Member Info for danl90

No I'm not saying "i am better at valuing a business than their in house experts?" my point was that if people were interested I would have replicated what it is they do to get to that number

You can then play with the inputs, to how you see the business, and give you a view to what you think it's worth

"Particularly if you think the PLT/ boohoo part will collapse" I don't think this. Ragtrade does. In 5 years he said. I think PLT and boohoo have to do 20% growth year on year or we are never seeing 200p again never mind 300p or 400p

My point is that somehow rag things boohoo/ plt will "wane" as he's now saying in 5 years and debs will make up the diff! And still be doing 20% annual growth? That's not true at all

He says this as he doesn't understand value and what the share would be if he's right. He should be short if he believes what he is saying but he doesn't understand share values. These are just appreciation tokens

I don’t think input costs will stay elevated

Look at the stock level - £200m more than this time last year. Why? They shipped Christmas early
Boohoo stock - also through the roof compared to last year. Why? They shipped Christmas early
Next stock. Also sky high. Why? They shipped Christmas early

Everyone has created their own bottle neck. They have all shipped autumn and winter seasons together scared of being the one caught out

You’re already seeing inbound freight prices fall (now everyone has shipped Christmas). When flights go US start you’ll see outbound freight prices fall too

Cotton etc goes up and down. When it’s scarce everyone plants it and then you have too much. Always been the case

Labour costs. Fine they go up but then they automate and strip out costs at a bigger gain.

Sorry I didn’t mean the ?

I meant to put

Investors will understand the normalisation of the delivery times I just think until they see long term trends re establish it will be hard for boohoo to claim this

Ultimately if you could PLT into asos we’d all be very rich. That’s the best answer here - if there weren’t egos to do it

You’ve compared EBIT with EBITDA so you’ve picked the wrong numbers

Investors?

@south it’s an odd position as you have

- asos with a 1st class platform which is making huge efficiency savings for it atm allowing it to further invest when others are slowing/ delaying projects (boohoo put off Sheffield automation and won’t even get a US warehouse until 2023!) but arguably has weaker own brands (only 7% growth form asos design) and hasn’t cracked the US

- boohoo which has great traction and presence in the US but now lacks the correct proposition to get to the customer ie delivery in 10 days not good enough

It's really tough to read as at a time when both are gearing up their capex budgets they are both getting hit on cash generation

If teh headwinds unwind then there is material upside but from these lows I don't think you'll see the highs as we did again as I think investor's won't pay forward for the earnings until there is a clear line of sight of sustained levels of growth (smashing out 40% then dropping to 9% leaves you sort of guessing what the "normal" picture looks like)

I think what has been promising from asos today is the huge cost efficiencies they have driven and are able to drive from their platform. From the boo update it was upsetting to learn boo was further behind but they are on with this so it's additional upside

I really hope commercial flighjts to US drive savigs for outbound frieght

comments people say when they are gambling and not investing

"last 2 get plunges in 5 years and both times price jumped back within a couple of weeks, can see this being no different"

No understanding or justification in this statement at all just hoping

Twice the revenue sounds great but the problem is that despite £80m of operational efficiency savings you have no extra profit (well you do I'm using the term loosely)

What you need to consider is similar to what boohoo presented ie what does the business look like if you make it like for like. But then you need to be comfortable that these costs will pass

Another issue here is that management are indicating that they are going to peddle harder to go for growth which is fine if you get it but my big itch here is that asos design revenue grew only 7%! That's shocking. Asos need to start buying up brands to bulk out their own brand portfolio. But from the COO/ CFO today they have no minerals for M&A. Let's hope a new CEO does

If missguided goes to JD I will be very annoyed as they could take that business stateside just as asos say they want to grow there

@ste 100% agree! hotel choc came out other week and basically said US is booming for us and that's all THG Ingenuity (THG don't do their UK online)

But it was same for revolution beauty they are smashing US and DTC over there and again it's all Ingenuity

The other week I was in Santorini at a vineyard. They sell their wine to UK via merchants the guy was saying he losses out on the big mark up. With ingenuity he could be D2C in UK or USA or anywhere in months. Cuts the merchant out. No idea how to do branding? THG helps (shopify doesn't). What to curate the offer ie packages or personalization? THG can help

