Member Info for danl90

Someone on here said everything I was saying about KPIs and value drivers, the scalable platform and also the use of data were the most value asset to Boohoo and that it's not just about growing profit. Below is the first few statements from the Hut Group in today's trading update. Notice the focus before anything else is all about the above as it is their EQUITY STORY and what drives the value in their business

"THG Holdings plc ("THG" or the "Group"), the global technology platform specialising in taking brands direct to consumers, today announces a trading update following the October and November sales period, during which sales performance for the Group has been ahead of expectations across all divisions.

Peak trading summary

The Group has seen new customer acquisition trends further accelerate into Q4 across all divisions, supported by very strong performances during Singles Day, Black Friday and Cyber Week. New active customers in November totalled over 1.7m (+74% YoY), with almost 900,000 new customers in Cyber Week alone. In addition, both customer retention rates and average spend per customer have seen continuing positive trends, further underpinning a very strong performance during the most important trading period of the year."

So first sentence Hut Group sets itself as a technology platform. It sells protein and makeup but is that worth a ridiculous multiple? No. Technology platform - "slap a multiple on there!"

Peak trading - new customers and activity (KPIs 1 & 2 for Boohoo). But the focus is all about retaining and growing spend with each customer you already have (the other boohoo KPIs)

I don't know the multiple Hut Trade at but something makes me think I'd rather have their multiple than a standard x8 - x10 you'd get for a wholesale business!

Also Hut state "The Group maintains medium-term guidance of annual revenue growth of +20% to +25% and stable adjusted EBITDA margins." which is dead inline with Boo

No it’s not a concern. New head of audit committee appointed only a few weeks back. Nothing will have been done prior to him coming in as he will have ultimate sign off for this. Also these processes are fairly slow and it’s just an auditor no one is really gunning for this

The concern was never “not having an auditor” it was “what might PWC have seen that made them walk away”

I spoke to my friend at PWC about it and basically it’s a tiny fee and a growing group so a tough audit. PWC are under pressure for not showing stones when standing up to clients so here was a great opportunity to get some great press.

Loss a £200k (nothing to PWC) and stick 10 years of great advertising in the bank

Few newspapers are saying Mike Ashley is back trying to snap up Debenhams. I always saw his bid for Topshop as the lead, as he could keep stores and jobs (this is his running charge for Debenhams)

Hut Group I have no idea how credible they would be. Looked at a few bits earlier today and protein and makeup is most of their revenue. While they have done clothes in the past I dont think any of this has been manufacture but just reseller (rag do you know?). So I think this helps boo as we can probably build a stronger business case for Topshop ie bang it into the scalable platform!

Only issue is Hut have DEEP pockets! But does a huge acquisition so soon after IPO work for them? They have never done a deal that big before and it’s a new skill set manufacturing clothes. The founder who’s in for a big pay day might think “let’s not rock the boat” while he still has £200m of this golden carrot left to get

I’ve said before Topshop for me is a key buy and should go well against Shein and Zara. If we go against Zara this is a higher price point so better margins. Having walked around Manchester this weekend every shopping is either Primark or Zara

Coast and warehouse can go for Primark and Topshop go for Zara. Shein will burn out

Go on TCM tell us

I think we have met in the middle. As I said my initial confusion was I replaced “trading update” as I thought all people here were hoping for an RNS similar to last years 3rd December post.

Yes the Sep RNS would be required under Rule 11 as this is “material new information.” Last years December 3rd note wasn’t and therefore it is purely at their discretion to choose to do this update.

It’s the same for this year we may wish to update on trading if it is in reference to Black Friday or being in line. Both of these aren’t “material new” so not required as Black Friday isn’t material and saying you’re still inline isn’t new

My point is that as we aren’t required to do a Black Friday update (we now agree) we can just wait until after the MP interview

Again I think the disagreement here was my part from the start inferring to a copy of the Dec 3rd statement from last year and people were referring to and not a full trading update which is how you read it. I did admit that on a couple of post prior despite you saying I can’t admit I’m wrong I sort of did :) I’m happy to admit when I have read something incorrect. I also did the same on the 10% thing.

I’ve no issue with putting hands up when needed. I also did the same with Rag the other day when I got the primark expectation figures incorrect

Fully get your point re wanting to see an upgrade before Jan (this would be great) but I think they will be cautious given the upgrade in Sep so I guess it’s hard for us to know how much of the items you list below is baked in. But this part is why there are buyer and there are sellers each day

To say you’re a head as they did in Sep I guess management need to confident that that trading pattern will continue to YE.

