Member Info for danl90

But does splitting into diff pots which will have to handle conflicts of interests make you feel comfortable?

Also then you have to back diff management teams when Matt won’t have a view over all?

I’m not saying your wrong just curious on your view

I do agree. I also like revolution but why would I pay a premium for that when I get thg beauty and then nutrition and ingenuity at a discount?

I’d like to buy both tbh

Revolution also on ingenuity

For the life of me I can’t find the breakdown of this was and why this is split out on the results summaries

I had known but can’t find. If someone could share a link? Thanks

Sorry should also say there is £380m cash on balance sheet too so you can add that as a part. Helps makes the numbers a bit more workable. 30p of current price is paying for cash

Notry you’re right that an investor would own the lot (initially) but then some investors will sell some bits and buy others so the share registers will evolve

I think the valuation you have for beauty is punchy but if you have some comps to share I’d be interested in looking and agreeing

Nutrition is a business is like. I think customers here are very loyal and this will only grow but how much money does it make? Who knows

On so many levels it would make financial sense

Boohoo about to spend 100’s on a US warehouse. Asos have one which is ready to be automated so could handle extra volume

Boohoo have no EU capacity. Asos have loads and more to come

But culturally? Also asos want to be “lazer focused” on 20 somethings

A smarter deal would be asos buying boohoo and PLT and then boohoo re-listing as Debenhams

This would allow Debenhams to re-rate as a marketplace solution. It also fixes asos problem of revenue from 3rd party brands

This is why I’m not sure calling the re sell platform PLT is a good idea. Some times you only get value from splitting and selling and we’d be reluctant to sell something with the PLT name on it?

@claire suggest you run the numbers before you state this

The £800m was the balance between current market cap of the group and the beauty and nutrition parts

My point is sort of well if you agree with SoftBank re ingenuity then you’re laughing here. If you think SoftBank are wrong then can you at least justify £800m to pay the current price

Current value is £5.2bln so I think i showed what I’d value beauty and nutrition. Ultimately easier to look at those bits as there are comparables. Harder to value ingenuity as there’s nothing like it really out there expect Amazon or you could say Zalando (only that’s clothes focused)

I just don’t like how the conflict will look post split. How do we make sure beauty continues to get the right support from ingenuity and isn’t just a customer? Which it ultimately will be

Cash is there for more M&A but again doing M&A allowed hut to punch growth via ingenuity. Now any M&A done by beauty just becomes another ingenuity contract. Does that give beauty the same upside? Who knows

I think Matt is impatient. Just slow and deliver the strategy

I’m going to sit and wait

Boohoo and PLT sneezed. The group catches a cold

That’s it in a nutshell. The new brands over performed (high single digit growth vs 5% expectations)

I just don’t know if I can invest until we know the state of the Ingenuity contracts with beauty and nutrition. Something makes me feel as though these contracts will be weighted to Ingenuity although you’d like to think they are on the same terms as other customers?

I also don’t see how this helps beauty as ingenuity has both revolution beauty and brand aritecks on its platform. They directly compete with beauty and when it was one Hut we could learn from that insight but in future that won’t be allowed

A sum of parts is the way to look at this but we only know revenue numbers. On the ADVFN board someone has calculated a £1.5bln revenue run rate which only has a part contribution from Cult so full year you add an extra £100m or so

On a x2 revenue multiple you’re saying £3.2bln for beauty. But that’s a beauty business that is just brands and production. All logistics and D2C is within Ingenuity (similar to revolution)

Nutrition. Well at x2 revenue it looks like £1.2bln. So you’re now at £4.4bln

So is Ingenuity worth £800m? I’d say so. Even if just considering the bricks and mortor never mind the technology

But then at that point I’m at the current valuation ie no profit to gain. And this is all on a revenue multiple which is never a comfort zone of mine

I’d love to buy but might hold off for now. I just don’t like the break up

@kallu I don’t want the ceo changed. There is a lot they have done well. They have honed a test and repeat model which gives us fantastic agility. They have corrected ESG. They have taken the brand international. I think it was just a reluctance to commit to the capex. Asos when it had it string of profit warnings scared investors with the size of capex. Were boohoo scared of admitting of doing the same? It seems so. Also from the adj EBITDA figures it seems they haven’t had an easy time of automation

So I think this was just the business taking the careful route in the hope the marketing engine would bail them out. But 8% growth in US shows the gamble wasn’t the right one. Oh well it’s lesson learnt and the warehouse is on the way. EU via wholesale is upsetting but the big prize here is the US so let’s get investment geared towards that. Ultimately we now know Debenhams US launch is 2023!

