Member Info for G_G_G

Hi 55555, yes I'm buying because I think at some point MM will have to admit his pigheadedness on certain things is doing a huge amount of harm to the company and start changing his tactics. Pricing (improving margin) being the main one. I also believe an mcap of £400m (US$450m) makes this company something that can be easily swallowed by any fund or company with a decent balance sheet. To put things in perspective, just US$1bn could now pick up the company at 60p and clear most debt. Given the company is due to be fcf neutral by the end of next year there isn't a lot more investment that's required before it starts printing money, and I have no doubt some margin and cost adjustments could potentially make it profitable even earlier. Even in today's market. Appears to be a crazy bargain atm and worst case scenario the company gets taken out for significantly more than today's sp in 12 months when the golden share disappears. Reckon MM will take it private before-hand though. And even though the city etc would point fingers and call him a thief etc., it's down to their actions that has made this happen. PIs haven't created this spiral. In my mind the only question is how low will it go before MM makes a move, because I don't see him allowing someone else to buy his company for f'all. And I think directors are already taking their positions ahead of time.

Meant to ask about this earlier. Anyone have a view on the impact of being removed from the FTSE All-World Index? Given the sp has been in a terminal decline for a while it's hard to see the impact of anything these days except for things like profit warnings.

Thanks 2phevs - Share count is 1,265,251,105 by the way :) Means the mcap is at that nice round number of £400m, which could have been the target for the bots before the next assault. Next I'd imagine is £350m to the downside. But remember the bots move both ways as we've seen with +10% moves on nothing so equally we could move back to £450m for no reason.

'Problem is THG run on debt and that’s all that’s too it.'

Robbo, well said. Very succinct summation of why the market has punished THG and other growth stocks. It's why I'm banging on about margin. The city at the moment don't care about growth. They care that you can turn a profit. I'm guessing because they know it will be very difficult to find money in this environment. And this environment is going to be with us for years to come. People seem to forget the ftse dropped from the highs of late 2007 to only recover to the same level in mid 2013. The DOW took until early 2013. As crazy as everything seems right now, the reality is we haven't broken the highs recorded just before Covid f@cked the world. And you need to ask yourself if the world economy is in a better state now versus then. Easy answer. The market has further to drop. But I'm not sure how much further they can take THG before someone picks it up for next to nothing. Incredible to think the two most recent acquisitions alone were for 30% more than the current mcap. And that's before accounting for their other massive established brands, Ingenuity, and the huge amounts of investments in tech and infrastructure made in the past couple of years. If it drops further I will be buying more.

MM can make some simple fixes such as margin protection to prove fcf being neutral next year is going to happen. The 'growth at all costs' strategy needs to be rested until the world comes out of its current slump. And that will be 3 years from now if we're lucky. Time for him to work the investments and assets that have been purchased and built over years, which also means he needs to start cutting costs including staff. The party is over and its time for MM to put on his big boy pants. No more charity to consumers, staff and friends. Otherwise the whole thing goes south. And as some on here have pointed out, he'll lose his company in 12 months for f'all if he doesn't start making some tough, yet sensible decisions. It's really down to him now.

Can someone please point me to the most recent rns that states the number of shares in issue? Or better still provide the number?

Agree RAH, the recent buys were significant and gave me confidence to finally dip my toe in the water here for 300k.

Have to say it has been frustrating to watch MM from the sidelines make some pretty unsound decisions and screw the sp even more than what the market has punished growth stocks. But the business isn't going bust anytime soon. He just needs to make a few important calls, and focus more on increasing margin. The sp will rebound and also give him flexibility to raise some cash further down the line if required. His focus has to be on things that will increase the sp / mcap from now. Confidence in the business simply isn't there at the moment and the company is being priced to go under. If he can reclaim the confidence of the market by focusing on what matters most for growth stocks in a recession (being fcf neutral or +ve), then the re-bound will be spectacular when the world comes out of this storm. I can't see the sp getting back over £1 in the next 2 years without him doing this. And I also can't see it being taken over for +£1 for the same reasons. There's really no other way if he wants the company to succeed.

