Member Info for bobbyaxelrod

Adamsmithfreethi, what makes you so certain that THX has no prospect of extension? I'm interested to know. Segilola looks certain for an extension of minimum 3 years, with the main question being how many more years than 3 and at what point does an underground to transition occur.

Re the political risk. Nigeria will always have that problem. But THX seem to have dealt with it well so far - they have Federal government backing (against the problematic State government), they have regulatory backing, they are a top 10 non-O&G Nigerian exporter, they have brought the state on board as a significant shareholer, etc. Always the risk of another issue in future, but seems like they are on top of that and set up well.

Agreed, on there being no guarantee of profits but lets see what management can do in H2. I think the risk-reward is good here, and near-term upside could be small to multiples.

On the RNS today about Premier Milton's holding - so obviously they are the institutional investor. I saw Premier Milton's update today about recent trading. They have faced continuing outflows (still £10.5m in AuM). But their investment performance stacks up well.

https://www.hl.co.uk/shares/stock-market-news/aim-and-small-cap-news/aim-bulletin/premier-miton-confident-as-net-outflows-slow

The only similar company I know is Avepoint, which I still hold some shares in (sold over half when the price more than doubled). This company operates as a SAAS with growing revenues and improving margins. It has regularly been Microsoft's named "top partner" or some sort of award. It helps organisations get to grips with Microsoft's offerings (and other vendors) like corporate Azure. They suffered from SPAC stigma, but have since continued to rebound. I picture them like one of those small fish that clean the teeth of blue whales in the ocean.

Re Bytes, I think this company is well positioned; however, the market is probably more awake to the fact that this may be more of a subcontractor model with little SAAS characteristics, hence the exposure to contract risks, including delays. There are also some historical governance concerns, with a recent director sell prior to the profit warning. What investors like to see is director buys after the profit warning. An important accounting shift happened in the business 3/4 years ago, and longer term shareholders may be better placed to give an opinion on this.

The key thing is we have a government that wants to spend on public services and defence, and much of this spend will be around IT infrastructure and AI, so Bytes revenues should continue to grow. Once corporate entities digest the government's SDR, they may also have work for Bytes. However, there remains the chance that, in the meantime, there will be further negative announcements related to "continued delays in H2" or "uncertainty".

HT2, I think Huddled guided for a profitable (cash flow positive at least) H2, so this is still possible but safer to assume its delayed til 2026. Individual brands have flirted and even had sporadic months of Martin's "operational profitability". It's been clear that higher sales volume is a key determinant of future profits, so this strategic move helps clear and also derisks the path to profitability.

We know they aren't cash flow positive, so cash burn was always guided for H1 2025. The timing of this strategic announcement, the warehouse move, the ability to raise quickly from an institution at close the market price, etc makes sense, but there is always the undercurrent of bad sentiment that comes from a dilutive equity raise in a loss making business. Raising now means they have adequate cash to make a success of this shift in the business and act quickly for any opportunities that arise.

Of course the other option was debt and I think they could have secured debt, although in this situation debt brings interest payments, banking convenants and is not as quick to access. The questions are how badly was the equity raise needed and how will it be spent?

The problem we exist day to day, but Huddled can only really make progress Quarter to Quarter with the disclosure of business performance. I think Q2 will show overall growth (but slower than anticipated) with Boop showing significant growth. Perhaps June was a disappointing. Now we are in Q3 we can assume the warehouse move is underway and already being tested with some stock on consignment. Q3 could also be quiet based on holidays and weather, but who knows. Either way, this still sets up for an absolute bumper Q4, but all comes down to management execution.

Re the board changes, I read some of this as positive, with a "non-exec Chair + exec CEO" combo being replaced by an "exec Chair + exec CEO". This likely has increased head office costs, but suggests a more hands on combination that can help steer this fast growing business. Remember, Huddled is on target for minimum £20m in revenue this year, but I think £25m to possibly even £30m is plausible. This has low interest and low liquidity, and continued growth should attract interest in owing the shares (fingers crossed).

