Member Info for guird

Wild tiger, fair play on your profit , interested when would you look at closing , surely the down side is very limited from here , I was surprised to see professional shorts increasing yesterday

Unbelievable, shorts increased yesterday

I think we will see the shorts reduced today , will take a day or two to announce I expect

There it is 27.90 finish

This has been said before and I will say it again , Sales are irrelevant if you can not convert it into cash and pay dividends or invest in significant growth , the overall cost structure of this business is a concern , it has to service debt, pay delivery costs, pay rent for offices , the later two to a now private ingenuity on a long term contract that we don’t have visibility of , unless these costs can be controlled and reduced the difference in valuation will remain , ultimately THG drove sales , a % of these would have been loss making due to delivery costs , they need to rebase the business to delivery bottom line profit and cash , this may mean more decline in sales which if it drives higher cash deliver is not a bad thing , cash remains king in the valuation of a business like this , also remember the valuation is the market capitalisation and then include the debt , APN is dept free and throwing off cash , there is value at the share price but it does not help the long term holders

I’m sure I read it was 5 years

A couple of points , whey price is a distraction , you have to price accordingly and maintain margin , it’s the basic principle of business unless you want to drive market share if your competitors are taking price increases , we are not gaining share and not pricing , crazy

The key issue re takeover , it will not happen as the contract with the now private Ingenuity will lock the businesses to ingenuity for 5 years , the price increases will be built in etc and possibly penalties if volumes are not delivered , it’s therefore impossible for any buyer to exact value , this was a very clever move.

The only way the share price will increase is based on sales growth and profitability, then we could be looking at a very different valuation

Looks like in auction , no live quotes

The market value is not less than turnover , they are profit making and have state of the art new production facilities and no debt , at this value there is little downside , the issue is always any takeout price will be low compared to historic share price

Givaudan or Symrise , both extremely large favour / fragrance companies and Treat’s will supply them with specialist ingredients to make final flavours and fragrances, it will not be a drinks company’s

This was such a well ran little business , the valuation got way ahead of itself in 2021/22 , peaked close to £13, now under valued, I think it will be taken out by one the large flavour / fragrance houses , very sad news

I agree the valuation is low but you need to include the debt, APN has no debt and a superior margin and valued at 300m , THG has a lot lower margin and is valued at just over 400m with about 500 debt , therefore is valued close to 900m in terms of book value when debt is considered

Yes you are correct , remember the share price will drop on the 10th by the dividend amount , the ex dividend date, so in reality it makes little difference , you are better just looking at the daily price movement and deciding when to sell , or sell in parts

This is not true automatic entry is at 530m , that’s because automatic entry needs to be a market cap above the bottom 25 companies in the ft250 , this is to stop company’s constantly moving in and out each quarter , review date is the 21st, see https://www.stockchallenge.co.uk/ftse.php

Have you read the agreement, it’s a joint venture , win /win

Key terms of the License Agreement are as follows:

- Long-term agreement with option to extend subject to achievement of certain performance targets.

- Joint governance committee will manage and oversee key aspects of the strategic partnership.

- Profit-sharing arrangement, distributed via royalty payments made from Molson Coors to Fever-Tree.

- A proportion of the annual profits attributable to Fever-Tree are guaranteed for the period from 2026 - 2030 based on an agreed business plan.

- Both parties agree to substantial marketing investment to be deployed over the initial period of the partnership.

- Non-compete terms on both parties.

Automatic entry is 530m currently

Very difficult to give a number , what would be better is a bid from the outside , this would force MM hand, remember without THG the private Ingenuity would be at huge risk once the contracts expire, likely to be 5 year lock-in, even so it would force MM to bid as the risk would be so high , if only MM offers I feel they could take this out in the 60’s or 70’s which would be criminal

Back to content discussion, does anyone know the revenue split for beauty of brands owned by THG and then other branded goods they sell for other companies

The Group's existing debt facilities will stay with RemainCo, namely the €600m term loan B, the £137m term loan A and the undrawn £170m revolving credit facility., this is from the demerger document, where’s the 600m loan B , I think net debt could be higher ?

It’s also a little misleading to call it cash , as it’s a loan , they have net debt on the balance sheet