Member Info for Commonsense5

At the end of this week it will be 4 months he 4 since we had a ‘strategic issues update’ on THG. The last update was operational only. The shares have halved and more since the last update in October 21 2021 ! and down massively since the operational update mid Jan.

These issues were material and proper institutions want news before they buy about ;

1. Chairman ? (And general governance)
2. Splitting up of business ?
3. Beauty spin out ?
4. Moving to proper main market (where all funds have to benchmar
5. Other points I am sure

I am sure there is more

To my disappointment as a shareholder THG is seriously moving into a bad boy of the stock market and the non execs have serious questions to answer. Time has gone on too long and we deserve an update. With the issue of a take private overhanging and the most embarrassing near director sale ever in the meantime that looks in hindsight a genius sale …

Yes the market is off BUT not as much as the hut and I will struggle to find any company that has kept its loyal shareholders in the dark as much as THG

I have had enough and action is required NOT head in the sand !!

The takeover panel has also had the wool pulled over its eyes IF PE rumours are true

I am not selling but as I say, enough is enough - an update to holders is required asap

Share price has fallen far too far, I think company were probably caught on the hop last time re commenting, agree it looks a partial re hash but this time I reckon we will get a company update on the back of it - let’s see

Aware frustrating but holders should try and relax. This is a deep value situation on one of the UK’s most exciting companies, still !!

I think either the press rumoured PE bids will play out (good for most holders but not all and not my preferred route) (by the way industry bidders will be watching too) OR there will be a major league management fight back. That might as many have discussed see them sell one division to focus on the other for a big number and I wouldn’t rule out a buy back.

The reason I say holders should relax (although I know painful) is that THG is in two of the best sectors you could want to be in and they are bl oody good at those sectors. There are probably a dozen industry multi multi billion players who would bite your arm off for either division - Nestle, Unilever Coca Cola and or L’Oréal and many beauty companies. Look at LVMH buying Feel Unique last year - they want digital assets like the websites we have. The value of these assets is NOT 1x sales. It is more like 2-5x sales. L’Oréal on 7x sales ! Even at 1x sales ignoring ingenuity it makes a mockery of the share price.

If any of the above is true then that explains why management can’t buy shares.

We are invested in an unbelievable business - Ocado £2.5bn revenue and £10bn mkt cap. Hut £2.2bn revenue moving to £2.6bn but market cap £1.5bn !! We all just need some patience, I would reckon 4 weeks maximum for some news working around PE timelines IF that press rumour is true, I hope !! Rarely smoke without fire.

I have been nibbling all day - hedgies dropping SP now at close - use to to your benefit - sadly I have already spent todays bullets !!

And the hedge funds win again ! Don’t let them ! They drive the price down and force sellers - they will be buying your stock back shortly ! Whilst the bigger funds sit and watch and wait for a strategic update the hedgies will win. Until they don’t !!

Just read the FT article about L’Oréal results where the ceo says there is an ‘infinite appetite for beauty products..’ this is the headline in the FT article. Really worth a read. Seems on about 7x sales.

The more I read about the HUT the more confident I am about it and it’s prospects.

Decent rally in Ocado today - back towards £10bn mkt cap with £2.5m sales - HUT £2.5bn + sales next year but £1.7bn mkt cap !!

Been buying more today - thought the SP consolidated nicely and steady and nicely built end of day. Volume down which is good and the whole thing tightening up.

I respect ASOS, great early movers but no own brands and those they own are poor. A reseller with great customer (currently) but ultimately branded companies should win and their strategic position is precarious, imho

Very helpful JimmyD thanks

I agree with your strategic theory wholly

Please can someone help high level (genuine question)

THG £2.2bn ish revenue … mkt cap £1.7bn
Ocado £2.5bn ish revenue mkt cap £8.5bn ?

As I say genuine question - feels like at least one of these numbers is wrong !

Genuinely not puffing or pushing … just asking for thoughts to compare and contrast - Hosai ? Dan190 ?

Mr mandco this website list is REALLY useful thank you - be great to be able to see this on the company website at some point

What an opportunity to get in - miles better than bottom picking - been able to decently top up this am

Quality post mr raw shark thank you - fully agree. I think some of this recent press could be a smokescreen for what is really going on. As long as they don’t say no approaches (even tentative) (which I suspect is highly unlikely) the stock should rally. If not too high it gives the more clued up a chance to top up

I hope my respect and keenness to share thoughts came through, apologies if it didn’t

Funny

I have always thought the board would be happy just owning ingenuity - it is possible in hindsight that everything else will have been about ‘seeding’ ingenuity - suspect we will be alot better advised at 7am tomorrow ! Let’s see. Once ingenuity has big critical mass it could be worth tens of millions - either London or Nasdaq, 2x that on on Nasdaq obviously ! Sadly

Dan - really good debate ! What chat boards should be all about ! Getting kids down but will revert later. Good brands as you know don’t grow on trees and mega cap buys them for many reasons. Look at the beauty sector ! They buy all the tiddlers. For the right price they can have the lot but more value to us and lower to a buyer if we get a contract…. Maybe 10 year 5 year break but who knows. Look at Unilever right now … to buy a nutrition OR beauty business would really keep their wolves at bay - whether they do the lot of not !!

Dan don’t forget Fevertree. When £500m mkt cap on market and going strong they were only 25 people above a shop - real fact as I knew it well. They outsourced everything apart from ‘managing the brand’. This is the same principle. It is a clever model - pure brand management.

Mr Dan sorry mate but i really believe it can. Any sale / disposal comes with a chunky ingenuity contract and the global brands do two things … 1. Help the product into the new owners wider audience and 2. Develop and expand the ‘brand’ with clever marketing / advertising. I also talk about ingenuity as I think building that core business is critical to what THG is AND if they get it right is massive ££ value. If Coca Cola say or Unilever want to do it themselves they can but THG I am sure would like that follow on contract.

Re your question - the original publicised Nestle contract was ten years £10m a year - I googled it a few days ago. Nestle take the brand and leave THG to execute. The exact splits of who does what I would love to know more.

I ‘think’ my assumptions are correct but happy to learn more OR be corrected. Your question and my response (correct or incorrect) goes to the absolute core of what we are invested in. Genuine question.

Either way, excited about tomorrow.

Sorry - they can ‘outbid’ pe 5x over - meant to write !

Any disposals will be trade / mega cap def NOT pe - it will be what they can do with the business to rapidly grow it and take cost out while they do it as their platforms are already there. They can put bid pe 5x over. Many of them know the company well already