Member Info for Hosai

It didn't exactly say "would be" just that they were working towards and obviously "near term" was always quite vague but lets hope for the best.

I did notice this section in rns - "We are determined to be better at everything we do, and part of this has been to rationalise the brands we market, manage stock, be more focussed and target New Product Development (NPD) more carefully, and improve our operational and financial performance."

This goes with them closing one of their brands "rock and roll beauty" at the end of March - https://www.instagram.com/p/Cp0l55sJNb9/?hl=en

Seems like they are focussing more on the bottom line.

I mentioned before how NYX cosmetics was bought out by L'oreal in 2014 for $500 million on $120 million revenues so a 4.16 revenue multiple.

In 2021 Deciam, who are the parent company of the ordinary, had a large investment from Estee Lauder that valued them at $2.2 billion on $460 million revenues, with the intention to fully buy them out by 2024. The ordinary are known for "affordable" products so I imagine similar margins to Rev B. In terms of online following Rev B are slightly bigger on social media.

This was a 4.78 revenue multiple. The same multiple for Rev B would value it at around 308p.

Obv I realize times have changed slightly in terms of revenue multiples with the inflation macro (though this is receding now especially in the US down to 4%). However it does seem the larger beauty companies are willing to pay relatively large revenue multiples.

https://www.cosmeticsbusiness.com/news/article_page/Estee_Lauder_Companies_to_acquire_The_Ordinarys_Deciem/174754

As has been said the new provisional NED Rachel Maguire was a former head of AIM. Can't see her joining a company she believes won't be able to re-list.

Could be interesting if true but don't think the source is that legit looking through all their twitter posts they tend to state a lot of rumours.

"To allay our core investors fears we can confirm the dilution will only come from the 35%. We will also begin a 5/1 share/holiday scheme where employees can gain 5 shares and 5 paid holidays for every 1 of the 35% holders shares".

I don't see Bob entertaining a low takeover. To remind, this was a reply I had from him on 20th May after I wrote saying I believed price should be around £1.50 after making comparisons with ELF and warpaint and how I was worried about it being bought out cheaply.

Bob replied with this - "Many thanks for your email.

We share a lot of your thoughts and remain hopeful of a relisting very soon.

We are well aware of the ELF valuations and aspire to be regarded alongside them.

Fingers crossed for a couple of years of increasing valuation without any predator knocking on the door.

Thank you for your support.

Bob"

Phat J had you really not asked him anything recently? He said "please do not 'continue' to ask questions you should be aware I will not answer". Maybe he thought you were someone else who already asked something similar? I have the feeling he's prob being emailed a lot by different PIs going just by this board.

Good point Canary, he said in a post a few months ago he wanted to travel less. Now he's gone to Dubai in June?

Can't be a school holiday either that would be mid-july - aug.

US inflation 4% verses 4.1% expected

Pumpky Mustang energy has £0 revenue and a £3 million Mc, not sure is comparable as small companies often do reply more.

In terms of the macro CPI data will be released at 13:30 our time. Should show a further fall in US inflation.

Tbf to Bob it's true that he has been very good at responding to PIs. Has anyone been in a £200 milllion revs share before where the CEO regularly speedily responds to private investors? Most CEOs would blanket never reply.

Oke I agree that Boo will have a boost from their Rev B investment however I still don't agree on the need for an equity raise. They have £14 million cash and £32 million debt, £18m net debt. I don't see why that means they need a raise? They actually finished FY2021 when still private with £74m net debt (only £5.5m cash).

Also surely they would rather raise from debt if possible if they had to with the sp so low, Bob Holt is quite respected in the city I'd have thought he could raise it.

In the "Progress to lifting share suspension" section they say this - "Following the publication of these results and the changes the Board have implemented to the Groups governance procedures, the Board are continuing to work with the Company's nominated adviser, Zeus Capital, to enable restoration of trading in the Company's shares in the near term. The remaining work to be completed includes a review of working capital and finalisation of internal policy documentation."