@PMoran everyone is talking about a Black Friday update. Last year was not a trading update. As I said I thought this conversation was referring to that. In relation to Black Friday no announcement is required under the aim rules ive laid this out for you

I think the fact that there hasn’t been an update from us or asos sort of proves I’m right as that’s two listed businesses and two sets of nomads agreeing with me that no RNS is needed in relation to Rule 11. Or should us and Asos be expecting a fine?

Why do you think we need to issue a trading update?

Last years RNS didn’t trigger any Rule 11 items it was an RNS they chose to do. You can choose to do updates when you like for good PR or if you think it’s needed (asos profit warning being a good example)

So tell me where you think we are triggering rule 11

To say again as Black Friday doesn’t trigger rule 11 (I’ve explained)they could wait until after 16th and do a general December announcement including BF IF THEY CHOOSE TO BUT NOT REQUIREMENT TO

@Pmoran

I had a look over this again and actually another part that means they don’t need to provide a trading update is the first sentence

“ An AIM company must issue notification without delay of any new developments which are not public knowledge which, if made public, would be likely to lead to a significant movement in the price”

The fact that you are public ally saying (Middle East, US expansion and lockdown etc) says that these items aren’t new development which aren’t public knowledge (we all know about them)

So an RNS is only required either
something we don’t currently know that might have a significant impact (all the above known and it’s up to investors to gauge their impact)
Or we trigger one of the four points below this sentence which I answered on a previous post (we must be inline with the 11p for the year and you have you consider any trading with the full and half year market expectations and take a balance across that period of time. Management might still wish to be cautious about Jan and Feb and that’s their discretion)

So as said there is no requirement for a trading update until Jan when it is noted as we have not trigger anything that would make us disclose sooner

Your point that trding inline would make the shares but above would make the shares rise is just your view. Anyone buying the shares today is buying on the basis of 11p and 20% long term growth. So long as that is announced in Jan they should be happy and hold (they got what they paid for). Of course profits sometimes come in above expectations (Jan and Feb might be great too) but we gave an “a head of expectations and upgrade” in Sep and the share price fell! So it cannot be the job of management to know how that market will or won’t react as you yourself might be wrong. In Sep the upgrade made the price fall

Management only have to make sure they are providing the material information an investor needs but they are allowed to exercise their judgement. Atm the world is unstable who knows if there will be another lockdown in Jan/Feb so why would management jump a head and raise expectations today only for that extra margin to be taken away? You don’t see companies constantly updating the market for a couple of good months

Use of data and customer engagement to drive number of site visits per customers (customers you have are cheaper than new customers to win ie a quick app notification is free vs an influencer post) and value/ items per basket (more item per order is less distribution cost per item via the data suggesting items they like and should bundle)

Data is your driver of GM%

The board answered this. Go and read the answer before posting rubbish (again)

It’s tik tok not insta. So they are targeting the generator younger than our typical audience.

I agree re the scatter gun approach and its brand is lost across demographic but they do make clothes that compete directly with ours but also as you say that oasis/ topshop more “middle America” demographic. This for me is where topshop sits as an international brand. And once again agree re poor customer service etc means this isn’t a medium to long term worry as customers will give up with them

Fashion nova stuff is ok but they have also had slave trade allegations. I’ve said before but for me one of those SPACs should roll boo and Fashionnova together. We then have US and Europe sorted(ish) and rather than cannibalise each other head over and take Asia

Should add none of the above means sales and also i imagine we have a higher app penetration which I imagine is a popular way to shop. Boo unfortunately don’t share that insight but I think asos do if you can dig it out

Link works and I’ll definitely read (tomorrow) so thanks for sharing. I agree medium to long term they won’t work. People don’t plan to buy dresses and our model and better quality will shine though 100%

What audience do you think Shein go for? My reason for thinking that they are having a great year is tik tok (12 - 20 year old) is sort of main demographic and Shein have had 3.2billion interactions vs 1.8billion for Fashionnova and 230m for PLT

Google traffic is similar. Shein and PLT were roughly same size in US traffic and then tik tok came (popular) in June it’s traffic has gone to the moon. PLT still showing strong growth though

I think Shein atm are blowing everyone out of the water. But hopefully you’re right!

You don’t think Shein are a threat in the US and here? I get operationally long term I agree it doesn’t win but it’s blowing both out of the water atm

Sorry seems like confusion on my part when I was saying trading update I was referring to Black Friday alone as that was what everyone was referring to the last few days and last years RNS on 3rd Dec

As long as you’re inline with expectations there is no need to update the market as you haven’t given any materially new information. Saying nothing is therefore saying you’re in line

The timing of being end of nov is relevant as you then only have 3 months to see the end of year so you’ve a closer view as to how close we are to the 11p and if we were tracking inline. If we were 10% down in month 1 of a new year it’s unlikely anyone would RNS as you’ve still 11months to make the difference back. So you won’t be pressed to issue at this point. The aim rules do allow judgement.