BBN, thanks for the insightful analysis as always. The move really could be transformational and accelerate the path to larger volumes and profitability. I think June may have been a difficult month for Huddled, especially Nutricircle.

Looking at website traffic, Discount Drop had around 15-20% fewer website vists in June compared to May, although DD still moved up in its listing ranking (suggesting website traffic was generally down). Boop bearly doubled its website traffic in June compared to May, but visitors viewed less pages and spent less time. Nutricircle website traffic was considerable down (I think around 40%) and suggested it performed poorly even taking account of the wider market. Website traffic figures won't include information on app use, so customers using apps is likely also increasing but we have no idea about how fast is growing or how good the conversion to app is.

Furthermore, there has been a really limited offering on Nutricircle, management changes, major shareholder disgreemnt at the AGM, etc. And despite being told the strategy was to expand its offering, this still hasn't happened. The worrying thing is that June is in a quarter that this is following significant advertising. I think most of the effort was concentrated in May 25, so this was likely a bumper website traffic month with lots of window shoppers.

What I'm getting to is that I see Boop Beauty as very useful to THG because THG has many beauty brands that can release stock to one place in Boop Beauty. However, with THG (i.e., MyProtein) and Nutricircle it is actually less clear... The dream scenario is that it gives a ton of stock to Nutricircle on consignment and allows Nutricircle to expand its offering drastically and build up depth for their returning customers. But in another sense Nutricircle could also be seen as competition for MyProtein (because they sell other brands) so could Nutricircle become a MyProtein dependency, or will it be nixed? Hence explaining why perhaps its performance hasn't picked up. Even though Boop has many THG brands on their platform, Nutricircle never has that much MyProtein (currently just 2 listings). This really makes me think Nutricircle may be on the chopping block at some point.

HT2 and Stalin, thanks for that information - it's useful to know. I haven't got a shareholder's knowledge of the Immotion investment, but my view is that management executed well but got absolutely snookered from the pandemic, and the eventual bounce back and exit was an extremely good outcome. The valuation paid for Immotion seemed more than fair? Martin's comments in interviews suggest he wasn't fond of the business beacuse of the underlying model especially in terms of being more relatively capital intensive, but I think that installed base of regularly recurring revenues seemed like a great business. However, lots of risks, like cheap Chinese manufacturing, technological obsoletion (happens rapidly), better competiti

BBN, very interesting comment re the Trust Pilot review. I just had a look. Part of me thinks this is someone talking down the stock (but I'm being biased as an investor), and if we can't trust Trust Pilot reviews then what can we trust? The review definitely strongly suggests that Boop is trading from 2 warehouses. My bet here would be that the strategic consignment model is already being implemented, likely with THG plc beauty brands being sold from THG Ingenuity fulfillment centre but being electronically re-allocated to Boop as an outnet. I don't think Huddled have moved stock there, nor do I think they are "operating" from there, although that said - following the strategic change - Huddled will be "operating" in a completely different way (i.e. ex-consideration for fulfillment).

That said, we may be a bit behind strategically in the timeline (as we rely on udpate videos which are retrospective and likely older than we expect), and they may already be moving and taking delivery of stock at Ingenuity - we are in Q3 now and the move is due to finish before the end of this quarter, hence it is already well underway. I think they said "end of Q3"to represent the point at which they plan to drop their existing warehousing and fully move to Ingenuity. They may be more related to the terms of the lease of current warehouse (i.e. x-monthly, certain notice periods, break clauses, etc) or staffing contracts, rather than the date they are up and running at Ingenuity. Remember part of this strategic change also involves closure of the existing warehouse as the last step, but before that point they could be operating both comfortably.

Interesting I'm yet to see a noticeable increase in Nutricircle's range, but having MyProtein as a partner via THG could really supercharge this.

