Member Info for bobbyaxelrod

I think Boop is inherently different to Discount Dragon and Nutricircle, hence why I think it has more potential. The most important difference it is selling beauty goods as opposed to food & drink. Much of the stock on Boop is "excess inventory" rather than much of the DD and NC offering being related to best before dates. Furthermore, Boop is positioned more as an "outnet" and I think this has legs in it. Perfumes and aftershaves that are discounted not only appeal to existing customers but probably help draw in new customers (with the subsequent purchase representing a better immediate return on customer acquisition cost). Some of the popular Boop items, like Charlotte Tilbury stuff, have been selling despite higher asking prices as customers are sensitive to the discount rather than the actual price. I think beauty is a different ball game with Boop having a much larger TAM. That said, brand penetration remains incredibly low, for example Instagram followers for DD (c25k) and NC (c35k) have remained static, whereas Boop seems to climb by c0.1k every few days (currently 15.3k).

Don't want to seem bullish here - I think the jury is still out. But fragrances are good move, just considering how (1) customers rebuy fragrances they like when they run out, (2) they are often gifted, (3) fragrance sales sustain many businesses, e.g. on the high street, (4) raised AOV, (5) attract new customers who want to secure a good deal (i.e., the offer is the advertisement), (6) less stock risk as many of these are proven to be good sellers historically.

What do you think about this?

https://www.modernghana.com/news/1417133/minerals-commission-ceo-two-others-cited-in-alleg.html

Lots of other news articles online.

Now that I re-read your message, I'm wondering if I have been slow to recognise sarcasm?

We’ll have to see. I struggle to have any solid expectations due to all the business changes (warehousing, consignment buying, equity raise, etc).

One thing I will say is that we know Q2 has shown growth across all 3 brands, with Boop c30%. If Boop growth is maintained we could be looking at £4-5m minimum in full year sales (700k + 1m + 1.3m + 1.7m = £4.7m). That assumes no acceleration in growth due to expanded offering, bigger push and a bumper Christmas Q4.

We also know Boop margins are supposedly better. If AOV across the group has improved, but especially for Boop, this is promising (now all free delivery above £40, previously was £30 for Boop). Boop also selling quite expensive items.

So, the point I’m making is that valuing Huddled solely on Boop. Say £5m annual sales on 10% op margin gives £500k, growing 30% QoQ (from a small base) with chance of acceleration (but also slowdown). Based on Huddled’s market cap, it’s roughly 20x P/E for Boop alone (if there is earnings - unproven at this stage).

I’ve noticed that Boop’s stock breadth (unsure about depth) continues to increase each day. Nutricircle and Discount Dragon have also increased compared to a few weeks ago, but Boop has continued.

Another thing is that it is now £40 order value for free delivery across all 3 sites - a promising sign for AOVs.

Agree with where you're coming from.

There is a definite apples and oranges comparison with PSA and Tutivia.

PSA is predominantly a screening measure used in primary care to identify patients who would benefit from further assessment and investigation for possible prostate cancer. It is cheap. The main problem with PSA relates to timing, in that it must be performed prior to a digital rectal exam of the prostate as this procedure can lead to elevation of PSA. PSA is also used to guide management of prostate cancer and for ongoing surveillance.

Tutivia is more expensive and will not have as wide of a market. It will be used primarily to guide clinical decision-making post-transplant. The risk of a false negatives is understandably huge (transplant failure) and so the test could never be solely relied upon as a go-to test (I'm not saying that you said it would be). It will take time to understand how it can be used in relation to other investigations (incl. non-specific blood tests), clinical symptoms and previous transplant history, and also it will take time to understand how it can be used to guide immunosuppressant management. From the conference abstracts, my gut feeling is that the jury is still out. I can't see the tool not being used but may take longer than expected for its use to be optimised.

A better comparison, but still not quite, might be D-Dimer use for PE/DVT.

Completely agree.