Simple short term fix for MM is he needs to show that 'broadly fcf neutral' in 2023 is 100% certainty. Easiest way to do this is to put up prices and re-base his margin. The city care more about margin and profitability over revenue growth - Just look at how they're growing revenue at double digits in this ****ty environment and the sp decline. When we're not looking at double digit inflation, a worldwide recession, and hard to access finance, then he can go back to chasing growth. But the world has moved on from this 'growth friendly' environment and THG (along with Deliveroo, Ocado etc.) need to show they are capable of tightening their belts to turn a profit. The age of easy money has gone for the next few years as a minimum, which means the only way companies like this can access finance is through dilution or asset sales (at very low multiples). The market has corrected (some would say over-corrected) growth stocks based on these things, which makes any dilution or asset sale punitive to the owner (current shareholders). Tiem for MM to face reality and shift from his growth at all costs outlook.

THG needs to grow margin to prove that fcf neutral in 2023, and fcf +ve in 2024, isn't more Moulding bull****. Prices being increased combined with marketing campaigns will maintain the customer base (perhaps even grow), increase revenue, and profit. The only number that matters with brand growth is 'number of consumers'. Not 'repeat purchase rates' or 'average weight of purchase' or any of that bull****. It's called 'double jeopardy law', something that most financial and marketing directors haven't heard of because they're uneducated in the science of brand mgt. It's also why 'growing share via price competition' is a fallacy unless you compete solely on price e.g. Aldi and Lidl. Afaik this isn't the case for any THG products. And unless you're attracting new customers all you're doing is giving up margin to people who buy you normally anyway. In other words 'non-customers' don't know you're price competitive because they don't buy your products. Aldi / Lidl are always marketing and driving PR on their price competitiveness, which is why people switch spend to these retailers when they need to tighten their belts like in the Great Recession, and again now. Their positioning in the category is price. THG's is not.

MM needs his underlings to go and get an education in the field he's paying them a lot of money to get wrong. And if he's the one making the decision on pricing then he needs to go and read some books. Margin and new customer number focus and the city will come back. Clearly double digit revenue growth (growing market share) isn't working.

Reckon £400m mcap is the floor for now. Whether it goes to £350m or £450m in the run-up to results is the big question. If there's a large distressed seller then I doubt they're done. Crazy valuation, but then again MM is doing nothing to help things. Perhaps that's his game now though....

Not the best day. It certainly looks as though bots have got the upper hand. But the continued decrease in share price over a sustained period of time suggests to me that a large player is selling out. If this is the case the sp could conceivably fall to the crazy levels that some have been speaking about e.g. 25p (£350m mcap). No-one thought £1bn, £900m, £800m... would ever fall. And yet the mcap is now bouncing off £400m. Until the seller stops and/or another fund decides to take a serious stake the share price could continue on the same trajectory. If it breaks £400m then I'd sadly £350m is the next stop. I'll be taking another 300k tranche if this occurs.

As many have pointed out there's no known reason for the fall unless everything that's been shared is untrue. MM won't just lose his company, name etc., he would also likely end up in jail. The chances of this being the case I'd say are zero. And Lord whatever the f@ck his name is would be sharing a cell with him, and would also have his name tarnished, and out of pocket 7 figures. Very, very unlikely this is the case. I think there's a better chance there's a persistent seller aided by bots, or it's a short attack in the run up to results. If the latter then you'll see the price spike a couple of days before results. They're absolute bottom feeders these funds.