HT2, thanks for explaining and also for sharing your experiences of Immotion. Were you happy with the overall shareholder return? I know Immotion repeatedly diluted and raised money, but I think sale still brought in an amount much larger than this?

I also agreed on the Huddled acqusition of Discount Dragon. If they make a success of this, that will be forgotten, but, if it doesn't work out, they could be seen as crooked. Part of me thinks there must have been an easier way for Huddled to acquire Discount Dragon without such a hefty cash payment from CEO to himself. Despite this, and all the related party transactions and web of shareholdings, I still find him credible and well-meaning - perhaps he is just an excellent salesman. But maybe there's the argument that he's not too bothered if it doesn't work out because he has already made decent money on Discount Dragon acquisition. Overall, I still think Martin is a force for good. I also perceive some ability to bring people into the business (like Boop, Nutricircle founders) and incentivise them (they're shareholdings and still driving their own brands), and this is important for a small company to succee

Wonder if there will be any read across from WPP's recent update. Although this is comparing a giant to a real minnow so probably not that relevant, with Aeorema very focused on campaigns and events in a more niche context ("brand activation). However, both have big clients as customers and both some risk from AI advertising. I'm hopeful they will make reiteration of the intention to buyback the shares, or perhaps they will say because of poor liquidity they haven't really been able to carry it out and intend to dividend the money out instead (this company already pays dividends). Of course, a concern would be an update that says trading is weaker, outlook is weaker, "macroeconomic concerns", customers taking longer to commit to new projects, etc... leading to a "need to conserve cash" and cancellation of the buyback. Until the update comes we won't know. I still think this a great company and am invested, but longer term I wonder how they can meaningfully scale (thus increasing profits) and instead expect them to maintain around this level or grow very slowly at the most.

HT2, while waiting for BBN's response to you. Are you a holder from Immotion days or just Huddled? I'm not a holder from Immotion.

I think BBN's forecasts (for top line revenue growth) were fair, and didn't factor in certain warehouse operational improvements that have been made since and would create the capacity for even greater sales. I think profit forecasting remains an unknown for now, with educated guesses based on the little historical trading information that we have.

The problem is that forecasting the business based on current operations is an easier task, whereas, after digesting the new strategic move, it is harder to forecast BUT key factors have likely improved significantly, including warehouse capacity, availability of stock, available time for management to focus, the ability to generate a return on marketing spend (i.e. not have to "throttle" marketing"), access to potential partners, etc, and so on. The unfortunate thing is that it will take until 2026 for this to be delineated more clearly and the share price may waver in the meantime.

In terms of downside, we can include the current cash (although being burned), inventory, growth of the brands, etc and also consider the lack of debt... This gives some reassurance, and also allows a rough downside risk to be calculated. Whereas the upside here is definitely multiples, but likely not til after Q4 now.

My impression now is that Q2-Q3 will show continued growth in sales (but I think the migration, including your point about demotivated staff, could affect this picture). If they are up and running by Q4, then Q4 onwards should show massive top line growth due to basically unlimited warehousing capacity and a big influx of available stuck (some of which based on consignment). So, I think revenues will accelerate in Q4 and possibly continue through 2026. Again, marigns and profit picture remains unclear.

BBN, I think it's unknown yet if the consignment model will be successul. On balance to me it looks positive, but there could be negatives (include unknown negatives). It could be said that the company was still in the process of proving its current model was profitable and never satisfactorily did this, and also that it is admitting failure and desperately making changes to its business model that may not work. Like I said though, I think consignment will be positive for the company, who will have the new headache of deciding how much THG Ingenuity partner products to sell (no inventory risk, possible sold at lower margin, in virtually unlimited supply) versus non-partner products (possibly better chance of enhanced margins through superior buying and negotiation, etc).

On management, they're clearly highly competent and Martin is a serious businessman. No complaints here at all. This is still s small company, and its governance will grow in line with its size.

