Member Info for Hosai

Hard to see what the benefit of selling a part of THG in this environment would be. The change in reporting of divisions could be interesting though, the separate assets approach makes the cheap valuation harder to ignore. Likely have to wait until September for this though.

People seem to be assuming lack of update is bad however surely if things had been deviated too negatively since April results they would have had to release a profit warning?
The only things we can see is things like Boots beauty demand remaining strong and whey prices falling sharply since April.

Exactly they have £537 million in cash and access to £170 million more...£490 million loan doesn't mature until Dec 2026. As Lord Allen said - ignore the flim flam.

A few people are commenting in the instagram post again about the sp/updating the market, pretty sure Matt sees these as he often "likes" a lot of the comments.
He is clearly very proud of company etc from his posts but almost seems oblivious or now ignoring the sp for better or worse. In Oct 2021 it seemed like the sp fall was ****ing him off more than now.

Boom wasn't meaning to attack you, just it didn't seem like it was very shorted at IPO? IPO was 16th Sept 2020, then stayed around average 600p for a year (it was at 684p on 7th Sept 2021). Didn't start to really fall till Mid-late Sept 21.

Boom I doubt they were laughing at IPO or if they were must have had to be very patient because the stock stayed around 600p for year after IPO.

Trenners a lot of their spend on warehouses has already happened or was raised from equity raises that probably helped them still have £536 million cash at latest update.
Therefore in a sense, it's already behind them and THG will be aware there will be no more equity raises for a good while and won't want more debt (from what I've read Matt M is very risk adverse contrary to his superficial image). Therefore I would imagine they would have tightened down on growth to focus on bottom line long before if they were seeing signs that it ingenuity commerce was "not working".
Also would point out THG claim they expect to be cashflow neutral from next year whereas Ocado is projecting 4-6 years to be cash-flow positive and their financials aren't much better than THG. They are even predicting less growth and lower Ebitda this year than THG. Don't get why market allows them a £6.3 billion market cap when they are surely at at-least equivalent risk (you could argue higher risk) compared to THG £870 million.

Well in terms of the company you would think so, surely it must be possible to make stable profits from online nutrition/beauty at scale if that became their focus? That's most of the company, ingenuity commerce is the uncertain/volatile part but has been priced at £0 for a long while.

Pretty depressing today so thought I'd re-post the Jess Bezos quote:
"The stock is not the company. And the company is not the stock. And so, as I watched the stock fall from $113 to $6, I was also watching all of our internal business metrics -- number of customers, profit per unit ... every single thing about the business was getting better."

Ridic that boohoo is now higher MC.
THG growing at 22-25% this year from £2.18 billion, boohoo growing at "low single digits" from £1.98 billion. That's likely up to around £436 million more revenue growth for THG this year plus the £200 million above they are already starting from.
THG 2022 predicted Ebitda - 6%, Boohoo 5.5%

Goldy obviously prices would have further to fall to get back to "normal" prices (though obviously it would be normal to have a small amount of inflation too since 2020) but there is no way THG would have predicted a fall in whey price so steep even with their prediction than it would fall back in H2. If anything MM tends to be quite conservative in his forecasts despite the perception of him. They made their forecasts when whey price was at all time high.

I agree Trenners, though in terms of the macro it seems even there some positives are ignored, such as the steep reduction in whey price. It's been too steep imo to have been predicted in the forecasts THG made in April.

What's different with THG is, while it was similar to other IPOs that fell hard, it actually held around 600p for a year.

I would say it would be a good time for THG to do a small share buyback like darktrace did earlier this year but considering the market doesn't seem to care about THG's market cap/valuation arguments there doesn't seem that much point.
Would make it easier if MM wanted to then take private as less to buyout at higher price.

It does feel like MM was fighting more for the sp in late 2021...now it feels like its completely quiet with the 2 questions at AGM. No longer fighting for sp being one of the signs to look out for with a buyout/takeover.

True Pencil, though I still don't think MM necessarily viewed the £5.4 billion IPO as over-valued considering they rejected £3.9 billion 2 years before - https://news.sky.com/story/the-hut-groups-value-hits-4bn-as-takeover-spree-continues-11488943

THG only valued at £70 million more than Boohoo atm...
THG growing at 22-25% this year from £2.18 billion, boohoo growing at "low single digits" from £1.98 billion. That's likely up to around £436 million more revenue growth for THG plus the £200 million above they are already starting from.
THG 2022 predicted Ebitda - 6%, Boohoo 5.5%

They hedge against that though Steve:

Interest rate risk
The Group is exposed to EURIBOR and SONIA through its loan facilities and has entered into a series of interest
rate swap agreements to mitigate this risk. As of 31 December 2021, the Group held €600m expiring December 2022
through to December 2026. Interest rate sensitivity is summarised in note 18. The Group’s financial risks are detailed
on page 109-116 in this Annual Report.

Bank borrowings relate predominantly to the seven-year Euro term loan B and undrawn five-year revolving credit
facility. The revolving credit facility is provided by Barclays, HSBC, BNP Paribas, NatWest, Citibank, JPM and
Santander. The term loan B carried an interest rate of 4.50% plus EURIBOR and the revolving credit facility 3.75% plus
LIBOR. The floating element of the term loan B is hedged by interest rate derivatives. Management notes that EURIBOR
is being reformed as a benchmark rate and are in dialogue with its lending and hedging partners to minimise the impact
on the Group as transition occurs.
If interest rates moved by 10bps, the Group’s loss before tax would be c.£1.9m higher/lower, and the subsequent move
on the derivative valuation would cause equity to be c. £1.0m higher/lower as a result of the same move. Net debt consists of loans and lease liabilities, less cash and cash equivalents, defined as referenced in note 22. For the purpose of the Group’s net debt calculation, loans that are denominated in foreign currency are translated at the effective hedged rate where applicable. Net cash/(debt) is an alternative performance measure and is not defined under IFRS.

#£872 million market cap

Yep £827 million market cap despite them having £536.8 million cash...
(£489 million debt but not due till Dec 2026).