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Asos is berlin and Atlanta. Next is just U.K. as you say
My point is THG needs localised facilities. The last vocal update we had mentioned how Aus was firing on all cylinders from the new warehouse
My point is that rather than taking a warehouse of size X we are taking a warehouse which is x multiplied by 5 and then kitted out with expensive add on like refrigeration etc
MyProtein alone wouldnât need all that but atm MyProtein is paying for all of it as ingenuity doesnât pull its weight
If ingenuity (the dream element so everyone is clear) then MyProtein could scale into smaller warehouses save huge costs and get to a higher margin
Then the compset comparison is easier and equally highly valued. It would also take most of the capex need off the table so nutrition could focus on more manufacturing for example asia which is desperately needed but canât be afford until the medium term
Donât forget next sell sofas, ornaments and all sorts so if they want to shift protein powder or health drinks it would be no different to them
Obviously they already do make up
So this is my point. MyProtein, alone without the cash drains should be near glanbia. So go for that
But my point is if next wanted to sell that âplatformâ to third parties they can. Thatâs how ingenuity was born. It wasnât conceived as a platform for third parties like shopify. It was largely Matt going âhey we could actually sell the platform as wellâ
This is the same as next. They can now sell their platform if they so choose. Same with Asos who as I said are also following suit
This is my point. There are loads out there and we ainât winning so cut ingenuity (the pipe dream element to be clear) and just be what glanbia is. On that valuation and a far more profitable business weâd be all very very happy
Just to be clear Asos is launching an ingenuity for small clothing brands
https://asos-12954-s3.s3.eu-west-2.amazonaws.com/files/6416/3671/6352/ASOS_Plc_Capital_Markets_Day_2021.pdf
Pages 49 to 51
Next also has been doing this via its total platform
So why do we think ingenuity (other than the name) is something no one else has?
Fitch is referring to the high barrier to create an ingenuity. I agree but we live in a world where there are several so we donât need an eight competitor
This is why you see churn so high for THG as there are alternatives
At Steve Scott I donât disagree creating a new ingenuity is very difficult but the point is several of them exist
If I want to sell online I can choose shopify, Amazon, global-e etc etc
Thereâs loads of these alternatives. Iâm not saying ingenuity doesnât work my point is why run it if itâs losing money?
There are two nutrition businesses out there worth billions. They donât have or need huge warehousing or tech. THG built those to monitise and it hasnât happened. If we cut off the cash burning element why wonât MyProtein be worth what glanbia is?
The issue holding this business back is the insanely high fixed cost base which is based on a dream thatâs not materialised
Asos and boohoo both have distribution and fufilment!
Asos has warehouses in Europe and America the same as THG both also have content creation, smaller but they have it and even so thatâs not a huge moat as getting content created isnât hard there are thousands of companies that can do that and itâs not needed under one roof
Product creation is only for beauty products and some nutrition bars. And these arenât in the ingenuity revenue lines anyway they come under beauty and nutrition
Web expertise. Asos has as many data scientists as THG
The platform of taking an online order and putting a parcel in someoneâs hands is hard but there are hundreds of way available. Ingenuity is just one
Content revenues are minuscule for THG and they arenât even included in the commerce revenue line so again a point made thatâs not well understood on here
There was also a small cover in Shares magazine just noting that investors are largely spooked over leverage
Penny must have dropped with management now and the focus to be on cash generation
Stevescott ingenuity is just a name for the back office system. I havenât said sell everything such that nutrition doesnât operate
Everyone has an âingenuityâ Asos has it, boohoo has it etc etc or you can buy it all from shopify
Your point is being pedantic as itâs obvious the conversation is about commerce. I referenced it later in the comment and also when I said âingenuityâ I was referring to the client wins noting in RNS which were all commerce
For example I havenât explicitly said âkeep an accounting functionâ but I think the fact that basic items for nutrition to function is what I was meaning
But ingenuity isnât anything different to what other businesses have other than itâs THG built in-house version vs others which are 3rd party or a blend
But donât be pedantic. Youâre better than that and it adds no value to the board just turns of wasted comments
Saying the drop is from retail investors. Does make sense as we havenât seen any RNS
It would be good to see a fund step in and start buying otherwise this will be taken off the market
The board will need access to capital and at this price they wonât be able to
It gets too hard to read as lots of people keep responding in the wrong threads
But on ingenuity THG reported wins BEFORE go lives hence why some websites shouted about never happened (vimto and GSK)
Also moulding never said some brands donât want them shouting stuff and the NDA point is mute also as THG websites all say âTHG ingenuityâ at the bottom so they are in the public domain
Ingenuity is a flop we need to bail out of it asap
Mando sorry auto correct!