You've hit the nail on the head with this investment. For me it is about risk-reward. The risk here is low due to growing revenues, lack of debt, competent management, etc (although the recent equity raise definitely might increase the perception of risk), but the reward is multiples from here.

Stalin123, agreed. The point is that cash burn is not the sign of a successful business, and however that is dressed (investment, inventory additions, etc) it is still not the sign of a successful business, but instead indicates the business still needs to prove it works.

Yes, my reading of the shareholder return event is that it was preferential to management and the continuation of the listed entity. Of course Martin did doubly well from this, as well as his related parties, but also from the acquisition of Huddled (his company) by the listed entity. No complaints if it works out!

Shareholdings*

Are a holder from Immotion days? If yes, what was your take on the shareholder return event?

I was not a shareholder when this was Immotion. My reading of the Immotion story is that they had bad timing related to the pandemic, but also that there were repeated dilutions and equity raises.

And yes there are definitely reasons not to like the concert party issues related to the Huddled acquisition, as well as shareholding’s of Martin via several entities. Some of these entities are involved in related party transactions (don’t like this part at all). There is a high potential for abuse here.

That said, this is a fast moving business with evolving structure, e.g. brining in Boop and Nutricircle founders, changing roles at CEO and Chairman level etc, but they do appear to moving in the right direction (building a board, bringing on institutions) and right sized for the business. But all in all, the concert party antics, related party transactions and revolving wheel of familiar names are shareholders or consultants does make me feel uncomfortable.

I actually bought a very small amount more today, but it’s a wait and see while I look for another prospect to build a large position instead. The business is ultimately much better than it has been previously: 3 growing e-commerce brands, lots of partners, still low brand penetration, potentially transformative THG Ingenuity deal, cashed up for growth, expanding board, consignment buying of stock, greater potential for ex-UK sales… that said, the better things look for the business, the more willing institutional investors will be to plump more money for shares and dilute us shareholders further. Good luck

BBN, Yes, so even if we assume that several weeks in June were "operationally profitable", we can still assume that Q2 was not as a whole. Also agreed that more recent business update videos were clearly indicating towards this and are likely behind in "strategic time".

HT2, you raise valid points around the real-life issues that actually might contribute to migration issues including poor business peformance preceding (i.e. due to demotivated or annoyed staff) or post-migration (integration issues with THG Ingenuity, transport of inventory).

Stalin, I agree with much of your sentiment but think the CEO (now Chairman) is good. His explanations of the business in videos and presentations are really valuable to investors, and better than most investor relations out there. At the same time, we have to remember that CEO/Chairman's are often expert salespeople to attract investors. Time will tell...

BBN, I think you were onto something with a previous suggestion (apologies if you didn't suggest this) that the weekly business update videos are delivered in an increasingly planned (or strategic) way. And also it is clear now that a huge amount is happening that isn't reported to us weekly - i.e. we probably have a bias towards lazily equating the small weekly updates as equivalent to everything that's happening.

I do agree that there has been testing and many of THG's brands were already being sold, especially on NC and BB. Obviously with THG and THG Ingenuity now being entirely separate entities I think it's still fair to assume THG is Huddled's first sign up.

Other interesting points are the fact that THG Ingeuinity has I think 12 sites in total and there is considerable scale. Also THG Ingeuinity is loss making and was recently entirely spun off by THG into a private entity.

A key shift is Martin from CEO to Chairman, and having a new CEO. My read is Mike Ashley was definitely hired as non-exec Director as an audition for potential CEO (with Martin already planning to move to Chairman). This gives Martin more time for strategic direction and allows Mike to takeover execution of the strategic direction. Another point is Martin is an executive chairman (previous was non-exec) which maintains the fact that he's running the ship.

