Member Info for cantbelieveit

Used Gemini, which Ive been feeding it for 3 months or so information, didn't write any of this, it's a copy paste

Gary, the sad part is im still six figures in, with company money, personal i sold, anyway my comment won't move any money to be sold, just a word of warning, either we all cut through the bs and say it how it is, otherwise this will carry on and get stolen from us,

Launches to stop them from doing the math on the bottom line.

The Ultimate Reality: The "9-Year" Illusion

Here is the candid truth: They probably don't intend to justify this for 9 years. The 10-year contract wasn't designed to be lived out to the year 2035; it was designed to make Ingenuity look incredibly valuable right now so that Matt Moulding has options.

The likely endgames before the 9 years are up:

Take THG Private: Once the share price stays depressed long enough (because the market hates the structure), Moulding or a private equity backer might launch a bid to buy the rest of THG Public on the cheap and merge it back together away from public scrutiny.

Sell the Brands: A massive conglomerate (like L'Oréal or Nestlé) buys THG Beauty or Nutrition. The buyer will pay the massive "break fee" to cancel the Ingenuity contract, moving the logistics to their own network. THG Public gets a cash buyout, Ingenuity gets a massive exit penalty payout, and the headache is over.

Summary: They will justify it with accounting jargon ("asset-light models"), independent audits, and a lot of PR spin about revenue growth. But the endgame is likely an exit strategy, not a decade of answering angry questions at Annual General Meetings.

Asked if how do they justify this for the next 9 years until the and ingenuity contract expires

To survive the next 9 years of shareholder scrutiny over this contract, Matthew Moulding and the THG board will rely on a very specific, well-rehearsed corporate playbook.

They won't call it "shady"; they will frame it as a visionary strategic masterstroke. Here is exactly how management will try to justify the ongoing "Ingenuity Tax" to you and the rest of the market over the next decade.

### 1. The "CapEx Shield" Narrative

Their number one defense will be pointing to the Capital Expenditure (CapEx) line on the cash flow statement.

* **The Pitch:** "Yes, we pay Ingenuity a £480m+ service fee, but look at our CapEx! Before the split, we were spending £130m+ a year building data centers and automated warehouses. Now, our CapEx is only £20m. We de-risked the business!"

* **The Reality:** They traded a temporary investment cost (CapEx) for a permanent, margin-crushing operating cost (OpEx). But they will constantly argue that THG Public is "safer" because it doesn't have to fund the robots anymore.

### 2. The "Independent Benchmarking" Defense

Whenever activists like Kelso Group complain about the fees, the Board will hide behind legal and accounting shields.

* **The Pitch:** "The Master Services Agreement (MSA) is subject to strict, independent benchmarking every few years. Our Related Party Committee, chaired by independent directors, ensures we only pay fair market rates."

* **The Reality:** "Market rate" is incredibly subjective in tech and logistics. Ingenuity can easily justify charging premium rates by bundling "bespoke AI data analytics" with standard warehouse shipping. As long as an external auditor signs a piece of paper saying the price is within a 20% variance of the market, the Board is legally protected.

### 3. The Macro Blame Game

To distract from the fact that the Ingenuity contract is eating the profit margin, they will blame everything else in the global economy.

* **The Pitch:** "Our margins are tight this year because of [Insert Current Crisis: Red Sea shipping costs, whey protein commodity spikes, weak consumer confidence in Asia]."

* **The Reality:** We already saw this in late 2025 and early 2026 when they blamed whey prices for Nutrition's 4% margin, while competitors maintained 30% margins. They will use global macro events as permanent cover for the structural flaw in their own business model.

### 4. The Top-Line Distraction (The "Look over here!" Strategy)

If the profits look bad, you talk about the revenue.

* **The Pitch:** "Lookfantastic UK just grew by 16% this quarter! Myprotein is launching in 500 new US grocery stores! We are capturing massive market share!"

* **The Reality:** Revenue growth is great, but if you are tied to a fixed-margin service contract, growing revenue just means you are handing a larger check to Ingenuity. They will try to keep investors focused on brand expansion an

1. Thursday's Rally: The "Headline" Spin

When the report dropped on Thursday morning, THG presented a picture of a massive turnaround.The "Profit" Headline: THG reported a Statutory Profit After Tax of £54.1 million (compared to a massive £326.1m loss last year).Beating Expectations: Their Adjusted EBITDA came in at £76.6 million, beating the market consensus of ~£74.3 million.Q4 Boom: They boasted a brilliant Christmas period, with Lookfantastic's UK sales jumping 16.2% in Q4, driving the group to exit the year with 7.2% revenue growth.

The HMRC "Lottery Ticket": Management teased that they are expecting a substantive update by the end of Spring 2026 on a VAT claim, which could result in a surprise £78 million cash payout from the government.If you only read those four bullet points, you buy the stock.