Yes, I was just following a random thought down the “need for real world actuarial evidence” route and trying to see how this could end up being negative for Ondo. I think it’s very likely the real world evidence will be positive, and I’m happy to leave it there. I

Would also comment that, after reading the 5 abstracts, it's far from clear that Tutivia is a winning product. A consistent theme is the test's high speficity and high negative predictive value (and low sensitivity and positive predictive value) - this could be promising, i.e. Tutivia can rule out rejection, although the risk associated with false negatives is significant. Therefore, if adopted, it will help stratify if a patient gets further investigation for rejection or not, as part of a broader decision taking into account other measures and the clinical picture. One positive is that at least two of the studies mention that Tutivia is already part of their hospital protocol.

Yes 5 separate presentations. I'm unable to see if they are all poster presentations or some are oral. Either way, this is great as part of real world evidence generation. These presentations will likely be bundled into a post-conference publication and therefore will count as published research. Published papers - outside of conferences - would carry even more weight. I'm hopeful the CEO will talk more specifically about their real world evidence generation aims which will supercharge the rollout and lead to greater adoption. All the sales that are currently and going to take place should form part of an ongoign real world evidence study.

I agree with everything everyone is saying - I’m still a holder. We need to wait for the internal actuarial studies to prove this (similar to how in biotechnology you need real world evidence studies to prove cost-effectiveness).

It will be true that fixing a leak one year (or fixing issues that lead to leaks) will reduce the future occurrence of a leak, therefore requiring less need for LeakBot recurring revenue (statistically speaking).

Not sure what the long term LeakBot recurring revenue per month will be. But could add considerable cost to a home insurance policy, and this cost may not be readily absorbed by consumers or the insurer (if significant and the maths does not show it is cost-effective over long time periods).

It may be someone had a LeakBot with one insurer, switches to another insurer and that insurer decides there is no need for LeakBot (unless consumer pays through higher policy amount) because statistically speaking a leak is less likely to occur within the next 5-10 years.

Of course, maybe houses with leaks or potential leak issues are more prone to leaks and therefore require constant vigilance. Who knows. Each insurer may make different assessment

I’m thinking Verici new sales team will take a quarter to get fully up and running (could be faster but in adjusting for lack of faith in the management). If existing orders remain sticky and recurring then 2026 will show a massive ramp up in orders and commencement of a real world study (to promote future inclusion as a standard of care).

Main risks at present are delays to sales team expansion set up, reduced recurring orders, and lack of traction in gaining new orders. Maybe possible upside from delayed reimbursement of tests? Haven’t looked closely enough to know if this actually a possibility.

I guess there’s also the event take private or buy from administration on the cheap scenario, which is a big risk.

Yes, those margins are on a gross basis, but remember there are other costs (that will also increase) that also need to be covered. This only happens with scale and the scale is dependent on insurers finding it worthwhile long term offering that is cost-effective and adopting it widely. They may find that having a Leakbot for a couple of years and then not having one for the next decade is actuallay works out cost-effective... because leaks are repaired and prevented by LeakBot in the first 2 years but then (on a larger population and time basis) there is no benefit to continuing after that point.

I invested here originally in 2022 at 6.49p (can't believe it's been that long). I sold some yesterday at 28.86p to take back my initial invested amount and some small profits.

A key thing I've been thinking about after watching the recent interview is that Ondo is completely dependent on continued actuarial evalution with regard to its cost benefit. We are seeing increased orders and adoption, which is promising, but not enough time has elapsed for the real evaluation to take place. This could take some time, but if the results are positive then expect to see uptake accelerate. Of course, these evaluations may vary between insurers and countries (in the US home leaks are much more significant).

The other question is whether LeakBot proves to be worth it for insurers over longer time periods. This is unproven as of yet. For example, an insurer could roll out LeakBot under a short 2-3 year contract, identify and fix leaks and potential leak risks, and then decide that is not cost-effective to continue with LeakBot after the contract period (based on mathematically modelling around incidence of leaks, i.e. LeakBot is fixing and preventing the thing that justifies its cost).

