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At £10 Pmh : I’m on the housing ladder.

Don’t know why it dipped so hard on Friday? General mkt stuff?

I guess the easiest take-out offer for a buyer to model would be on the basis of breaking THG up and selling / spinning out divisions. And yet no point in making offer until GS elapses : gonna be an interesting year

Yes I read this with interest Okehurst. As I did I hit home why THG heavily push using their App. Also I would guess on beauty there is a level of sharing data as it’s all on one or linked platforms. Defining the value of this in a way a whale might come on board is Vivek’s job; explaining it to market MM and holding both accountable TGL. Interesting also that Shopify took a massive hit in SP this year too.

At Canary - good point - we forget TGL is significantly underwater - bad for him £-wise and on reputation. Similar to MM I guess - he won’t be enjoying SP.

Goldenyears is spot on in pointing to ingenuity. No one understands it. If there is current or long term value it needs to be presented explicitly by the Exec. The Chair / independent directors should be demanding this. If they are (and that’s a big if) and it’s not being presented publicly then I would infer some kind of action is underway (MBO / strategic partnership etc). I will be very very disappointed if Exec filibust on trading update a defer updating / providing clarity on strategy etc to y/e. What’s a real shame is if there is value it wouldn’t take much (just better communication) for it to be understood and if there isn’t value in ingenuity then it makes it much easier to appraise Beauty and Nutrition. Either way better communication is a positive.

Jokes aside, the chat over last few days demonstrates THG have options - quite a few - it would be so so helpful if the Exec gave some guidance as to where broadly they are headed? Also if 170p was thrown out of hand - then where do Exec value THG and why?

This bit:

‘Ingenuity is almost a shopping mall lots of shops in one place and all the stock is in the same place and ingenuity has a close in house if need be relationship with the brands’

I watched the half year trading update at some ungodly hour this morning (had a toothache) impressive Q&A from Exec - I wonder if freehold prices for pubs will reduce this year? And hoping the very recent support on energy for businesses feeds through into rtn with the hedging.

Thx Canary, 2phevs….

This bit below : it’s all about size effect is it not? Can THG get to a scale quickly enough where they become the default? I think that’s harder now than say it was 10-20yrs ago (with no basis just gut). Though I wonder if QIA would be interested in supporting this given long term opportunities it may offer in distribution etc and with wanting to make Doha a hub?

I guess at the moment THG is mis-scaled - it’s in an in between place across its divisions.

Anyone been to a Waga or RtN pub over break? What’s it been like, busy? London a little quiet. As long as it can a tick over sense RTN will come good. Exec team making good decisions it’s the wider environment that’s the risk but sense Waga etc will remain an affordable treat for those who already frequent it. Pubs may also have got a mini uplift from World Cup.

Great debates at the mo… bravo.
The game-changer as I read it then is can ingenuity pick up a whale that eats (read spends) like a whale that isn’t a THG entity. Nestle must be high on list. Hoping new head of ingenuity can lock in a couple of big deals; that’s all it would take. From my read nutrition and beauty doing okay

Spades… this is what I keep thinking … but am not seeing. I guess when rerate happens it’ll be sudden. Though could be a year off… I’m ave at 45p-ish .. hoping we clear that in Q1

I don’t think that’ll come. If it does will be 1st week Jan.

QIA are the only ones with the cash to support a MBO. Don’t think a debt driven deal works well (but I’m not an expert). QIA are no different to us in that they too need to presented with a business plan etc. Occums razor comes to mind; maybe there’s no MBO their simply on a Christmas break and focussed in Jan in hitting targets. I would add at +10,000 staff there is a Q as to whether that many are needed

Thanks Goldman, post impressed upon me that there is a time cap arriving (and relatively quickly) so - again - it places greater weight on an update. Thinking back to last year I think they’ll use Jan as trading update and sandbag for a strategic update in Mar/Apr - which I’ll find most annoying but makes sense. If an MBO is being planned then SP movements until such are larger irrelevant

A bit of insomnia (have awful tooth ache - what a time of year for it)…. It’s stuff like the extract below from sling elepha that management have to fix : where they did not give prior warning. My hope is with Charlie fully in now and Exec being focussed on coherent timely comms (that doesn’t mean constant news flow) that we are going to have a decent update - below from 28th Sept 22

Half-year sales came in well below expectations at +12% YoY (vs. the 13-21% guidance range), led by a steep YoY decline in nutrition segment sales in Q2. More worryingly, the result implies a sharp deterioration in June numbers - recall that management had previously reported sales were trending "in line" at its last trading update.

I don’t buy all this sinister coordinated action by shorters / journalists; it offers false comfort and an inviting self narrative. My view is market has seen an opportunity to squeeze THG and took it - successfully. The point is those that short only want to make money : there’s nothing personal etc in it. Ergo if THG Exec can offer reason to close short : decent trading update and some forward sight on strategy / BU performance etc. then shorts will close (and probably not just that : those that shorted will probably back their change in conviction and buy). It really is all down to a half decent performance in trading update and a very clear and cogent explanation of what is to come.

Thanks Okehurst, DDG etc…
I agree. But an an exercise in taking the otherside would that the price represents (a) a lack of belief in MM / Exec team and/or (b) an understanding of where the business is going. (Noting (b) can create (a)). There have been some shambles announcements (albeit Oct 21) and Charlie as a heavyweight Chair is yet to deliver that gravitas. So provided numbers are in line the big value creator is some clarity from MM / Exec on (c) the numbers (stop bundling it all up) and (d) business plan. This isn’t that hard to do : tho hard to do well - but Charlie as Chair should be all over it : as in demanding it. Let’s see

Another way of looking at it is competition is low (and may get thinner).