Company needs to be clear on its cash, debt, net debt and cash burn in the next update. It needs to reassure investors that free cash flow neutral next year is a given. Mgt need to buy more shares. And they need to put their f@cking prices up. The entire city and most PIs think their 'lower than inflation' rises are idiotic, which they are. There is no basis in this being able to grow market share. They need to put them up and make a point of talking about growing their customer base, protecting margins, and cutting costs. We used to put our prices up before every major npd launch or mkt campaign. Guess what, we grew our customer base from the npd / marketing, and supercharged our share of market due to increased customers and prices, resulting in bigger profits. F@cking imbeciles think that cutting costs will grow share when you're not competing on price. It's not like Whey protein is cheap anyway. Anyway, the way this company is being taken down deserves a royal commission. Quite disgusting how funds and journalists are destroying the company and its shareholders. Hopefully a better today tomorrow for everyone. GLA

I think in the next update they need to split out their cash and equivalents from liabilities before providing net debt. I understand there's seasonal ups and down but from what I can tell they're going to be £200-300m in net debt by the end of next year when expected to be broadly fcf neutral. Not too bad providing they're able to demonstrate a tight rein on costs, and can provide confidence that fcf is likely to be positive in 2024. What I can say for sure is their strategy to 'grow market share' by increasing prices at a lower rate than inflation is complete nonsense. They need to get rid of whatever idiot is spouting such cr@p. And if it's MM then he needs to punch himself in the face and do an about turn. This simply never plays out in the real world and there's mountains of evidence to support what I'm saying. Anyone who has worked in brand mgt for long enough knows such things. The only exception is where your entire proposition is based on price competitiveness e.g. Lidl. And even then you don't need to be the cheapest on everything. You just need to be perceived as cheap. But not at the expense of profitability. And from what I can tell they're not competing on price as their sole proposition on anything. So why the f@ck aren't they raising prices in line with costs and even more importantly competitors. And there's absolutely no point increasing prices by 5% when you should be raising by 8% to be profitable. Being a loss leader when it's entirely unnecessary is complete stupidity. And consumers never acknowledge the small differences anyway.

There's probably some f@@l being paid a lot of money to talk such utter rubbish. I'm not invested here yet but have a 300k buy order placed. Looks very oversold. I'll let you guys know if it's filled.

RAH, what are total liabilities and net debt?

I've seen a EURO 600m Term Loan B (maturity December 2026) in the FY21 interim - I'm assuming this has been drawn? It would make sense of the net debt situation given the claimed cash on hand. Can someone confirm?

Bottom line the company need to provide an update on Serenity and future plans. And more importantly they need to give the market some good news. They don't like telling the market about individual Canadian wells, but perhaps it's time they provide some highlights in the next release. If they deliver 24kboepd in the coming few weeks and the growth is driven by 1 or 2 +500bopd then it should be shared. It's material news to investors as it demonstrates how prolific our Canadian acreage happens to be. It will also remind everyone the value in the company is in Canada, and Serenity was always a wild card. If they can't be f@cked doing some publicity and promotion of the Canadian assets and production wins then they deserve to be taken out on the cheap. If an offer of 35p came along tomorrow how many here would take it? Right now they could take my 4.5m shares that's for sure.

Well that was a giant kick in the b@lls for a Monday morning made worse because I had no idea it was coming. They delivered a duster in almost half the expected time required. Makes you wonder where they were drilling on this occasion. Also makes you wonder whether they knew there was quite a lot of risk to this drill, which is why they took on a minnow and stayed relatively quiet on the PR front. Suppose we can get back to business as usual now. I'm happy they rolled the dice with £5m for a potential 100m barrel find. Well worth the effort. Like many on here I'd like them now to exit the Nth Sea and focus solely on Canada where they seem to really know what they're doing.

Near-term SP catalysts imo:
- Clearwater / Simonette drill results. A big well in one of these areas is likely to re-value our portfolio. We need to keep in mind these areas sit more in the 'appraisal' space as we simply don't know what we have in our acreage.
- Strong Q3 production / financials (exiting October @ 24kboepd)
- Strengthening commodity prices
- Dividend hike (unlikely but possible)
- T/O offer. This is an interesting one for me as any company wanting to expand their Nth American production including significant production upside must be looking at us. We're worth 40p all day for a t/o, especially given we carry zero net debt. No offer would come prior to Serenity as it would be rejected out of hand. Now it's out of the way then an offer is far more likely to drop now, especially with sp weakness (sub 30p) to be expected for the next couple of months. We're also an easy t/o because so many shares are concentrated in the hands of a couple of IIs. You only need a bid that convinces two parties and it's likely to pass. And in this market I'd say anything above 35p is likely to be considered favorably. If it's going to happen then pre-Xmas makes the most sense i.e. before they start delivering production gains from the significantly expanded H2 development program.

