Member Info for GoCPI

GoCPI what is your valuation of THG Beauty and if under the final value x3 to x11 Sector consensus give examples - good luck with that. - Given no growth in 2023, and Mouldy at the top, and the tie-in to Ingenuity, you'd be silly to pay more than 1 to 1.5x revs for Beauty. If the business gets back on the growth trajectory, then there is a case for a slightly higher valuation and possibly more if its is listed in the US. It's all hypothetical as our lazy CEO can't be bothered with listing across the pond as he then constantly needs to put out full financial updates/forecasts every quarter.

@Pearls - "This is one of many shares - including for example: SFOR, ASC, DARK etc that are heavily influenced by the current interest rates cycle"

I think this is correct. I have holdings here, SFOR, SYNT, CPI - the first 3 are probably more interest rate sensitive than CPI, but a rate cut will help just about every company indirectly. After the hot NFP number today across the pond, its likely that the Fed cut will now likely be in May or June, but I[m hoping against hope that the BOE will cut in March, but they vassals of the Fed and likely to wait till May to cut. We'll probably be rangebound here, unless Mad Mouldy pulls a rabbit out of the hat.

Word on CNBC in an interview with a sellside analyst that Meta is driven a lot more efficiencies and ROI improvement (for advertisers) in the digital advertising space via integrating AI in pretty much everything they do. That is probably a blueprint for SFOR in 2024/25 in terms of how they can generate revenue and profitability growth, and we're already well progressed on that path, more so than WPP ;-)

@Crafty - what revenue multiples have you seen for beauty business acquisitions in 2023, after that growth bubble properly burst? That is a more pertinent question than what happened with acquisitions in 2022 and prior when growth was still running OK, if not great. I could see that Aesop came in at 5x and Naturium at 4x EV/Rev multiples - a couple of good sized acquisitions with Naturium coming in later in the year. Were these still growing business - I think so from what I've seen online. Of course, these companies don't have Mad Mouldy as their CEO and they aren't tied into using Ingenuity for fulfillment - these are key drivers for market value compression. ;-)

FFS, Crafty. This was done at a 3.85x revenue multiple in 2021 (at the peak of the tech bubble), not a 40x revenue multiple. No, THG isn't in a growth phase at this time and doesn't deserve a big revenue multiple - let's first see THG get to a good revenue growth clip this year before unfolding our wings of valuation fantasy?

"What pump? Have I missed something?"

Nope. Either his/her fantasy or likely a Dementia sufferer and thinks Rockhopper is S4 Capital? Bizarre!!!

That was spot on, Lordeh. :-)

@Sharehead - The only thing I personally need to agree with in the medium/long term is the market, and for 4 years that I've known Capita, the market has been telling us that we're shiite. I as a shareholder don't need your agreement/disagreement - I/we just need Capita to execute well operationally, generate plenty of cash/profits on a sustainable basis. We then need the market to agree that this what it needs to rerate the stock - everything else is still noise. 😊

Good luck.

From the market's viewpoint, only substantial cash generation will do the trick and everything else is noise. Every outsourcer I know of has AI embedded into their service - it's just not a USP to Capita and without jumping on that buzzword bandwagon, it may not be that easy to win contracts. The reality is that we're still a 'show me' stock - we can only hope that finally changes in March when AH has his first opportunity to leave a mark.

Sharehead - the key takeaway from these SP jumps is the management had laser focus on cost control, laid off large numbers of employees when they realised they'd overhired and looked for growth opportunities and focused on delivering them. This is why you'd get these multi-bagging stock movements. CPI has been a perennial disappointment since forever, more so since Feb 2020 and JL's woke management style without real substance didn't just cut it.

The way for CPI to double/triple from these levels is for AH to show the same laser focus that Zuck gave at Meta and show they can deliver higher margins from operations and ensure cash flow can be thrown out sustainably. More job cuts in Europe ARE needed, IMO. FY 23 results are Pásse and I can't see much good in them, but its what AH guides to in 2024 on the back of more cost cuts, that's what will set the tone for stock price. We can only keep our fingers crossed that he'll surprise us!! If he doesn't, we'll be relegated to a perma-dog status by the City.

OT - but Meta had a stupendous beat with their Q4 results release a few minutes ago. Stock's at an all-time high at 440 after-hours and a first dividend to boot.