Wouldn't they also say something along the lines of the company needs a years worth of cash to re-list if this was indeed the case? The share is suspended either way so it's not like they are trying to defend the sp from bad news.

Rev B have a new skincare range with Sali Hughes who is a well regarded UK Beauty journalist, she also did one with them last year which at the time Adam Minto said was boosting sales (obv have to take with pinch of salt).

Not sure how material to Rev B but she seems to have a good following who are quite engaged with her posts rather than "low interest" followers.

Also someone asks this:

"I know you’ve been asked this before Sali but is this range here to stay forever or is it limited? Needing to stock up again so if it’s limited I’d like to really stock up"

"Well, one can never say forever about anything, but there are no plans at this point to limit production, and more products are in the works."

https://www.instagram.com/p/CtGmPPHtxpU/?hl=en

In order for Boo to gain more at a low price they need current holders to sell at a low price, I don't see this happening as things stand. Before there was Jupiter selling large amounts which helped Boo to buy loads but this is no longer the case.

Not sure RevB need to raise funds either, net debt is £18 million - £14m cash, £32 million debt. It doesn't really seem that bad? Especially considering they used to have far higher net debt when private. If they really need to raise more funds why not more debt, Bob Holt likely has a lot of contacts and respect in the city.

Oculus they never gave us a time, so don't see how it can "move again"?

You would think there has to be some interest from the larger beauty companies. NYX professional was bought out by L'oreal in 2014 for $500 million on $120 million revenues so a 4.16 revenue multiple. No idea what NYXs margin was but they were marketed as "affordable" beauty at the time and targeting growth.

A 3x rev multiple would value Rev B at around £600 million or 193p (Using £200m rev - FY24 sales are predicted around £205m and FY23 prob £190m or just under). ELF could buy Rev B with ELF shares and dilute by only 13% to make an offer of shares equivalent to £600 million.

Obv I am biased in pushing an ELF comparison but can't help but notice in a way Rev B isn't that far off where ELF were for year ending 31/3/2021 so just over 2 years ago.

For FY21 ELF made £253 million revs ($318 million), £28 million EBITDA and £4.96 million profit.

For FY21 Rev B made £157.6 million revs, £13.4 million EBITDA and a £17.7 million loss (unaudited though I believe)

(Obv these ELF results were slightly better than current Rev B however nteresting to note when ELF reported these FY21 results they were valued at £1.19 billion so over 20 times Rev Bs current Mc, despite ELF reporting £38 million net debt so having over twice Rev Bs current £18 million net debt).

Obv however since then we've diverged with ELF having huge growth whereas Rev B FY23 prob around £190 million revs and finishing with a small EBITDA loss (according to rns). Obv it also says these figures may be improved upon with audit.

However the point is Rev B isn't that far away from 2021 ELF. ELF was created 9 years before Rev B (2004 vs 2013).

Obv though part of ELFs recent growth was doing what Rev B had already been doing with large social media led growth and targetting the younger market. ELF have still kept their sense of slightly more premium brand and margins however with this growth. I'm hopeful Bob Holt can find ways to get closer to ELF.

I wouldn't expect us to emulate that same rapid ELF growth of the last 2 years and catch up with ELF current figures in 2-3 years as that kind of growth seems unusually good, but if we could get to where ELF are now in 4-5 years then would appreciate if Rev B valuation could have a commensurate 77 times gain over the period that would be required to get to current ELF valuation!

You do wonder if they are storing up some good news perhaps for capital markets day? For example they haven't officially said much about the launch into Walmart yet (I think there was one sentence in the recent results) and It now looks like they are launching into DM Deutshland which has 3,700 stores (as it has 'Revolution man' products on that site all listed as "new") and the new Finding Nemo collab will be in DM in August but we've only heard about this indirectly so far rather than official comms from Rev B.

They had £21.2 million net debt as of 31st July 2022, latest update as of 27th May 23 they had £18 million net debt so it wouldn't appear these net debt levels are a problem in running the business however the reduction of the facility to £32million from £40million has given them a little less wiggle room.