Member Info for Hosai

"Sidara, a privately held network of engineering and design companies run from the UAE, was keen to move quickly to ensure it could retain senior and mid-ranking Wood staff who have been angered by the company’s plight and its decision to cut bonuses, according to the people with knowledge of the talks. The people did not disclose the terms of a potential deal."

Https://www.ft.com/content/e95b2a80-dd85-4163-bd76-3b316670d981

"Can you define cheap valuation?"

0.3-0.4x EBITDA multiple is extremely cheap, hence my statement that one couldn't expect to wait for all risks to go then buy down here.

"5) Hostile takeover or activist shareholder - possible, but common sense say, its very unlikely before the completion of Deloitte's review. Also, if the company will do a rights issue, shares will depress further at that time, and makes more sense to wait for a better opportunity. Also, from a takeover perspective, there is relatively little value looking at market cap now, when the debt forms such a significant portion in the enterprise value."

The share price would rise in this instance, even with a rights issue (at-least fairly soon afterwards). One can't wait for all the risks to go then still expect to buy the company at a very cheap share price.

Not sure why would would say nonsense, it's fairly common for companies to be more likely to have the "threat" of a takeover if the sp has fallen significantly. Both because it's cheaper and that the investors are softened up to accept lower than they would have.

"They have plenty of time to sort out debt ..it has only become an issue because of the terrible presentation from the CEO ..where he was clearly not going to give any answers . He probably is wary of saying"

Tbf would it be normal for a CEO to give solid 'answers' if such a thing hadn't been agreed/fully signed off with the lenders yet?

"Ask yourself why the share price is at these levels? If the funding is secured the stock will rally strongly"

Share prices often don't make sense, if everything was valued correctly there would never be such thing as a bargain (for longs or shorts).

Funding also wasn't secured on 13th Feb at 65p a share, nor on 6th November 2024 at 124p a share.

It's always foolish to try and predict short term sp movements but I would be surpirsed if sp reacted too badly (even though normally a CFO resigning would cause that) because the news isn't that surprising in the context of things with the update on monday actually saying - "The Company is initiating steps to strengthen significantly the Group’s financial culture, governance and controls in light of material identified weaknesses and failures". Whether or not it was already decided the CFO was to go at this point is not clear but I feel he was prob on extremely thin ice.

Yes but Barclays have still decided to take on the risk/reward here even if its a swap. One can speculate that they have some other offsetting instruments somewhere against this but no more so than speculating that Fidelity may also have offsetting instruments that make them profit if it rises despite then selling their shares.

"I really don't think it works like that as the whole purpose of a swap is not to lose ownership of the underlying asset, but to transfer some of the risk. Fidelity ditched them.

JP Morgan offered a basket of similar cash equity swaps following the November crash.

Also highly unlikely Barclays are exposing themselves to huge risk either way. Contract terms can be extremely varied plus likely to have another financial product somewhere to hedge against the any worst case scenario."

So you think the risk has been transferred to no-one? Barclays have taken on the risk/reward therefore it's similar to a buy from them arguably.

"(c) clarity on refinancing options needed first"

If they wait for this the sp likely will have gone up and they'd have to put in a higher bid. Can't wait for all risk to go away and then expect to still aquire the company for cheaper than SOTP.

Market has already priced in a crap CFO, plus Deloitte whilst still doing review seem to be in agreement with the key part of the latest figures:

Independent review ('Review')

· The Review is continuing and Deloitte's work and assessment will need to be complete before any conclusions can be reached. However, significant work has been undertaken and based on that:

o The Company does not expect that the findings of the Review will have a material impact on the Group's cash position or its ability to generate cash in the future

o Following provisional indications from the Review, the Company is evaluating the extent of prior year adjustments which the Company expects will be required in relation to the Projects business unit and their impact on previously reported adjusted EBITDA for FY23 and any prior periods

o The Company is initiating steps to strengthen significantly the Group's financial culture, governance and controls in light of material identified weaknesses and failures

As far as I understand Barclays benefit if it goes up and lose out if goes down though? Meanwhile the client receives a fixed fee from them but is no longer exposed to up or down while swap in place?

Kando Fitch have the same credit rating for Ocado who have a £6.69 billion market cap verses THG - £900 million odd.

Great Post Plutos. The question marks over ingenuity have made me wonder about a mbo also for a while. Matt m for all his criticism was previously a chareted accountant so is no fool when it comes to the finances. He must see what we are seeing in terms of the question and financial projections over whether the ingenuity investment will be worth it long term. Maybe he's not bothering to big it up or justify it because it may suit him for sp to be subdued before a mbo?

Don't get how MM can apparently have just rejected a bid for nutrition at multiples of the market cap without asking shareholders or even properly rnsing to say rejected? Clearly that would have made sp go up significantly.

I must admit I had sold a portion of my shares a few months back to explore some other opportunities but bought back yest thinking surely it can't tank yet again after results and actually thought we'd have a good day. My timing was fairly bad to say the least but am now locked in heavily again. Still bullish on nutrition especially as that aspect is so undervalued but sceptical on ingenuity. I could be persuaded on it if matt m pushed it more but he doesn't, it's more it comes across that the spending in ingenuity is inevitable with no question on pivoting away from it yet the case for it doesn't seem to have been properly made as something that will be worth the years of investment.

Get rid of ingenuity spending and I feel the sp could currently be £2 at least.

The biggest confusing aspect is ingenuity commerce. It seems weird to put so much into it without spelling out the reward down the line. Ocado is valued at £6.3 billion and forecast to be 5 years from being cash flow positive (a lot longer than THG as a whole who predict next year but similar to ingenuity prediction). However with Ocado there is arguably a more solid financial expectation once that comes about, for ingenuity Matt doesn't seem to really big up what it will eventually be in terms of the finances etc?

IF you get rid of ingenuity spend the nutrition/beauty would look a lot better and be valued way higher than here.

Lauren Brindley ex vice president at Walgreens seems a great appointment. Makes sense as Rev B makes most of its sales in USA.

Looking much better

It's fairly clear Adam M is still very proud of revolution. In this post he is congratulating his son for his time working there - "So proud to have had you part of the Revolution. What a product developer you became, “the products we develop are everything to our consumers”, and a so much loved member of every team x"

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