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In Corporate Parlance....

It looks like Capita is taking its cost cut mantra very seriously. Mark Bellingham, the UK Managing Director for Capita Experience is leaving (let go in another parlance) and I suspect that the other Managing Director hire in 2022 who was the chief growth officer for Experience responsible for all European markets must've taken on that role. I always wondered if CPI Experience really needed 2 MDs at a UK/European level, and I guess we know the answer.

https://www.linkedin.com/feed/update/urn:li:activity:7141365496523755521/

I suspect that could be a circa £300k saving with just that role elimination. And that's a sign of things to come and all to play for here, IMO.

Lol, Anacott. Great analysis - your skills are legendary.

Schoolboy error as I was looking at Nutrition sales - Doh!!

Crafty - in your post you quote that Mouldy states that THG is valued at 0.2x Sales. I can't see which hat he pulled that metric from as THG had sales of £675 mill in 2022 (£660 mill in 2021) and today's market cap is £500 million in early Q3 2022 and that's a straight 0.75x multiple. It's not like THG is generating £2.5 billion annual sales for it to be valued at a 0.2x sales multiple.

Maybe Mouldy should stop shooting numbers from his hip and focus on cleaning up governance within the company, actually deliver what he promises to the market (strategy for unlocking value and growing revenues). That will benefit us all no doubt?

@Crafty - I'll pick up on your first post addressed to me and respond to your points. You bring up growth rates of 84% and 45% for beauty and nutrition since IPO and how if so the share price is down 90% from the peak. There are a few explanations for this, IMO.

Growth rates - Revenues were growing rapidly in the first couple of years in the post-pandemic era (2020/2021) for all sorts of e-commerce business and valuations were sky-high across both sides of the atlantic for e-commerce stocks and broad tech in general. This was all fuelled by the post-pandemic QE as well as fiscal stimulus unleashed by developed nations across the board during 2020. If you were to spend a bit more time and do a year on year comparison of revenue growth, you'll see almost all of that in 2020/21. What's happened in 2022 and 2023 were shiite revenue run rates across the board for THG. Quarter after quarter, update after update from the back end of 2021 onwards was a disaster.

And all of this was reflected in the share price getting hammered to the 40p levels in 2022. THG was valued as a growth company and when that growth disappeared, the sales multiple valuation crashed and we got to where we got to.

You back that up with £1.2 billion of goodwill + Intangibles sitting on the assets side of the balance sheet, ostensibly as a result of high-price acquisitions and who knows how much that's realy worth as beauty assets have tanked across the board as demand cratered.

And you finally throw in the multitude of Governance concerns in the market about Mouldy Matt, THG isn't attracting a wider investor base. Bring all these together and you can start to form a picture as to why THG is valued as it is on the market.

What would I like to see in 2024 - something much more than the disingenous 0% to -5% sales growth that will be seen in 2023. The Market will not tolerate another year of negative growth and particularly if there's no recession in the UK. FCF as a whole across THG should follow as Mouldy Matt has already stated most of Ingenuity capex is out of the way, but the scale of cash that Ingenuity will continue to suck out of the business prior to that division generating FCF is still to be seen. Let's see what we hear from Mouldy in the upcoming update - what's happened in 2023 is almost irrelevant at this time, it's what the management really projects for 2024 for revenue growth/EBITDA/FCF generation - that's key.

@Crafty - I'll pick up on your first post addressed to me and respond to your points. You bring up growth rates of 84% and 45% for beauty and nutrition since IPO and how if so the share price is down 90% from the peak. There are a few explanations for this, IMO.

1. rowth rates

I can't see AH's start do anything to the SP on the day. The market knows he's coming and that's digested/reflected in the SP. It's what he does after he comes on board that matters more to the market. IF he can cut more costs and take the EBITDA to Revs up closer to 7 or 8%, that'll be a great outcome. I suspect we may have to wait till the March update for additional news, but we'll be pleasantly surprised if we get to hear something in the coming weeks.

ISM Services was weaker than expected, and one of the 3 components of Factory orders was even in Contraction territory. That's pushed down yields and et voila, we have indexes turning higher.

#Goldilocks

The answer to this Rhetorical question depends on whether the company in question is a Growth company OR a mature company with minimal growth prospects.

If its a 'Growth' company like THG, you wouldn't want them to miss on growth numbers - the market will punish you, as it has been consistently doing since 2022.