Anyway, we need to wait a few weeks for Canadian results now. And we get another divi for our time. Not too bad I suppose. AIMHO GLA

Hi guys,

Question for the more well informed on here. What's our current net debt situation? From the most recent interims I have the following
- Net debt / Cash for H1 2022 = -£225.6m
- Net Debt / Cash for H1 2021 = £384.6m

I wanted to double check this is saying what I think it is, which is THG went from £384m net cash position to £225m net debt position in 12 months? The below then makes things even more opaque. Key thing I'm keen to understand is current net debt / Cash position, and recent 6 month cash burn rates. I'll go through prior results presentations this evening but hoping someone can give me a quick and accurate starter for 10.

· Cash on hand of £266m and an undrawn £170m RCF at the period end. A net working capital outflow in H1 is typical, with an additional c.£75m one-off cash investment principally for inventory in the new warehouse facilities and accelerated supplier payments in H1 2022. With seasonal peak trading ahead, H2 2022 is expected to be cash generative as in previous years, with inventory lower at the year-end vs prior year.
· Year-end cash of c.£500m expected, including completion of credit approved three-year term £156m banking facility and non-core freehold asset disposal (£44m)10.
· Following significant investment in its global infrastructure network and through ongoing project delivery efficiencies, the Group anticipates capex in FY 2023 of c.5.0% of revenue.
· The Group therefore remains on track to becoming broadly free cash flow neutral in FY 2023 and significantly free cash flow positive in FY 2024.

The support level that seems to be holding is £450m mcap. Funny how these round numbers are used by the city as targets. Given one never knows what comes next with this company then any sort of weakness will probably test £400m next. Positive news and this can / will rocket. I'm keeping a close eye on THG as it's one of those industry sell-offs where everything growth / digital / retail linked has gotten smashed. THG is all three, and isn't helped by mgt being quite secretive about what sits under the bonnet. But top line released numbers aren't too bad. They just need MM to understand that in an inflationary environment consumers are fine to absorb price rises within reason. I've worked for a number of large companies in their commercial division for many years now and it always surprises me how some are so quick to kill their margin in the belief that volume will drop off a cliff. We'd do all sorts of research (volumetrics) on price increases and it very rarely amounted to a loss in volume in research and in practise. Brands grow with new customers (not repeat purchase). Lots of science and evidence behind this statement but MM clearly has no-one in his commercial or marketing divisions with a decent education in their fields. Answer is to increase prices on all your biggest revenue generators. And then to support the lines with a marketing campaign that reminds current customers why they love the brand / products, whilst appealing to a broad base of potential new customers. Executed well and you'll grow customers, give revenue a real shot in the arm, and bank an increased margin. Shame as it's a very easy fix for someone who knows what they're doing.

WTI looking to break above $90 pre-weekend, which should get some more investment in the sector on Monday morning. If poo continues to strengthen over the next fortnight then we should comfortably break 30p before the big one lands (hopefully). It would certainly help to have poo strengthening and closer to $100 if we turn up 100m barrels. Just 2 weeks to go. Divi hasn't landed yet but will be reinvested immediately when it does. Another 22.5k shares to go into the pile. Have a great w/e all.

No volume today. Should be better tomorrow and Monday given the sp is so low and we get a new dividend to reinvest. I imagine most will take advantage of this before Serenity is announced in less than 2.5 weeks. At least a couple of million incremental shares to be bought in that 48 hour period. Hopefully it will get the party started for the run-up to result. Reckon we break 30p next week. The final week I have no idea what will happen. The market is so f@cking ret@rded we could jump 5p or stay anchored to 30p as traders bank their 10-20% gains. All depends on whether the herd arrive. Shame the company isn't better at PR.