Also Bruce add to this that JD are looking to buy Missguided. Missguided is popular in the US but not really boomed as get compete there (too expensive and ability to ship)

Well as soon as JD gets it the next day delivery will be possible including click and collect from the thousands of JD stores in the US

Does the boohoo proposition should as good when you add this threat on as well?

Rather than guess random numbers. Build a cashflow model of how you think the business will look over next 5 years. See what that valuation looks like

Divide that number against the number of shares. And if that number looks higher than the current price of the shares buy some and not worry about it

Also write a list of pros and cons and see how these impact your DCF. If you’re happy your cons are reflected and you’ve some upside from the pros you should be able to buy a chunk and sit back and ignore the short term noise

Or just go “might be £3” “might be £2.80” “I can’t tell you what the business should be worth but this is a bargain (but can’t explain why”

@bruce this is the point I made to PMornan (Bruce feel free to reply or again do what everyone does here and made a scarky comment, get a decent response from me and then go back to the shadows from whence you came)

In my view management have relied too much on “brand and marketing” this isn’t saying management aren’t the right people or good. But boohoo is ultimately in the platform business we just happen to sell clothes. The investment the last few years has been more akin to a regular clothing retailer when it comes to making the platform international. Boohoo service delivery outside of U.K. is second rate. When covid was around that was great (US growth has been insane) but did investment follow? No only more U.K. warehouses were born. Despite it also getting harder and harder to get stock to US (average delivery going from 4 days to 8 days). For customers who’s live are back to normal and where Amazon has created a culture of “now” boohoo is sort of way behind. If I can get a like for like product why would they not.

18 months ago I said boohoo needed a US warehouse. It was obvious. Bruce you also have to compare with peers. Gymshark is building TWO US warehouses (one east coast and one west coast). Asos has Atlanta which will double capacity when automation completes

Management earn very large salaries (have a look) and the reason is is that they are supposed to get these calls right. They got this was wrong

Yet somehow we all just go “aww unlucky, it doesn’t matter we’ve lost c.£2 billion of value”

When you’re at work and those above you make a silly decision do you ever say anything? Even to your peers? Or just follow all things blindly?

This is the opposite. There guys work for us and got this call wrong. You’re allowed to say so. It’s fine. You don’t get shot. Of course they have done some good things too. But this big decision is the one that’s cost us. Neil even said the “analysis for a US warehouse has only got better through the year” so they did the work for it ages ago. They just put it in the “nah not now draw”. Why? Because we haven’t got cash to pay for it.

As well boohoo is behind on automation again vs peers. Know how much cash will be saved annually from automation of Burnley? What about Sheffield? But instead of getting on with Sheffield or the US warehouse we have a pretty West end property

The other point is Europe 15% decline in sales (again). And guess what a warehouse for that is so far away we are having to go down the wholesale route. So give away margin and what JL told us was one of our biggest assets data. All gone. But we are having to do this as without a warehouse there is no credible way to change the proposition for EU. Peers? Asos launching Euro hub 2!

So take a breath Bruce. You can be angry that they got this wrong. You pay them insane salaries to get it right. They aren’t amateurs

Sorry to disappoint I might be all the things rag said but someone else I am not. Just because someone else spotted that rag makes point using wildly inaccurate figures doesn’t make us the same person

Also not quite sure I get the hostility? I said for ages boohoo had certain errors. Those errors came true and we have all lost a tonne of money. The board are fixing those specific errors directly but somehow I’m clueless

Want to point out anything I’ve been incorrect or wrong about then feel free. But not sure any of you will be able to (unless you go the rag route of wildly incorrect figures)

Short answer: yes

Why? Who knows

Agree. Won’t bother

Started typing it out and realised no one thinks I have a clue anyway so let’s see if you want me to bother or not

Votes below. Will probs save me a lot of time :)

Sorry I’ll post a summary of all this and a target. I’m happy to stand by my words and show a target and what it all means relative to a share price. Not just vague stories of pennywise

But i’d be buying

- direct question on the stock. JL says “we are clean” so that’s reassuring as this had me worried. Stock build on low sales = write down but he’s saying “clean” do we believe?
- question on competition. JL isn’t worried
- no pop up stores