Member Info for Canary3

Looking at it from another viewpoint, i think that the 2nd RNS will have sparked some activity around important business issues if it is viewed by stakeholders as being very bad news. I think the following will been ongoing since that RNS.

- The banks will be reviewing the terms of the revolving credit agreement in order to amend or get out of it entirely. Or as a minimum will be looking for much more information / clarity about the financials before going forward.
- Suppliers to the company will be reducing / amending credit terms perhaps even going as far as COD.
- The invoice factoring partner will be having urgent discussions about the data underpinning the invoices and may even be looking to amend the agreement perhaps even think about cancelling. Certainly they will have their lawyers on the case.
- Recruitment companies if they have vacancies and even if the don’t, will be on the phone to all people that work in the company getting them on their books or actively looking at vacancies/opportunities that they have. This is an ideal time for the agencies to approach and move key employees.
- The companies that stock and sell REVB products will have this as a key issue on their agendas and will be looking for clarity on current and future supplies, and clarity on their position regarding revenues and debt.
- The network of influencers will be wondering and asking questions about the immediate/ medium term future

The impact of this the company will be huge, these will be the conversations that dominate time and brain power within REVB, so Business a usual will likely suffer. On Feb 22nd they employed 422 people, so this on top of all the issues that i think will be being pursued, daily running of the business will be made much more difficult. IMO.

I would say that revenue recognition if serious will be difficult to get past,.

GL

Managing inventory was one of the major risks in the Listing document, of course at is one of many but it does seem to point to todays issues.

Management of the Group’s inventory
The Group depends on forecasting the demand for and popularity of various products to make purchasing decisions and to manage its inventory of SKUs. Demand for products can change significantly between the time inventory is ordered and the date of sale and consumers may not purchase products in the quantities that the Group expects.
If the Group fails to manage its inventory effectively, it may be subject to a heightened risk of inventory obsolescence and significant write-downs or write-offs. The Group’s profit margins may be negatively impacted if it is required to lower sale prices in order to reduce inventory levels.

So the advisers to the flotation are covered in that it was highlighted.

This might turn out to be a very big issue rather than a non-cash issue and future guidance not being impacted as indicated in todays announcemnt.

He certainly has a lot of skin in the game, and I also think that predators will be circling.

I am sure tense meetings are being held all around.

The company paid 7 million cash on completion and are paying down the rest at 4 million year for four years plus interest from the RNS in Oct.

So they carry a debt of 16 million plus interest to the chairman.

Wonder if that is secured on assets/ or unsecured.

Golden- just to reply to this one.

In the 6 months to March they invested 15 million in THG at Circa 195.

It was one of two 15 million pound investments they made in that period. So the management team at Chrysalis thought presumably 195 was great value.

However is looking fairly clear that the fund will need a lot of cash going forward and IMO thats why they have been reducing.

Probably supported by the new investment team, advising prior to form appointment

Just my opinion of course.

GL

Very interesting and worth a read.

So at End of March

The main focus in capital preservation to support unprofitable companies within the portfolio, they estimate that they have cash runways of 14 months and can support that and perhaps another year with care.

60 % of the portfolio was unprofitable at that time and will need cash to continue.

They are cutting back investments so as to have cash to support the unprofitable business and will not necessarily participate in fund-raising rounds. ( They did not take part in the latest round for we fox earlier in July).

At end of March they had 72.5 million of cash to support the group going forward.
At end of June they had 55 million cash to support the group.
So cash burn looks high at 17.5 million in the last three months.
They stress that it's about getting companies in the group cash flow positive.

In the 6 months to end of March they bought 15 million pounds worth of THG at Circa 195.

They also make multiple mentions of the fact that they can see equity in Public companies as a means to support liquidity in the fund.

Overall i think they are in a bit of bother, i suspect that trading in some of their unlisted companies will have deteriorated , meaning that the trust will have to help those companies shrink to fit their cloth or increase cash to support growth.

I wonder how much cash they have spent in the last 6 weeks, 5 million, 7.5 million 10 million? who knows.

In fact i think they are in more than a bit of bother and will be looking to get cash in one way or another.

So the state of play in the trust suggest to me that they are indeed sellers of their listed companies.

IF ThG delivers decent numbers I will be pleased that I bought a few more at 62p

But hey I am a mad ramper

I have just had another look at the new team and they all come from the Venture capital type world, so i think my initial thought is wrong, so perhaps its more about raising cash

top 10 holdings in the fund account for about 80% of the total fund and it seems only two are listed, THG and wise . Wise 7.8 of fund and THG 6.7

YTD THG down 69%
YTD wise down 35%

IF they need / want to put money into other companies then selling down Wise and THG is a way to raise cash.

Regardless of my initial error , I think that the SP slide is down to Chrysalis and not the underlying performance of the company.

We will find out in Sept.

One or two of the CO grades are remarkable .as far as i can see.

As far as i can make out the following is happening.

Jupiters 90 million at the time of the bid are held in the Chrysalis investment fund that came from the Merion takeover.

This Investment trust is spread around various Jupiter funds, but the management of the fund is still with the original management.

As posted here a new investment team to oversee the Chrysalis fund was put in place starting from the 1st of July, looking at the make up of the team they are seasoned investment professionals , that IMO are more likely to want out of the likes of Klarna, THg, Revb and so on.

Chrysalis still hold millions shares of THG in the fund , still over 6% of the fund which is valued at 572 million according to Citywide this morning.

