Member Info for Hosai

I believe 1x sales for every division would take sp to around 160p.

I know many including Pearls have mentioned that THG may (hopefully) publish split accounts for each division this time. The only issue is the legal separation was only done on 26 July 2022 so not a full year yet. Not sure if that may affect them doing split accounts at this point? Perhaps though the legal separation part isn't relevant to laying out the divisions separately in the accounts.

Market seems to be reacting to Steves new optimism

Seems like Sparta (assuming the Times is correct that they have bought) are waiting till after results to go public unlike Kelso.

Still not 100% clear how MM feels about Kelso and how friendly they are/will be but Matt's wife Jodie 'liked' the Kelso comment on his post, hopefully she can remind him their recommendations? lol

It's been said for a while that PE will be looking at the current bargains in UK valuations. I imagine atm THG is a little complex with the number of divisions, however once they hopefully soon start reporting them all seperately it's not hard to imagine opportunistic bids coming in trying to buy Beauty or nutrition for 1 x sales once the figures for each division is laid out and simplified, the comparisons with peers would be too hard to ignore.
This would obv be rejected but it surely would start improving the share price. 1 x sales is fairly poor multiple in Beauty/nutrition but would still take THG up to 167p as a start.

*I meant trading 'losses' that they can claim as tax losses

Interesting to ponder how much tax losses they have they can carry forward? Looking at previous reports they have at times claimed tax credits, which I guess must be claiming against profits in individual countries etc?
So it won't be the full sum of all their trading profits that they can claim as tax losses moving forward as I believe some has already been claimed however will still likely be a decent amount that will make it easier for EBIDTA to become net income.

Manc you have the time to write on this message-board but wouldn't have the time to write a linked in post?

LVMH are at 5.5 times sales. THG Beauty at arguably around 0.4x sales if split THG market cap by revenue which obv values ingenuity commerce very low. So LVMH are at 13.79x THGs revenue multiple.
Obv in LVMH favour they have EBITDA margin averaging around 27.5% whereas THG Beauty probably averages 6-9% in recent years so prob about 4 times the margin. LVMH still showing revenue growth atm. LVMH probably slightly worse net debt as a percentage.
Still would argue THG beauty undervalued on these figures. If you deduced 4x THG 0.4 multiples to take out the ebitda 4x better LVMH EBITDA margin, and another 0.4 multiple due to the fact that LVMH still showing growth atm you would end up deducting 2 (0.4x5) from LVMHs 5.5 rev multiple which would leave 3.5 as a THG beauty revs multiple which is still over 8.75 times the current THG Beauty 0.4 multiple. Obv 3.5 multiple would give THG Beauty a valuation of £4.15 billion or share price equivalent of 300p just for THG Beauty.
I'm not saying Beauty is worth a 3.5 times multiple just using as an example of potential undervaluation. I'm just there could be more adjustments made here.
Would be good if Beauty could perhaps have targeted the luxuary market a bit more recently as it seems the more well off are largely unaffected by the recent inflation.

Ulta Beauty are valued at around 2.6 times sales. They regularly have a 17-18% EBITDA margin.
THG Beauty margin is currently around 6-7%? Recent results forecast for "adjusted EBITDA margins in excess of 9.0% over the medium-term" which presumably applies to Beauty too and was historically what they did achieve.
What's weird is that they can't get this margin higher considering they bought Bentley Labs mostly for the margin improvement from vertical integration.
With THG beauty making up 53% of total revenue I'd say market is currently valuing THG Beauty around £460 million or 0.39 x sales. You would think even with this lower EBITDA Beauty should be at-least 1 x sales which alone would be equivalent to £1,185.6 billion or sp equivalent of 85p just for Beauty (though depends slightly which THG market cap is the correct one online, I've gone with £875 million).

Wouldn't say 'pie in the sky', most companies listed in US are at higher multiples so makes sense for UK companies to think they could do better listed there.

Fell as soon as the US opened and carried on

I think due to the lower inflation data from US

He also refused to open the books to the likes of Nick Candy. Remember times said this at the time:

"Industry analysts doubted whether Candy, who had also touted ambitions to buy Chelsea Football Club, would have the financial resources to table a £2 billion takeover. However, sources close to the process said that Candy Ventures had submitted two fully funded bids, backed by a large institution and sovereign wealth funds.

A source said Candy Ventures, working with advisers at Bank of America Merrill Lynch and Deutsche, had been working on a third bid at a significant premium to THG’s share price.

Candy invested in THG during its stock market listing and had been looking at the company for months before its interest was outed."

https://www.thetimes.co.uk/article/thg-shares-on-slide-as-two-bidders-walk-away-from-takeover-vl939frr8

He already said £1.70 significantly undervalued the company and rejected the offer, so would need to buy it for more than that.

Meanwhile Marshal Wace revealed the biggest ever recorded short position on Natwest at £156 million and the sp rose.

"but plenty are and time and time again, they’ve made the right call".

Most have so far but not those who opened one at 33p. Also at times longs have made the right calls too.

Matt M made this comment a few weeks back on linked in about the John Lewis CEO. Thought it was quite well written -

"I personally believe the criticism towards Sharon and the team at John Lewis is unfair. She inherited a business model which has struggled to fit with modern times, and was in desperate need of change.

From the outside, it looks like the maximum possible level of changes are being made, while negotiating a fine balance with the partnership principles and model. Even then, these changes might not be enough for long-term survival.

Failure to make changes would be reckless and arguably terminal.

It would be lovely to give people more free things for turning up at John Lewis or Waitrose each visit, while also promising to be the cheapest place to do your shopping. It would be fantastic to not have to reduce roles in the partnership while encountering fierce competition.

But that’s no longer realistic in the face of high quality German grocery discounters and Amazon.

If John Lewis was ever to fail (let’s pray it never does), I suspect it would be failing much later than it otherwise would have done had Sharon and the team not tackled some of the problems.

I’m not sure there are many who are capable enough to do the job, so let’s hope Sharon and the new CEO stick at it and keep challenging the status quo"

https://www.linkedin.com/feed/update/urn:li:activity:7045061084596031489/?commentUrn=urn%3Ali%3Acomment%3A%28activity%3A7045061084596031489%2C7045429224211390464%29

Israel Adesanya won his UFC fight last night, should raise his profile even more. Hes a Myprotein sponser, they are doing a limit edition protein collab. Might not be material but he has 7.4 million instagram followers so can't hurt.

https://www.instagram.com/p/CqDv4tUDvUY/