I'm still excited for the story and remain invested, but I think the valuation is questionable and the business model is only solid once the result of actuarial studies show LeakBot is cost-effective and necessary for long periods of time.

I’m largely in agreement. I think there’s a chance the share price dips below the offer price before heading up in the manner you describe.

The enterprise value is £1m. How this is not being acquired by anyone? I don’t know but could this suggest the product isn’t that good… I don’t think so but raises the question why no one is interested.

So: 243m shares pre-raise, followed by 1126m and 7m shares. Ongoing retail offer for another 100m.

Roughly 1.476bn shares if retail offer taken up in full. At 0.5p this is a market cap of c£7.4m... Much less compelling. I can definitely see this coming under pressure post-raise.

What is this company’s actual current market cap following recent raise?

I’m getting c£1m. If the retail offer for £500k sees full uptake then is an incredible amount of new shares.

Either way, I think this company is now in a great position (regardless of retail raise). My reading on the year’s events is that the share price collapse has been doctored to allow key shareholders and institutions a chance to get their money back. This is due to the timing of releases and the length of time the raise was telegraphed for and not actioned (perhaps this allowed proper consideration of the position of the company).

Do we know if they are doing an ongoing R&D to continue providing their product? Like a real world study based on current utilisation?

Paying £1m for something that cost 30-40x that to develop and has all its duck lined up ready to go, including being capitalised, seems like very asymmetric risk-reward.

There's definitely been an expansion is stock breadth over the past week across all 3 brands. Can't speak for depth, but would assume this has at least remained similar (increased depth in some SKUs offsetting superficial "testing" depth in others), but likely has also increased.

I read this is a promising: (1) more stock = more sales, (2) likely also increased consignment stock, (3) increased range = more attraction for new/returning customers, (4) more stock = more orders (warehouse functioning well and already/prepared to execute more orders, (5) more stock = increasing buyer power so maybe better margins, (6) more stock = more to buy = higher AOVs and consistent "operational profitability" and path to cash flow positivity.

The downside would be mainly increased risk of dead stock and subsequent extreme discounting or write downs. Maybe this is offset by consignment arrangement and good buying. Who knows?

Stalin123, agreed on all your points. Retail is just a tough sector to succeed in over long periods of time. There's competition, ever cheaper manufacturing, squeezed margins, dead stock issues, losing brand appeal, changes in customer tastes, etc. Buying stock is a key skill for success, and we will have to see how Huddled do now that they can focus even more on this and also have started a consignment based strategy.

I think the consigment strategy, if well managed, could be really transformational. But then part of me wonders if it becomes, "we take all your stock" rather than "we take your stock that we think we can sell and make a good profit on", and also whether it becomes "it cost us nothing so we can sell for nothing and make litlte margin" instead of "we need to buy at a price that protects margins". Either way, think management will navigate this opportunity.

On trust - agreed. It all comes down to H2 execution.

HarChris, I think the same. I think Martin said mid-september, which I think may mean everything (incl. teething issues) will be done by August. I think Huddled is a good buy (weighted within a portfolio to your risk tolerance). There is poor liquidity on this stock - something to bear in mind. Although it was the same for THX! The institutional involvement is a positive on face value (for the company and possibly shareholders, but we will have to see). We don't know what's gone on behind the scenes to make this happen.

Re. broker notes, I haven't read any of them. In my experience, unless they're easily available, they are never that helpful and can sometimes even completely mislead. That said, if I had access to Huddled's, I would definitely read them.

Agreed Stalin123. Worth considering that slow-moving stock led to small write down previously. There is ongoing dead stock risk. I think the "fast" inventory cycle of this business should offer some mitigation, BUT then the effect of dead stock is also much more significant as it takes up capacity (perhaps THG Ingeuinity will help but this could actually accelerate the accumulation of bad inventory, who knows?).