When would AH be in a position to do a dividend announcement, I wonder? That's the key step that should push SP up and away on a different trajectory. Try not to disappoint us, AH. ;-)

BT has a debt problem hanging over it . £20bill debt in a high interest environment is never good for EBITDA/earnings. The shallowness of the British stock markets are probably another factor. Let the rate cuts start and a company like BT's stock should benefit. Time to open a position there for the dividend yield, knowing rates are coming down, in May at the latest?

The cuts should help THG too, even if Mad Moudly doesn't!!!

'News' out on my IG notifications that Israel has agreed to a ceasefire with Hamas (Qatar came out with this). Oil's falling, a couple of US listed container shipping companies that I follow closely (and used to own) are falling sharply on the expectation of lower container rates as the Houthis pull back from attacks in the Red Sea. If this sticks, that's broadly good for the lower inflation story = rate cuts. 🤑🤞

I'd say nothing wrong with what Kipper9 posted. I'd have loved to be in Meta and stayed there, did a trade in the low 100s did a couple of grand and walked, and been kicking myself since. Zuck pivoted quickly once he realised he over-hired and was overspending and made large cuts, and found ways to grow revenues/margins, and the US market rewarded him. JL has done nothing of that sort and couldn't even bring himself around to doing meaningful job cuts till he was almost out of Capita as CEO, and I suggest that too with a nod from AH. Good riddance to JL. I'll see what AH comes out with in about 5 weeks' time and I'll be happy to sell a good chunk of my holdings if he turns out to be another damp squib like JL.

For all the talk of AI and partnership with MSFT on here, those are meaningless if CPI can't generate much more than the 6% EBITDA margins like JL and TW have forever been forecasting - that is the only way CPI is going to break out above the 55p resistance levels. Capita needs a radical redo and I can only hope that AH is up to the task.

A near 5% fall today on about 300k shares traded (prior to UT)...crikey. Accumulation time it is!!!

@Auson - a May cut is pretty likely, IMO, unless the NFP data shows weakness - there are couple of releases prior to the March meeting and if they're weak and if CPI/PCE stats are co-operating, there's a chance of a March cut. My take is that the market believes that JP (or other Fed officials) can't predict how data will come in over the next month and hence it's assigning a small probability of a March cut in the event of labour market weakness. All things being equal though, a March cut is not in the cards, but a May cut is a high probability event.

A bit of froth coming off the US market is pretty good. I suggest we need another 5% or so correction in the next few weeks on the Dow/S&P - that hot rally of circa 20% over just the past 3 months on speculation of a March cut and 5 more cuts in 2024 is not healthy. This is all playing out as it should - however, if the NFP report on Friday and in early March are weaker than expected, JP will have to go in March. Either way, a May cut should be a shoo-in.

Smoke and mirrors indeed. He only pledged that profits from his THG Property company (holding company) would be paid to charities, not gross rent proceeds. And that was after sprinkling of financial fairy dust, per FT's writer. :-) THG never received cash for transferring these hard assets into Moudly's holding company and that's another City gripe. It's only fair that these questions are asked of Mouldy but don't expect clear answers though.

https://www.theguardian.com/business/2021/apr/15/the-hut-group-ceo-donates-100m-to-charitable-foundation

https://www.ft.com/content/63668713-c1b1-49e9-9108-800bd9c79e97

Spot on, JW. I feel for poor LOTM though - selling out at all-time lows just when many signs are emerging that the global manufacturing economy is turning, aided by expected rate cuts from both the Fed and the BOE (hopefully) in the next 12 weeks. One of my 5 UK investments that should see a big breakout in 2024, IMO. DYOR though.

On the back of rather benign inflation data today across the pond, March rate cut probability is up at over 60% from 40% yesterday. The guidance/commentary from JP will be very telling, but we could now see a March cut. The higher shipping costs because of the Red Sea attacks could be a wild card and the Fed may decide to wait till May, but either way a US cut is coming within the next 3 months.

Companies put off spending for sales growth last year as most CEOs were convinced there was a US recession incoming in 2023, but that was a false alarm and US grew 2.5% last year. The consumer is still going strong with PCE up near 3% in Q4, with govt also contributing strongly and even private investment was up 2%. All good signs for 2024 as rates are cut and the ad market will come back too. SFOR has the added advantage of getting a large % of revenues from the US. ALl to play for here, IMO.