Based on the last trade we should open above 27p and I expect us to then kick higher as traders start to take O&G positions. I'd be surprised if WTI doesn't break $90 this week. And I'll be amazed if we don't break 30p next week. We then have the final week into drill results. If poo is pushing toward $100 and we get a bit of PR coverage / herd awareness then I think low to mid 30's shouldn't be a challenge. It's really down to whether more of the herd arrive in that last week to buy than those who took positions last week and this week taking their +10-20% profits off the table. Still quite low volume given what's about to be released, but good to see a +5m day all the same. Hopefully a few +10m days over the 2.5 weeks. AIMHO GLA

Jesus OPEC has just cut by 2mbopd. Market hasn't quite woken up to this but poo is going +$100 this year. Prices will go through the roof given there's a net increase in oil demand due to gas substitution, China Covid re-opening, and the US no longer feeding the market with 1mbopd from early December. The Russia price cap will only make things worse if US / EU go through with it. I'm amazed the market cannot foresee such things. If someone gave me £1m tomorrow I'd exclusively invest it in O&G players. The rest of the market is f@cked.

Tony, yes that's a wonderful backstop. If they don't prove up commercial oil I think we'll sink to the low/mid 20's but then rise back to the high 20's on the back of the Q3 update. Another quarter of results and we'll be back in the 30's due to poo and gas being much higher than now. As I've been saying, this is a free drill all the way up to the mid-30's. And we get paid a monthly divi while we wait a month or two for the sp to recover in the event of a Nth Sea duster.

I'm going with 30p by the end of next week, and up to 35p by the end of the following week just before we get news. AIMHO GLA

Correct Tony. You sell too early or late and it can cost 6 figures in missed capital gain. Not that I'll be complaining mind. I'm looking to cash out around 1/3rd of my holding on success. The divi, high chances of a full / partial sale, and constantly increasing production will keep me here for the longer term.

Thanks Tony, I'll take a look. I personally think anything above $10 is crazy unless they're producing assets in a +$65 oil environment. It's more about 2p reserves, which are clearly difficult to value when you look at 88e and their f@cked up valuation at early stage exploration / appraisal resources just 6 months ago. I personally think $2 per barrel is our base valuation given our oil API (light sweet crude), close proximity to infrastructure, company cash position / generation, and supportive macro and political environments. But whether the market goes further with $3-5 is the big question. One of the great things about this appraisal well is if they prove up a commercial field that is smaller e.g. 25-50m barrels, then it can be brought online much quicker and at very low cost via Bleo Holm. I imagine it would also be more attractive to Repsol as it would make the economics of their Blake field much more favorable, without them having to break the bank. The could pretty much tag this development onto Blake. So in this case the 2P valuation could be higher. All in all, providing the field is commercial I think the 2P valuation is going to be more attractive than the benchmark $2 for non-producing assets. Looks like volume is starting to pick up now as well. So f@cking exciting to be invested here over the next few weeks. AIMHO GLA

Poo and gas only going one way in the coming weeks / months. OPEC can light a fire under it this week. Even a 1mbopd cut and WTI is likely to jump back to the $90's. If this happens and we prove up a significant amount of oil in Serenity then we're all going to make a lot of money here in a couple of weeks. I'd be amazed if poo isn't above $100 by Xmas. Gas will be at eye watering levels, especially since governments are picking up the tab.

Does anyone have a reliable industry measure on how to value 2P reserves? I've heard $2, but imagine this also has a lot to do with how much is required to extract the oil, and how much money the company has to do so. Given we're so close to infrastructure I imagine our cost and time frame to monetize will be quite short, especially with a government falling over itself to approve O&G field development. There's also the fact we're throwing off buckets of cash at the moment. And the fact that 90% of any development costs are given back in tax breaks. It really is a perfect storm for the Nth Sea. There's also the fact that bigger fish will be looking at fields such as Serenity to develop to minimize their current and future tax liabilities. Anything above 50m barrels and I think we're safely into the 40's. If they hit 100m barrels then I'm going with 50's and maybe 60's. Just 2.5 weeks to go people.