No fan of Biden as well. Don't the republicans have anyone better than Dodgy Don and they would be well on their way to winning? Too many numpties over on that side of the Atlantic.

The December US NFP came in hotter than expected at a headline level. The numbers are higher at 210k versus 170k expected, yields popped up a bit. Wage growth at 4.1%. What that currently means is that US may not yet start cuts in March, possibly May? BOE may follow too in May. my wager is that we can pencil in 4 to 5 cuts in 2024.

I can't predict what can happen to THG's SP in the near term as a result of this slight shift in rate cut expectations to a bit more hawkish stance, but the upside is that the economy will still continue to grow. I just hope that the BOE does come through with a cut in May as inflation drops in the coming 4 months.

We all need a bit of a break after a dour 2022/2023.

The Apollo bid wouldn't be fake. What's fake/fantasy is the dreamt-up bid price/valuations being bandied about on this board by Mouldy's acolytes.

OK, the fake bid from Belerion for £1.70 in 2022 was rejected, and since then MacDaddy's been rewarded with his continuing to be on the board. Apollo's bid price was never made public and only Messiah Mouldy's acolytes would think they'd offer anything more than 150% premium (very generous) to the 60 to 65p share price in April prior to the bid. And this was at a time when cost of capital was rising as the BOE/Fed were on a rate-hike spree. Even a cash generating business like Hotel Chocolat only got that much premium. Fantasy reigns easy on these boards though!!!

THG has no positive FCF generation to speak of and Messiah Mouldy can't (yet) forecast what next year's FCF could be, let alone what the next 5 to 10 years FCF could be and so DCF valuation is moot. EBITDA mulitple is a valid metric, but given their sales growth in 2022 was low single-digits and 2023 will be negative, and 2024 is in the lap of the Messiah, I can't see what a realistic price/sales multiple could be. Maybe 2 to 2.5 times.

Given all the Friggin governance issues at THG, the market deems that nothing more than 2 times is in order and that's where we are and have been, barring the time when there was the Apollo bid propping the SP up. Sure the SP can swing a few % points either direction of the equilibrium point, but until something changes either on the growth front or the governance front (a new corporate strategy unveiling included) or a new bid, we'll be range-bound.

Go on Mouldy Matt, show your acolytes that you're at least partially worthy of their daily adulations on this board!!

Gotreal - how, in your opinion, are companies like these valued?

And cloud cuckooland is just in my backyard! I can also see plenty of Mouldy's acolytes out there singing his hymns.

"A disappointing q4 update. Coupled with statements such as “we smashed it”, promises of jam tomorrow, etc. MM will, no doubt, blame everyone but himself for the poor performance in the sp, hint that he’s going to do something about, carry on as normal."

B1nky - I'm not pessimistic and hence I've been adding in the fall this week. All that Mouldy Matt needs to do is deliver a small revenue growth (which he said was on the cards per the last update), talk about green shoots in the business with inflation abating and provide EBITDA/FCF guidance for 2024. Maybe, just maybe, then we'll see a sustained move above 100p in the coming months. And an updated corporate strategy with a keen eye on improving governance further will help - maybe I'm dreaming and Mouldy Matt's hubris will just not allow these to happen, :-)

"In my view, the US markets are far worse when it comes to algo trading. The main benefit is that they ascribe a higher value for early-stage tech companies than the UK markets does. But if a company consistently misses its guidance or does not deliver, they are no more forgiving than anywhere else. It's not a panacea for THG, but has its advantages."

This!!! Cheers, Novice82. This is exactly why THG's SP is floundering where it is. The September update with the revenue growth guidance of between 0 and -5% is epitome of ineptitude from the Messiah and his IR team. Get that house in order, get revenues and EBITDA growth back on the agenda and market will have your back. I'm not denying that the UK market broadly has some issues resulting in lower valuations, and from reports that's in the circa 20% range and maybe a bit higher for small/mid caps. But expecting valuations to jump and take THG to double of where it is now, without a fundamental change in THG's business/growth trajectory, is just the pumpers' pipe-dream.

Maybe Mouldy Matt will surprise us with the upcoming update and I'm keeping my fingers crossed with my feet firmly grounded!!

"She and her fellow pumpers were on here proclaiming you had nothing to LOSE by buying at 87p just before the NY"