

If, for example, DD is achieving 1,200 orders per day (which itself would have the brand running well ahead of normal revenue levels) and the historic AOV is c. £35-£36, then these 127 orders alone can increase the daily AOV by over £4 per order and the 24 hour day still has 4-5 hours to run.

Yes, they have to give a product away which costs them something to acquire, but all processing costs remain stable, and marketing costs are removed on the increased basket value. The deals vary each day, but they are now very regular, and are just one detail of many, but not to be underestimated in terms of impact on revenues and margin.

I think it wants to have a crack at the main resistance line at c. 26p.

The 2x 50k and 100k at 20p are mine. Could have moved on them earlier, but wanted to mull the update over a bit.

I wouldn't be underestimating Lolworth either, which has been completely forgotten.

"We plan to run a fairly extensive shallow drilling campaign during Q2–Q3. This may include 50–100 holes using a 4×4-mounted rig we’ve secured. Focus will be around Gorge Creek and GC West, where results have been particularly encouraging."

It should be kicking off soon after Blue Mountain commences.

I called it trial mining because that is what we were told back in April.

"Planned Trial Mining under advanced exploration activities."

But yes, bulk sampling is also set to commence, including some new areas of interest.