They just need to show the scale of the way this platform helps. I think they have instead gone the other way of "just shout big logos and everyone will be impressed" (all businesses do this) but shopify is all SME and that's an insane value

Have you seen the stock build! extra £200m

Honestly wish an analyst asked about this

I've two thoughts
- it's early for Christmas (boohoo said this and so has next - so why if freight is so hard to get has everyone got tonnes of stock? is teh freight crunch part self inflicted ie everyone has gone early for christmas?)
- or sales slowth has left a tonne of stock and get ready for write downs

The Nick idea isn’t bad. Although Nick and Asos hate M&A so do you see a natural bump there

On the properties it’s more optics. It just looks messy and not the correct governance for a listed business. Plus extra £20m cash at the multiple we have will make you and I lot a happier

On Toblerone and vimto I looked into these. Either were bragged about and tbh if you go on vimtos website there is no D2C option so I suspect this deal never actually happened

On Toblerone card factory, moonpig and funky pigeon all do personalised Toblerone. So clearly there’s enough of it sold. I guess here Toblerone are thinking “fairly low cost and risk free chance of getting that high margin sales” but I don’t think anyone else is seeing it as a massive win. The article then conveniently misses out the other ingenuity deals that look amazing like the whiskey etc

So it was a very bias article. Asked some good questions but nothing too upsetting if the messaging tomorrow is good. I just think gbeh have to stop with all the big buzz words and tell us what it does in simple terms

Some very good positives

-£7bln long term strategy is good and at 8% EBITDA margin that’s some cashflow for shareholders
- next year going to be tough. Always was going to be
- no M&A to come. This is the big worry for me. I really don’t think I believe the growth as much and would like to see M&A. The story almost doesn’t fit ie topshop has been amazing brought above normal rates of new customers, brand awareness is organically high in key markets and growing like crazy. Yet, don’t think we’d do any more?
- follows from above but asos design grew 7%! That’s poor and when you look at the appendix now seems to include face and body? Why is face and body an asos design / own brand? It’s not. Is that just fluffing numbers?
- 1% increase in marketing on growing brand awareness not on trying to convert sales. Again disagrees with M&A message as topshop apparently been great for this. So buy somethings rather than doing £40m, £50m etc a year extra marketing (which they can’t track for conversion or sales growth, it’s just “awareness” but still “data led”? See more at CMD)
- directly asked about Shein. Tbh answer was poor but factually correct
- Nick had a calmness and charisma. This wasn’t planned but oh well. No one asked and seems they were told not to
- all a bit of a shock. US growth largely driven off topshop wholesale. Uninspiring

The issue for boohoo and asos now is they are at risk of making themselves look like retailers. In that case we as shareholders will be in for a rough ride as cash generated is only being pumped into more capex

If they can’t restore the growth story and “platform” scalability message then the higher multiples will never come back

Happy for more thoughts I just added a few

Never said I traded. I always said charts make no sense to me. I work on calculating a long term value and if there’s upside I go for it it

The difficulty with that has been atm the “headwinds” seems to be sticker and more painful than I have tried to assume

I don’t literally mean I won’t look today I’m just saying it won’t be pretty

There’s clearly an issue and Nick out like this is not good. There were sexual harassment claims a few weeks back maybe it was that?

But your ceo doesn’t go two days before a capital markets day to which he has been pivotal so far. That just isn’t a good sign

US performance is good but U.K. has a strong slow in it. EU I think is just a mess for everyone atm. ROW is same

Growth in Asos Design also wasn’t inspiring. They really need to get cracking with some M&A and start buying in more brands

Partner fulfilment I was calling for an nice to see

Don’t think I’ll even look today!