Sorry I thought I replied to your point on the actual rule ans showed that just for one days trading we won’t have triggered any of those points

Your final two paras I agree with

If we are inline there is no need to issue an RNS - agree that’s what I’ve been saying. If over the 9 months so far and 3 remaining there is no duty to update other than the standard two (full and half year). Last years Dec 3rd update was something they chose to do. They can just to send an RNS saying inline whenever they like. It’s just not needed. I gave the example of the RNS issued on an asos profit warning. No requirement to they just chose to do it. You can always chose to over disclose

My point was that if the choose to do an “inline statement” following Black Friday they can chose when they do this as it’s not a required trading update.

We only need to give trading update twice a year and again if we think the update would have a material impact. But if the view of the board is that in round we are at 11p for the full year there is no new information to be given. I agree all those points that will help Rev and earnings but they will have been baked in when management forecast 11p for the year when they issued results in Sep (the 11p is the full year earnings so the 6 months we saw and a forecast 6 months so that should have the upside from those things baked in)

There’s a few flaws in this unfortunately but good to see

@pmoran

The 10% thing I’m not sure where I got that from but it’s in my head for some reason. I thinks more the yardstick I’ve known to be used as you can’t just update every 5mins for being under and over you have to look at the year as a whole. So to your point re smashing Black Friday and being cautious I guess management don’t need to update on Black Friday alone as that would be uncautious ie they can’t say that a one day event will continue so its not enough to say we have “materially” stepped against expectations. Jan might be awful and net net we are at 11p still

Also when you think of the rule a one day good event doesn’t trigger an update as there could be future losses who knows in this hard to predict world

General disclosure of price sensitive information
11. An AIM company must issue notification without delay of any new developments which are not public knowledge concerning a change in:
? its financial condition; (same we still have tonnes of cash and set expectations on this)
? its sphere of activity; (n/a)
? the performance of its business; or (point above Black Friday already in the 11p and management will keep any overperformance as extra for any under but in the round we are tracking to 11p for the year)
? its expectation of its performance, (as above we expect a good Black Friday and it’s in the guidance issued so it’s public knowledge. It’s also expected we will finish around 11p for the year)
which, if made public, would be likely to lead to a substantial movement in the price of its AIM securities.

Black Friday is one day and happens every year. All investors are currently buying expectation of around 11p so as long as we are still ball park that number then confirming the point that Black Friday was inline with expectations or slightly above in theory should have 0 impact on the share price as you’re confirming what all investors know (for the year we will end up at 11p). A single day is unlikely to be big enough event to push that up to trigger the rules above

Management and Nomads obviously have to use some discretion re setting out new figures and that’s what you saw this year and last. There was no reason why last years RNS would trigger Rule 11. It was done as good message to the market.

Similarly boo did an RNS a few years ago to say “all fine with us” on a day asos did a profit warning. Not required to and RNS had no figures but nothing to stop you doing that. Same concept.

So partly right. Material in terms of financial performance is 10% of the full year expected figures. Black Friday although a big day for shopping is already cooked in to the full year expectation management have given you ie 11p of whatever for the full year so they have already given you the Black Friday result (expectation). Black Friday happening isn’t in its own right a material event. That’s why last year was just words and no numbers as it was a PR style RNS rather than a “material” update. They’d only have to give an update formally if we were 10% away from expectations

Last years wasn’t a required RNS it was a chose to do. As long as we are within our 10% expectation for the year we don’t need to put out figures or anything under the Aim rules until the Jan date

@inferno the basis for material in terms of financial figures is 10% of the full year expected numbers. As management “expect” Black Friday to be a blow out and that it’s 1 days in 365 it would not be material therefore you are not required to update the market

This is why last year didn’t have figures it was more of a PR piece than new expectations

I can only share my view so please others chip in. I think the growth we saw in the US will slow but will stay high. Much higher than we see in the U.K. so that’s great and huge driver. My worry for the US is Shein have a really strong hold there and they have a clever way of growing with influencers. I don’t think it changes thing for boo though as as I’ve said before I think adding topshop will give us a brand for “middle america” and PLT via the stronger brand and collaborations with celebs will grow as the more desirable option. Shein have been clever and have done some great things but I think “everything under one roof look” isn’t great and delivery times are slow.

I think when we come out of covid and we get US distribution sorted that helps boo as people haven’t got all day to wait for parcels. They go “I need a dress for tomorrow” and then they grow frustrated with Shein as 1) it’s slow and 2) if the quality is poor you’re let down for your night out