Member Info for Hosai

Novice I can't really see that explaining away such a difference in their market caps. Many would argue this current period has been the worst in a decade or so for consumers yet so far Ocado are the ones doing worse in terms of revenue and EBITDA compared to THG, so those essentials with a high degree of repeat purchasing as you say don't seem to be helping Ocado much.

Wonder what the margins on software as a service be? Hopefully Vivek Ganotra brings some good deals for us.
"This strategy is now delivering tangible results with the Group confirming that it is in advanced discussions to provide long-term software solutions for several significant enterprise clients"

Justise you can add to that Ocado are predicting to be cash flow positive in 5 years, THG predicting 1 year. Ocado predicting single digit revenue growth for the 2023 year and "marginally profitable EBITDA". THG haven't given specific predictions for 2023 yet but I'd hope would be slightly better. Ocado also have a worse credit rating (Moodys gives them B3 versus B2 for THG).

38.28% drop on whey price last January. THG didn't predict an EBITDA for 2023 yet, maybe difficult at this point if about to sign large contract? Would have been interesting.

Price is lowest it's ever been on that 2 year chart.

6.25% drop in whey price today (at-least in the Netherlands).
https://www.clal.it/en/index.php?section=siero_olanda

I agree Canary - this comment from MM was at the bottom of the statement, many ppl (perhaps rightly) don't focus on the comment only on the figures but it did seem potentially intriguing - "Amongst many highlights, I'm especially pleased with the progress of Ingenuity, successfully competing with major global technology giants to transform digital operations for global retailers and brands."

"The company is still a money-pit and until it can prove it can operate in a cash neutral manner it won't be getting anywhere near 100p."

G G G they just reported £50 million free cash flow for H2 2022, I would say that's some evidence of operating in a "cash neutral manner".
Ocado is facing the same economic situation and has negative cash flow, falling yearly revenue down to £2.2 billion and broke even at EBITDA level. If you think due to cash flow THG must retest £500 million then as Ocado is doing worse I imagine you have taken a massive short on Ocado as you must think they are going to down to £400 million odd market cap (down from current £6.4 billion).

They have access to £640 million in available liquidity, (£680 million once the asset sale is complete). Obviously debt too but most of it doesn't mature until the end of 2026 by which time we will no doubt have been back in a bull market for years. Current market cap £658 million. Plus from now on free cash neutral and then from next year significantly positive free cash flow. EBITDA margins predicted to be in excess of 9% in medium term. Doesn't look bad to me?

Yea Ocado back up 6%, an increase of £370 million to their market cap, equivalent to over half our market cup in 3.5 hours trading.

Well RBC said the 60% thing a year ago. Obviously they also predicted ingenuity commerce to grow to £500 million revenue within 5 years from then which looks quite challenging now. Technically if THG did keep gaining £1 billion GMV a year and kept getting £40 million revenue from this then it would increase to £210 million odd within 4 years. £2.2 billion odd GMV increase each year from now would be enough to meet RBCs original £500 million ingenuity commerce revenue in 5 years forecast.
https://www.sharecast.com/news/broker-recommendations/rbc-capital-ups-rating-on-thg-to-outperform--9088704.html

Matt M did have a comment in the update. Some might have raised an eyebrow at this when looking at the figures: "Amongst many highlights, I'm especially pleased with the progress of Ingenuity, successfully competing with major global technology giants to transform digital operations for global retailers and brands."
Maybe Matt M was looking ahead slightly lets hope?
As an aside I just noticed he actually says they "remain confident of adjusted EBITDA margins in excess of 9.0% over the medium-term", rather than merely 9%.

Good point HH. Maybe our grand-kids will be the main beneficiaries lol. We'll be able to afford the best care homes though as ingenuity GMV will be fully scaled and used by then.
But yes, lets hope some big clients encourage more big clients.

Assuming the 14 billion GMV was eventually all used and that gave us £280 million Ebitda a year (at-least by extending that ratio), Softbank would have been getting a fifth of that - £56 million a year EBITDA for £1.1 billion ($1.6 billion).
Obviously softbank were quite crazy but shows the valuation difference on EBITDA 18 months ago.
Lets hope we hear more soon about the large clients in advanced stage talks.

Was it really a 30% miss? They guided for £100 - £130 million EBITDA and arguably got £100 million EBITDA, but had a revenue miss.
Or you call it £70-80 million EBITA but add back the loss making revenues they would have otherwise had of £150 - £200 million odd I'm guessing? Therefore an EBITDA miss but not so much a revenue miss.
People are talking like it's both a large revenue and large EBITDA miss but surely it should be viewed as one or the other?

People are probably tired of comparisons but out of THG, Boohoo, ASOS and Ocado it looks like for FY2022 the latter 3 will all report falling revenue and none of them will report positive EBITA (boohoo haven't reported yet, I'm just assuming).
Meanwhile THG had a small revenue gain of 4% odd plus made £100 million EBITDA (at-least in an arguable way). Or we don't call it £100 million EBITA and call it £70-£80 EBITDA but then surely tbf to THG you have to add back the loss-making revenue of £200 million odd so it's less of a revenue miss at the same time. Or I getting that wrong?
But either way it seems THG will have done the best and slightly unfair that I suspect the market is going to punish THG the hardest post-results. That said this could easily recover back to 60s by end of week (but I see a further dip tomorrow morning).

I'm still a bit perplexed why the iceland deal was not talked about in the update.

I don't get the feeling THG are especially proud of todays update...no instagram post from THG or Matt M.

Oops, should have added the £40 million to cash rather than take from debt for current situation:

FY14: Cash = £54.5 million. Debt = £60.1 million
FY15: Cash = £141.5 million. Debt = £175.1 million
FY16: Cash = £174.2 million. Debt = £300 million
FY17: Cash = £186.7 million. Debt = £397.4 million
FY18: Cash = £234.8 million. Debt = £520.4 million (this year they rejected a £3.9 billion offer).
FY19: Cash = £312.23 million. Debt = £602.56 million
FY20: Cash = £773.58 million. Debt = £524.28 million (IPO raise)
FY21: Cash = £536.8 million. Debt = £489.1 million (softbank raise)
FY22: Cash = £470 million. Debt = £670 million (£510 million cash after asset sale)

Just looking back they have at times been at double the amount of debt to cash. I believe 2022 was one of the toughest years for many companies for a while and probably that THG have faced but they are still in better financial shape than some prior years (at-least on this metric). Hopefully they can now slowly start to grow via free cash flow instead of increasing net debt.

FY14: Cash = £54.5 million. Debt = £60.1 million
FY15: Cash = £141.5 million. Debt = £175.1 million
FY16: Cash = £174.2 million. Debt = £300 million
FY17: Cash = £186.7 million. Debt = £397.4 million
FY18: Cash = £234.8 million. Debt = £520.4 million (this year they rejected a £3.9 billion offer).
FY19: Cash = £312.23 million. Debt = £602.56 million
FY20: Cash = £773.58 million. Debt = £524.28 million (IPO raise)
FY21: Cash = £536.8 million. Debt = £489.1 million (softbank raise)
FY22: Cash = £470 million. Debt = £670 million (£630 million after asset sale)