2. Friday's Drop: The "Morning After" RealityBy Friday, the institutional investors had dug into the actual balance sheet and realized the headlines were hiding some harsh realities.The Profit was an Illusion: That £54.1 million "Profit After Tax" was not from selling protein and lipstick. It was heavily supported by a one-off £103 million cash injection from selling off an asset (Claremont Ingredients). When you strip that out, the core business still posted a Pre-Tax Loss of £69.4 million.

The Cash Burn: Despite claiming a massive turnaround, the company actually burned £51.8 million in Free Cash Flow over the year. They promised to generate £25m–£50m in cash next year, but the market is tired of promises.Margins are Still Shrinking: Even with a record Q4, the group's Adjusted EBITDA margin actually fell to 4.5% (down from 4.8% last year).

The "Whey" Excuse Returns: Management once again blamed "record-high whey prices" for pressuring THG Nutrition's margins. As we discussed previously regarding Applied Nutrition (APN), competitors facing the exact same whey prices are maintaining 30% margins, highlighting that THG's structural costs are the real issue.

3. The "Ingenuity Tax" ConnectionThese results perfectly validate our previous deep dive. THG generated £1.72 billion in revenue, but only squeezed out a 4.5% Adjusted EBITDA margin (and a statutory operating loss without asset sales).Why? Because no matter how much revenue Lookfantastic and Myprotein generate, they are legally locked into paying hundreds of millions in service fees to the now-private Ingenuity entity. The top-line sales are growing, but the bottom-line profit is still being siphoned away.

Can someone explain what has happened to the share price? I have no clue

Unbelievable, since the last time I posted saying APN nearing THG in terms of market cap, now APN is £50M bigger in terms of market cap. Un-believ-able, as others have said its a case of 'lets keep fuelling the ingenuity machine with sales / orders / revenue, who cares about prices and profit, lets divert funds from thg to ingenuity' it seems unfortnately, very sad

I thought I was in this mess (which by the way is right next to you as we're both in the same share lol) because of the robots and now you're sending me a robots answer as proof

Anyway, the line that matters the most and stuck out like a sore thumb is:

Yes, banks protect their loans before shareholders

That's all I need to know about banks potentially stopping the dodgy ingenuity deal

Anyway back to the bigger picture, 80 percent of my money still on thg, want it to go ideally to 70p so I can leave, go to us all, just if you're robbing me blind don't come out and say whey prices this, vat that,

Ps: I need to apologise to Stanleyb as I came very close to blocking him when he kept repeating the same message of profit and dividends but he was most likely the one to open my eyes to what's going on

Sorry and gl

THG Public (RemainCo): Kept the vast majority of the £350m+ debt.

Ingenuity Private (Moulding): Started life relatively debt-free (funded by the £75m cash raise from shareholders).

The Result: The banks are happy because their loan is secured against the assets that actually make money (Myprotein/Lookfantastic). They didn't prevent the deal because their security (the cash flow from selling protein) is still safe, even if the "Ingenuity Tax" is bleeding the excess profit.

Summary Verdict on the Comment

The comment is Naive.

The User Thinks: "Banks protect the company from bad deals."

The Reality: "Banks protect their loan from bad deals."

As long as THG can pay the interest, the banks will happily let the company sign a contract that effectively transfers all the profit to a private entity. That is not their problem—it is yours.

This is Gemini

Here is the breakdown of why the banks allowed this "bad deal" to happen and why their interests are completely different from yours.

### 1. The Bank's Only Goal: Solvency, Not Profit

Banks do not care if THG makes a 30% profit margin or a 3% profit margin, as long as the company generates **enough cash to pay the interest** on the debt.

* **Shareholder Goal:** You want the service fee to be low (£100m) so the *profit* is high (£80m) to boost the share price.

* **Bank Goal:** The bank wants the service fee to be "predictable" so that the warehouse keeps running and the goods keep shipping.

* **The Reality:** Even with the massive "Ingenuity Tax" (overpayment), THG Beauty and Nutrition still generate enough gross cash to service the bank loans. Since the bank gets paid *first* (before profit is calculated), they are safe. You (the shareholder) get paid *last* (dividends/share price), so you take the hit on the margin.

### 2. Banks Actually *Preferred* This Structure

Paradoxically, the banks likely **pushed** for this demerger because it "de-risked" their loan.

* **Before (Integrated):** The banks were lending to a group that was burning hundreds of millions of pounds buying robots and building data centers (high CapEx). This is risky for a bank.

* **After (Demerged):** The public company (RemainCo) is now just a "customer." It pays a fixed fee to Ingenuity.

* **Bank Logic:** "We prefer lending to a retailer with a fixed cost (rent/service fee) than to a tech startup burning cash unpredictably."