The funsd is down 63.5% year on year, hence the new team and their new approach again that is my thought.

It is clear to me anyway that Chrysalis is selling down aggressively and are IMO price insensitive.

the steep fall in the SP is due to this IMO.

So SP down , investors and pundits highlight the negative, the opposite will happen when Chrysalis stop selling or more likely IMO, they will sell a major part of their holding to either existing big shareholders or PE.

Then everyone will start to focus on the positives that the company has.

All IMO of course ( as i have stressed throughout )!!

They have released 10 of the 12 assays from carlow at the request of the OZ authorities, the grades look good inciuding some high ones in Co and CU.

Trading should resume on Friday.

Remarkable share action.

I imagine that other major shareholders that turned down 1.70 will be on the phone to Jupiter trying to pick up some more at these prices, that is if Jupiter are going to sell out completely.

Th fund performance is abysmal, there will be big redemptions going on IMO and that means of course that the underlying shares will be getting sold down.

https://citywire.com/funds-insider/fund/merian-uk-mid-cap/c10585?section=investment-trust-insider

Good find 2PH

The uk fund mentioned has THG as its 4th biggest holding..

The Chrysalis thing was a disaster. 3rd biggest holding.

I think they will have taken a decision at the highest level in the funds to exit or significantly reduce their exposure to this sector.

Then they will look at companies in the sector and reduce according to their view on each one, or more likely by a fixed percentage regardless of prospects.

personally i am glad to see that RNS as it helps me take a view on the recent falls from when the Chairman bought in.

But as i say all investors take views that are both emotional as well as rational.

LOL

Jupiter getting out here as well ..

When the SP is going down and you are in the red there is a tendency is to focus on the negative aspects that the company has and of course the opposite is true in profit and SP rising the focus is on what the company is doing well.

So the negatives are minimised in good times and the positives are minimised in bad times, this is equally true of II’s as it applies to PI’s. I have worked with these people and they are human they are not unemotional number driven investors.

The BOE governor has done the exact same thing on the macro, going from fairly unconcerned to the sky is falling down in the course of the last 6 months.

IMO the recent broker notes have focused more on margin decline rather than a significant downturn in sales and even when they have adjusted their targets those are still higher than todays SP.

I have just re-read the Q1 trading update and it was very strong, personally i don't think that THG has fallen off a cliff in terms of sales and i think/hope that margin erosion has not been as bad as feared at that time.

Citi group said in their note that Beauty could be valued at more the the groups SP and Barclays said that Nutrition was valued at 320 million even after their catastrophic view on margin.

So if they are both correct then there is a lot of comfort there.

Turning to the overall Beauty market , we have seen some disasters including Revlon going bankrupt, ( debt, supply chain issues, stores sales falling and competition from new entrants including the rise of influencers and a move to cash up front from suppliers), boots on the other hand has done well.

I think that THG is all over the trend on sales via influencers and have not missed that boat.

Nutrition seems to be strong.

Of course the negatives are still around, high cost of acquisitions, lack of transparency on numbers, golden share , governance .

More controversially for some I believe the lack of IR , tweets and instagram is very good and is a sign that governance is getting under control, the move to ‘ the results will be out in in September and unless there is a significant issue there will be no ongoing comment' is exactly how it should be.

Although for me the sky will fall in if the results are delayed as i doubled down this AM.

GL

So i think this is a great idea but there are some challenges IMO.

The current position as i see it is,

Funding is critical , the asset is fantastic but the funding going forward must be sorted. SD has been very bullish about bank lending until very recently , and this announcement says to me he is looking elsewhere.

The key issue as i see it is,

That there is a debt secured on the asset and it is in the region of 40 / 50 million dollars US. That debt is held by NCM
Banks won't lend to GGP until that debt is paid
The way it's going to be paid off is by money for the 5% bought by NCM.

I think that is a vulnerable position for GGP.

So raising funds to pay the debt without needing the money for the 5% seems like a great idea.

Dual listing will do that,

Sd has just under a billion shares to play with, without needing shareholder approval, so there is plenty of capacity.

If he pre-sells 400 or 500 million to Aussie II’s then GGP will be home and dry, pay off the debt have plenty of working capital and the banks will probably lend without any issues.

The fly in the ointment is that the last three fund raising that SD has been involved in haven't made anyone any money and indeed some have lost a lot.

The fund raising are,

2 with Salt lake potash , one inherited and one later in his tenure. and of course the one at GGP.

So i think the Aussie II”s will drive a hard bargain, i expect a decent discount, and that may explain the recent fall from the 13’s to the mid 11’s. But of course it might not and they could demand more.

But regardless of the discount that could be paid, personally i think the future of GGP as an independent company will be assured if it goes forward as i envisage it, without it I am not so sure.

These thoughts are driven by GGP being beholden to NCM for the cash to pay off the debt.

When you are the size of GGP it’s always about funding and the prize is huge.

Of course this is all IMO and i am only a very small shareholder.

Well i just bought a bunch more..i think it will go up a lot in the next 12 months.

I feel that you are a tad pessimistic

DG221- I am on oldie , the best investment is in your health and family , meals out and so on are nice but for sure you are doing the right things.

Thumbs up to you and yours

Arguably on of the reasons for the mistrust around the company and hence the low SP is the lack of transparency around the numbers as they apply to each business line.

Separation will allow costs to be apportioned accurately and allow investors to see the performance of each line individually and collectively as a company rather than just collectively as it is now.

So the premise is flawed IMO