Member Info for Franalex

People power,
I agree it is going to take time and I fear at some stage a dilutive rights issue. The cash burn rate, regardless of reason and margin squeeze are alarming. If you burn cash you eventually run out and you need to do something well in advance of being a “forced raiser”.

Hope a lot of this is already in the share price as this is generally not a positive RNS.

Sain, yes remember this Board on Intu and also Debenhams full of individuals expecting a recovery and huge profits because the shares were so cheap. They were cheap for a very good reason, as is McColl.

Dimi, I share your concerns and am a long term holder with an average price well over double the current level. I have two daughters in their early 20s who, along with their friends, have items delivered free of charge every week from both ASOS and BooHoo. The problem as I see it, is that at least 80% of it is returned, also free and often all of it. They use the facility in the same way as a changing room in a store. With delivery costs going up, I worry about the sustainability of the business model. If they start to charge delivery they will just not order. Hanging on in the hope of an acquisition but certainly not going to average down, this is falling knife territory.

Hosai, if anyone has any doubt over Allen being heavyweight enough to deal with Moulding, they should read up on the acrimonious acquisition of Forte by Granada. Gerry Robinson was Super Heavyweight compared to Moulding being Middleweight. Allen was at the the heart of that huge deal.

Stockbroker, can understand your point but this Board has demonstrated they are not capable of delivering an update to the City and answering questions that arrive. The one at the end of last year resulting in a huge price fall, was the worst I have ever heard and the one in February was little better. I fear that unless they have someone in place who can do this important job competently then the April result will not lead to the share price increase everybody wants and some seem to think is certain.

Shearclass, I am afraid it is not just the numbers, it is how they are presented and questions dealt with. People were posting this identical message before the last two sets of numbers. The current Board does not have a clue how to present to the City and unless they have an experienced Chair on Board before the April announcement, I fear history will repeat itself.

What is the burn rate?. I know people who work there and they are putting in a lot of overhead and have pretty high staff churn.

Do they still have £550m? We do not know the current burn rate. There is no evidence of trading on a cash positive basis. Revenue is great but at some point they have to drive positive cash from it.

Yes and tried to sell a growth story for the next 3 years that had never been achieved in their history. One of the reasons that research has shown that most acquisitions do not add value.

I would continue to try and grow organically but stop any acquisitions. I fear it will transpire that they have grossly overpaid, something that is easy to do. As a CFO for almost 20 years I completed upwards of 15 acquisitions and the worst by far was when we bought on revenue rather than more traditional valuation techniques.

Some of them, most particularly the price paid for acquisitions, are irreversible. They need to urgently work out how to use the sales to create a business that generates cash after ALL cash costs. It is easy to buy revenue, more difficult to use that revenue to create a cash generative business.

Smartpee. What we are missing is that they appear to have significantly overpaid for acquisitions to gain revenue and have yet to work out how to turn the revenue into a business that generates rather than consumes cash. Plus the fact that the current Board have no clue on how to present numbers to the City.

If a takeover was on the cards the share price would not have fallen to these levels.

Certainly hope they have a new Chair before they have to give any more financial updates. Have seldom, if ever, seen a Board so lacking in knowledge of how to present them and deal with questions.

1Pencil, people have been posting similar comments since it dropped through £3. I thought when it floated that fair value was £2, and bought at that level. This is now in falling knife territory and if those posters who seem to have been doubling up every few days were truthful in their posts then they are sitting on huge losses. Would not be surprised if it tested £1 now.

Continuing inability to deliver a persuasive investor update. Chair needed urgently or it will get worse. All those proclaiming that shorters will fry, as they have been saying for weeks, fail to grasp what is expected from a PLC and it is seriously lacking at THG.

As people have been saying for at least the past two months as the price has continued relentlessly downward. I took that view at £2.00 which had always been my buy-in price since IPO. Got that wrong and would not be surprised now to see it test £1.5O in the next few days. Heavyweight Chair is urgently needed to lead on investor communications which are frankly dreadful.

And the worry. They have yet to handle one of these competently. Hopefully they have learned from the last debacle.

I am hoping that they are presented in a manner that indicates that they have learned from the woeful investor communications that were seen at the end of last year.