Few ideas for ingenuity

- none perishable food. They have a whiskey deal atm. There would be loads here. It’s often the case that English people in Germany can’t get PG tips/ Yorkshire tea etc. This could be an ingenuity solution with logistics, customer targeting and marketing done/ advised by ingenuity. PG can’t spend big advertising money trying to pick out the few U.K. citizens

Clothing/ shoes - as I said but asos would just be logistics. They don’t have the scale in the other areas. Untimely if Hut stayed together you could have seen Hut buying asos buy this now won’t happen. Also some brands will be too small or not the “20 something” reach that asos are focused on

Perfume/ skin care etc - range of beauty is very wide

Another idea is having a website for each country to be a market place (ie just copying Amazon) this allows SMEs to have more access where they can’t take a full website. This could be a mix between Amazon and what boo is doing with Debs (ie make it industry focused but do the fulfilment)

Amazon has no industry focus (it just lists items) and debs don’t do logistics or anything. So there will be appeal for some customers/ brands for a more focused version of both

I’m not against challenge (this is what winds me up about the boohoo board you breath anything negative and it’s “deramping”) as a shareholder you have to feel management and yourself can see an answer for the negative questions

There are some good points raised by The Analyst. But overall I think they are overplayed. Does that mean the stock is under/ over valued well that’s for debate

On cashflow, this doesn’t bother me (yet) building ingenuity isn’t cheap. Never was going to be. Amazon burnt cash for years on the belief that in the end it was right so I’m ok here

Is ingenuity better than competition? For me this is what Tuesday needs to be about but initial feel is yes due to the way “logistics” is plugged with data, insight, marketing, personalisation and so much more. Shopify and Amazon aren’t with you on the journey the way Hut is. This is appealing for brands who care about their global roll out. For me this is why you see small SME businesses on Shopify and global businesses on Ingenuity (is anything more global than coke?)

The Analyst raise a great point re Toblerone. And that’s a potential worry. It’s very true that in a market with “unparalleled growth” are we looking for deals (and shouting about them in RNS updates) that will hardly move the needle. I mean I can get a personalised Toblerone from
Card Factory and they can’t be selling that many

Outside of beauty where are our thoughts of where Ingenuity can be applied? Clothing would be great. You could almost cut out asos (although I’m a shareholder there and I think they will announce a play to allow clothing brands on their platform at their capital markets day - day after Hut)

Medical / pharma could be good but this is largely established

So tbh it’s a very good point as to where the “unparalleled growth” is. But to date we know clients are “ Clients of the platform have included Nestlé, Procter & Gamble, Walgreens Boots Alliance, Coca Cola, Johnson & Johnson, Clorox, L'Occitane, Homebase and PZ Cussons, says THG”

So clearly some big names. They really need to sell this on Tuesday

Governance. Just put in a chairman. Please!

Properties. It’s annoying when people complain about cashflow there is £20m a year flying out in rent to Matt. The funds wanted this? Not buying it. Just put them back Matt. Let’s cheap the £20m and do some more M&A

Beauty spin off. Shame but I can’t disagree it’s undervalued (but only of Ingenuity is even worth anything!)

The market for ingenuity must be huge. Look at Amazon and shopify. The question is though are we too late and been sold a pup? Commerce revenue this year will be £40m or so so I’d like a clear plan on Tuesday of how this grows and where the £1.6bln for Soft will be spent

Thanks but this won’t let us read. Can you copy it to the board?

Can you share?

Also I should add the current success is not from dupes it’s from “creator revolution” blowing up on tik tok. This is now one of the leading drug store make up brands (we aren’t against Nars here)

The other big driver of the brand here is “collabs” like the recent corpse bride and simpsons collections

These are great for driving fans of the collabs to revolution. Hopefully they like the product and stay as revolution is good value for the quality

My concern here would be how much do these collabs cost and how does that extra cost hit margin?

But my more positive view is that the extra marketing cost is offset by a spike in sales. Also make up is generally very high margin anyway. And if this wasn’t a successful strategy management wouldn’t be repeating and it’s often seen by the likes of boohoo etc

Also worth reading the Sosandar annual results for last year. They put test and repeat as the basis for saving them during Covid ie not getting lumped with stock during changing customer habits

The inventory build your saying is not actually a build in quantity away from test and repeat but actually an expansion of product across categories and choice. So your point was slightly incorrect