Member Info for Hosai

Golden the debt isn't due until December 2026. Therefore I don't think it negates the £536 million in cash in the short/medium term.

Crowman, we are all entitled to our opinions but your posting history on various stocks is a little....negative?
The bears tend to get annoyed when THG is compared to Amazon and the sp being different from the company so it does seem unrealistic for you to expect bulls to not object to you pushing a comparison with Quindell.

The crowman, no-one boasts of them having massive cash in the bank, it's merely solid. Are you saying all the companies they have bought such as Cult Beauty and Dermstore are all part of some shady practices too? I don't think "growing revenue" should be used as an insult or attack it's normally a good thing to grow revenue?
Did Quindell have heavyweights like Sir Terry Leahy, Sir Thomas Hunter and Lord Charles Allen invested?

Current market cap = £872 million.
Combined amount raised in last 22 months at IPO and post-IPO equity raises = £1.66 billion.
This is ignoring the entire value of pre-IPO THG i.e My protein, Look Fantastic, Ingenuity etc.

Goldy, the whey price has fallen back to Feb/March 2021 levels as far as I can tell.
Obviously whey prices are still higher than 2019/2020 but THG have also raised prices since then (I know coz I've seen people complaining about it in forums...though also other protein providers have increased).
It's true they haven't passed on the full cost increases of whey since Oct 2021 but with how steep the fall in price has been recently I wouldn't be surprised in the margins were not getting closer to what they were, especially if THG kept prices the same now and didn't drop them back. Look how steep the drop has been:
https://www.clal.it/en/index.php?section=siero_olanda

It's not that there aren't fair points in the Barclays report (same as Citi report) but the price target is clearly pulled out of the air. The same way they pulled the "THG Beauty could be worth £4 billion" out of the air in September.
They've downgraded THG by a third from 3 months ago in April when they said 150p. What's happened since then to make THG a third less valuable? Inflation overall seems mostly in line with the expectations from back then whereas whey prices have fallen surely more steeply than anyone would have predicted.
If anything you would think they would have increased the 150p target since April not dropped by a third.

Farrell THG said at results they expect to be cash flow neutral by next year...why trust Barclays more who seem to be claiming THG will lose around average £94 million a year from 2023 - 25?

Posted this a few hours ago - https://www.instagram.com/p/CgM1c1qO8bU/?hl=en

Do the board really need to update us at this point considering they didn't last year? If numbers materially changed they would update. It's their job to look after the share price long term not hold investors hands. Lord Allen did advise investors to "ignore the flim flam".
Only argument I can see for the update is that they said separation would complete by end of quarter 2.

Rock even if that were true it would mean Charles Allen had agreed to be chair AND to buy a million shares in THG when he chose to join which is obviously bullish. You can't spin a million pound buy to not be positive.

Rock I was seeing it through Charles Allens perspective not Barclays, I doubt Barclays take director purchases into their valuation estimate.
I don't see why his terms would significantly better than Balfour Beatty but as was said yest he bought £243,000 worth of shares with BB after 10 months whereas with THG £1,000,000 worth after 3 months. I doubt there is a significant enough difference in terms/packages to have encouraged him make such a different purchase size with THG if that was what you were hinting.

Also it would seem strange for Lord Allen to have bought £1 million worth of shares just before THG announce a profit warning of the type Barclays have imagined here.

Slightly messed up my cash calculations there but you get overall point lol

In terms of the cash-flow Barclays are saying -156m in 2022 which would take THG cash down from £536 million to £400 million end of this year. They are then saying THG would lose on average 100m a year till 2025 and finish that year with £100m.
This paints quite a different picture to what Steven Whitehead said at results 3 months back -
"On the cash generation, yes, it will -- we are expecting it to be below £200 million worth of cash usage this year. That's -- there's a £200 million CapEx sort of guidance for this year, which then should fall a bit into next year as well. We're expecting to be cash flow neutral next year at the free cash flow basis.
Obviously, the operating cash flow, we should be very cash generative, but with all of the bits on top. So next year, we should be somewhere neutral with cash generation kicking in at the free cash flow level there afterwards. So that kind of gives you the feel for that."
I don't believe inflation outlook is any more dire than it looked 3 months back when he said this, if anything it's slightly better, especially in terms of whey which has had a sharp drop to an extent I doubt was predicted.

Agree Tricky, in terms of Boohoo they are predicting "low-single digit" revenue growth this year and Ebitda margins between 4-7%. For ASOS they are predicting revenue growth of 4-7% and a slim profit. For THG it's revenue growth of 22-25% (around 18% organic from my calculations) and 6% Ebitda margin.
Therefore THG margins are likely not much better but it makes sense for them to have a growth premium versus companies with similarities.

CITI very different from Barclays in terms of peer group comparisons -

"Applying peer group multiples and conservatively overlaying a 30% discount, we derive a SOTP-based target price
of 220p (c. 200% upside, vs 250p before), representing 1.2x FY23E EV/Sales. In our
bull case, analyzing the potential impact of THG’s divisional separation exercise and
considering our view of normalized/FY25E divisional FCF, our DCF-based SOTP
derives 600p/share. Our SOTP implies 2.0x FY23E EV/Sales for Beauty, 2.1x for
Nutrition and 3.1x for Ingenuity, [with the internal separation exercise improving the
capital efficiency of both Beauty and Nutrition]"

I don't want to jinx things but it does seem 70p has been a fairly hard floor over the last few months...floors not being something one would associate with THG sp.

B1inky MM was never going to sell (he rejected £3.9 billion in 2018 when the company was a lot smaller with less cash and similar debt to now).
The only thing that might have happened was a buyout with MM but the bigger PE players probably didn't want to do that and for MM he didn't want too much debt.

Barclays basically imagined and created a profit warning for THG with slashed revenues, slashed margins and far longer to get to cash flow positive than THG are predicting. Yet even with this imagined scenario that hasn't happened (no such negative update from THG) they still give a higher PT than where sp is now.
Even with their bearish analysis they don't foresee a capital raise.

Even if companies were over-valued at times recently as-long as they raise money (like THG did) then they did the right thing (though it wouldn't appear THG believed IPO was overvalued or they wouldn't have rejected offers for £3.9 billion in 2018).
In the last 22 months THG raised around £1.66 billion for the company from the two equity raises (IPO and softbank). Not far off double current market cap of £933 million.