I see the Huddled-Ingenuity partnership as basically Huddled being able to take Ingenuity partners' stock on cosignment - which I think will ultimately be more certain but lower margin. Huddled themselves can still maintain their own warehouses with stock from other non-Ingenuinity partners. I think theres's a chance Ingeuinity tries to embed Huddled and eventually bundle it as part of their own offering - this would have positives and negatives.

Can't help but think they could have got more for the quantum business at some point. Looking at the market caps of companies like Rigetta, IonQ and D-wave in the US, could they have explored a US listing for a better return? I note that their quantum business had revenues (which is more than some of the American companies can say).

Overall, perhaps it reflects a disciplined board or a board guided by bonus targets for business performance over the medium-term.

Yep, potentially transformative strategic partnership, but also makes it harder to project into the future.

A few questions:

- will we get updates around partner sign ups (e.g. name of brand, number of partners, nature - i.e. test, trial, full sign up, etc)?

- are they able to start announcing these prior to commencing in Q4?

- are they able to manage the transition from current warehouse to new set up well and hit the ground running?

- will THG Ingenuity be interested in acquiring the business and what basis might form their valuation?

I still think more information was needed around the equity raise, specifically what will the money be spent on? This is on a background of losses, cash burn, previous dead inventory issues, investment in warehousing, and reassurances that there would be no dilution, as well as an update that they were starting to take stock on a consignment basis (i.e. no need to pay for stock if it didn't sell). Ultimately, Huddled need more institutional interest (especially for share price performance) so it is a positive. So is this money for stock, to address cash burn, to allow them trade unprofitably for and focus on growth, increased marketing, or warehouse migration costs? It's not clear and guesswork.

Yes agreed, based on that wording we can take it for granted that Q2 was not profitable (and I also mean "operationally profitable" here). June may have been operationally profitable but I think he would have flagged this if so, so makes me think it was not.

The strategic move to THG makes a lot of sense, and the sunk capital into the current warehouse would have definitely been considered. My main concern here is that Q3 may have poorer performance due to the migration - maybe this will be handled very smoothly though. I think the move will maintain or enhance basket margins immediately, longer term risk is that Huddled's margin becomes thinner despite rising volumes due to the loss of the arbitrage being gained by buying teams currently due to the lower stock risk ("if it costs you nothing and you lose nothing if it doesn't sell...").

But sales volumes should fly from Q4 25/Q1 26 and growth will be continually powered by bringing on new brands. THG Ingenuity and THG are separate now, but looking at the companies that THG own this is a great scenario for Nutricircle (struggling for range) and Boop. Then all the other companies that use THC Ingeuinity... truly staggering prospect, hats off to management.

The equity raise probably dampened some sentiment. The main concern for me was the lack of a detailed explanation (but this is a small company), including the company's current operations or balance sheet. I believe cash burn may have also been a concern. I guess the key takeaway is, the plaster has been ripped off and we know the company is well funded to continue to demonstrate growth and this may maintain or even increase that growth rate.

Thank you very much - really useful. The California contract is such a blessing for Kooth - especially in terms of timing. I'm hopeful there will be more US expansion, but it may well be quite a wait for further significant progress on this front.

The key thing with the recent report is that it shows an acceleration in users. It's not clear how that chart relates to the users required for business metrics, for example, in the Annual Report they said 75k users of Soluna at the end of Feb whereas the chart shows lower.

Either way the chart now shows 319k. I remember reading that 300-350k users was the target required for additional funding as part of the California contract. I've not been able to find this in the Annual Report though so might be incorrect. If anyone does find anything to confirm or disprove this, please share.

But either way, looking good for Kooth. US roll out to continue, Canada and Australia to follow next year hopefully.

My previous post keeps getting cut off re the AGM, so it's not meant to be. But one major shareholder clearly opposed motion 7 to reappoint a director (opposition shareholding is equal to that major shareholder's number of shares held). This is interesting, but my musings were only speculative/idle gossip in nature. What we can say is that it looks like Head Office costs may have increased with the board changes.