Yes Oke sell beauty and all these massive warehouses. Go and then get smaller and cheaper ones. Just be a MyProtein business with a far lower cost base
Glanbia is worth a few billion so just go for that
Sb ingenuity has always been very vocal with its marketing of case studies so why would it not be showcasing great clients win others?
Also prior to oct-21 update every update did come with a very detailed ingenuity commerce pipeline update of customers, what we were doing for them and contract lenght
Mando how does it scale into cash generation?
Ingenuity isnât growing. Beauty, excluding acquisitions isnt growing. Nutrition is cash generative at this whey price but what if it flips again over summer?
When this business re-fis it wonât be at the low interest rates at ipo
Where is this scaling coming from?
How come shopify signs them up weekly and monthly?
How about global-e who add huge clients all the time?
Stop saying nice paragraphs because they should good. Where is your support for any of this?
Matt has promised whales for 18months and weâve only had Matalan which looks like a commerce client
Canary I also am a SOTP. So what are your SOTP calcs?
DCF is the best valuation method to use and therefore itâs about cashflow not revenues
For beauty margins
Dermstore was $180m of sales and $4 Adj EBITDA
Cult Beauty was ÂŁ140m and ÂŁ10m EBITDA
So you can see the margins are really thin. Which therefore means itâs not really adding cash generation for the huge warehousing
If beauty goes and the warehouses scaled back MyProtein could be the Mcap of Optimum Nutrition owner
At that point weâd all be happy and have a business thatâs cash generative
Sell beauty is the way to go
Do you know what THg does for coke? Itâs only domestic delivery (I use it and itâs great) and personalised cans
But look at the Plc results for coke European partners itâs such a small part of their business they donât report it
Also why havenât they taken it to other European markets yet?
Also again all these clients listed have been here for last 18 months where are the new ones if itâs so good?
Matalan the only material account added
And canary donât forget THG is nil margin on warehousing so that millions of units number you quote sounds great but why if it doesnât make any money?
On beauty what margin is dermstore? And cult?
@oculus - what margin was Dermstore? What margin was Cult? What margin is Space NK?
When you retail beauty online the margin are razor thin. Why else hasn't THG told us what margin Lookfantastic makes? Look at the IPO document and the margin for Glossybox it leaves hardly anything for the other parts of the beauty division
What evidence are you basing your statement?
On Ingenuity, again what are you basis this on? It isn't growing anymore (possibly backwards now) and why are you just considering capex. Do operating costs not exist? Seems a pretty big part of the puzzle to just miss out
Nutrition can't be valued alone as it's tied to two other businesses which between them result in negative FCF, even before capex (hence why you can't just skip op ex costs)
Just scale back massively. Look at Optimum Nutrition owner, doesn't need all that warehousing and if we kill ingenuity dream neither do we
Thereâs a reason I think we havenât had the three divisions and thatâs
1) beauty is not that profitable
2) ingenuity is a mess
3) nutrition make most of the cash but thatâs been hit this year
For me the only option is sell nutrition and warehouses and pretty much start again as a smaller nutrition company
MyProtein alone could be worth billions its the other cash pits that are the issue
When lot went short. I wouldnât say those that gave ÂŁ1.4 billion at the ipo were short, would you?