* The banks traded **"Capex Risk"** (Ingenuity burning cash) for **"Opex Risk"** (High service fees). For a lender, this is often safer, even if it destroys the profit margin for shareholders.

### 3. The "Fairness Opinion" Shield

The user asks: *"How did the deal get cleared?"*

It got cleared because the banks rely on a legal shield called a **"Fairness Opinion."**

* **The Mechanism:** An "Independent Committee" of directors (who are often not experts in logistics pricing) hires an investment bank to write a report certifying that the prices are "within a market range."

* **The Trick:** "Market range" is very wide. If the market rate for fulfillment is 15%–20%, and Ingenuity charges 20.5%, the report says it is "fair."

* **Bank Sign-off:** The lending banks (Barclays/Citi) look at this report and say, "Okay, the independent experts say it's fair, so we aren't liable." They don't audit the price of every parcel; they just audit the paperwork.

### 4. The "Debt Trap" Reality

Crucially, the banks protected themselves by keeping the debt with the **Public Company** (You).

Bro who are you? Whats the point of your message? What are you trying to achieve here? Get lost man

What MM has to say about poor profit performance

Whey prices

Apn clearly shows that whey prices is not a factor,

I'm sorry I was almost there, 90 percent and now retreating to my original thinking, anyways still holding unfortunately

Crafty it's very incestuous the fact he runs both and also who signs a deal for 10 years, if you were confident ingenuity was the best provider for thg you wouldn't tie them in for a decade, please lets be realistic here,

Hah she is not my biggest fan with my amazing investment here, i won't be saying anything especially on a Saturday morning :))

I loved your reply and appreciate that, it does help me .

My last follow up and I'll shut up after these two

- why is ingenuity thriving now then when remainco is it's biggest client, why couldn't it thrive under thg

- why hasn't one insider bought shares since demerger?

The conspiracy theories

My other half asked me why i was so upset yday

I broke it down as follows:

I bought thg stock which comprises of tech, nutrition and beauty, 3 divisions

Then CEO says we're taking one of these private but if you want to keep all 3 your money is now not the same before, it's much less

Then he takes it private but before he does he signs a 10 year deal at rates no-one knows about

Then all of a sudden this tech division that was weighing down the whole company is suddenly thriving

Then the other two divisions which should be thriving without the tech one that had to go now need more money and CEO loans it money in exchange for shares that are dirt cheap

And then we have stuff like when he owned buildings and rented them out to the company and court cases against owner on MP, etc

Safe to say as I broke it down to her I regretted ever getting involved in this but here we are still

These are not conspiracy theories these are true events

ROCK8, you nailed it on the head, and i was thinking about this, sell it cheap, stack em up high, because money funneled over to Ingenuity, why get THG to make a profit when your other company thats private is reaping the rewards, you sir win best logical comment of the year! couldnt agree more

OSG, that was in isa and was about 20% of my holding, I will make a promise to you, one insider deal, one insider to buy shares in THG and Ill put it in right back on the same day. Show me one insider post demerger that puts money in here and ill put the 20% right back in, I swear

Osg so I'm to blame for the fall? So I've cost myself 70k please my friend and my post was deleted I wonder why, this is beyond a joke

Anyway for the last week all I have done is refresh this page about a million times and read every word, I unfortunately actually have to work so here are my parting words because I need to stay away from this otherwise its all consuming:

Don't sell, don't short, don't trade, don't divide. I'm not asking for anyone to short this, or sell their shares or for a riot to start between us.

All I'm asking is ask more, demand more. Ask more of MM, and IR team. Demand more proof, insights. Lets stick up for what we worth as together we have a lot of share percentage so lets unite in stopping any shadiness, preventing more of it and lets stick together and demand more light on stuff. That can only be a good thing right.

This is still undervalued that is a certainty, but it could also be taken away from us at an even greater loss. Lets try to prevent that and lets try to get what is ours.

GL to us all, all the best guys, truly mean it

I actually have a life, I'm a human being, now think of things that are major events that happen in a persons life, and perhaps some of those happend to me, im voicing it now, because i have the time and focus now to do it, and ive had enough of the pulling of the wool over everyones eyes.

Im gonna be honest and raw right now - Anyone here that still defends MM after the stock grab / loan at 32p and the demerger conditions and 10 year contract of THG with Ingenuity pre demerger I have serious like 99% certainties in my head that youre either a friend of his or family or youre being paid or your fake, thats how i personally feel about this

And not saying that about you crafty,

just how i feel when i read comments about MM that are in a good light from current shareholders , like someone backstabbing you like that and youre defending them, nah something is fishy

We cant say that Crafty for the next 10 years can we, thats what I said for four years to myself, and then it was ingenuity holding it down, because it was loss making so now 4 years later and after demerger were still being manipulated... if thats case give me 62 to 70 p and let me exit