Also interesting point that they will be taking on stock they don't want in order to get the stock they do. Will this problem compound if they no longer can use warehouse constraints as a reason to be selective? Equally, will the problem compound if partners use consignment to throw lots Huddled's way. It's really unclear, and that's why the strategic shifts (consignment, equity raise, THG Igenuity partnership) now make the future less clear than before.

Interested to know what you think of the new consignment strategy they are commencing/is already ongoing?

HarChris, what makes you so sure on CEO and Chair? All I know is that they are magnitudes more qualified than me to do it. We have to remember that, even if management are good, there are more fundamental things that to be proved such as the soundness of the business model, as well as longer term returning customer numbers and AOVs. These things may be out of control of the management, no matter how good.

Although we have to be careful to remember CEOs are expert salespeople and also that there are/have been potential governance issues, I have really appreciated Martin's business update videos. I think he's made a good call today with ending the videos, possibly because of our ongoing analysis on here. It's a shame they can't continue or perhaps they will be more planned - with less market sensitive information - in future. It would have been nice to get a final blast update giving more detail on trading, the partnership, the move, how the money raised will specifically be spent (i.e. why was it needed), but he's already providing more comms than most other companies.

Cheers Stalin123. I think the headline figure for Q2 will come down to Discount Dragon. I was giving a conservative downside on revenue for Q2.

We know, due to the update, that Boop could be c£1m (31% increased in orders). We also know that all 3 brands showed growth in revenues and orders which means Nutricircle must have higher revenues than £1.2m. DD had a bad Q1 (we all know reasons, warehouse space, quiet January, etc), but Q2 has removed many of these constraints, so hopefully we see significant growth. I think closer to or above £6m is still a fair possibility. Either way, we do know that Q2 wasn't profitable (as expected). So it's all on H2 and this strategic shift... let's see if management can execute.

I agree on the need for constant tempering with realism and the actual facts we have on the ground.

For me personally, I welcome any disgreement. My only goal on here is to improve my understanding on the investment case. Working through disagreements is what improves this understanding.

BBN, we can't read too much into the institutional buy. The dilution, lack of detail and ongoing cash burn give enough reasons to be concerned about the business situation. With management promising no equity raises, it is also understandable that their credibility has taken hit (whatever the reasons for doing so - unfortunately the announcement was light on specific detail so we will have to see what H2 brings).

BBN, your contributions are really valuable and allow us all to really drill down on our understanding of the business. Please continue to engage in the discussion. Stalin123 and HT2 are also valuable commenters, with important insights from pre-Huddled days. The bear points and concerning aspects are important because they allow one to get comfortable or realise they are uncomfortable with the investment. Huddled is still a very small business with a great risk-reward skew - if we all stay engaged we will be able to better estimate the downside potential but also estimate how many possible multiples we this could grow to of current market cap. I've been accused of being an AI on here, but I just try to stick to the investment case and absorb as much value from others as possible (sorry if coming across patronising here).

Stalin123, for Q2 minimum expectations - we know Boop will be c£1m, and we could assume DD c£3m at least, NC £1.2 (no growth on Q1). This gives minimum £5.2m which is still c20% growth QoQ. DD could be much higher than £3m (say £4m) and NC could show some growth, sp BBN's Q2 estimates are still in play. What are you expecting for Q2 and FY 25?

HT2, that is definitely a possibility re clearing stock. Although, if they are already trading from THG Ingeuinuity (as suggested by the Trust Pilot review) either with warehousing or via consignment then this makes this risk more manageable. They can't do much about the macro picture (weather, holidays, etc), but if they perform well adjusting for macro, i.e. still some growth (or no sales decline) while rest of the retailers are down then this could be bullish.

HarChris, I recognise you from THX. Hoping Huddled works out as well as THX did for me!