Member Info for Kando

Canary, in just the last 30 days, it's been up 50% from 52 to 76, then back down 33% to 50, then up again nearly 20% in two days. All on no material news or data out of the company. How do you suppose, with swings like that, that it's the opposite of a pump and dump? Unless you mean it's now a dump and pump - which surely is the same thing.

Just the usual pump and dump cycle at this point, no? Pump again today, dump again next Tuesday. It's not necessarily any judgement on value. Until it trades on something fundamental about the business, it's one of the easiest shares to engineer big swings out of. Rumour this, twitter post that, J Powell this, CPI that. Up 30% on rumour, down 30% on macro.

"The new CFO looks decent and has purposely changed the direction away from
over promising"

Correct me if I'm wrong though, but he hasn't bought any shares has he? And neither did Gallemore while he was CFO. This troubles me too.

Yes Canary, I still think (maybe read that as "hope") there's value in holding and even accumulating more. There's significant value in the business, but at the moment, it's starting to feel like that value is locked behind an imperfect leadership and board. Fix the communications, build trust, have an achievable long term strategy and incrementally prove that they can execute on that strategy and that value will start to out. But at the moment, we're going no-where value-wise, and all we get is quarter after quarter of essentially: "Trust us, we'll land whales soon. Trust us, we'll be FCF neutral by such and such time, and FCF positive by such and such. Trust us, capex will normalize to this. Trust us, we'll let you know how the divisional breakdown looks or how a spin off will happen. Even though we've missed on every guidance and broken every promise we've given you to date, trust us that THIS time, we'll deliver." And no one believes them anymore and that's what this share price chart shows - a lack of faith.

Let's be honest, Matt has shown very little interest in defending the SP. I would go as far as to say he's been debasing it with intent.

- Reiterating yearly growth guidance that was impossible to hit (and missing it by a huge margin) with just 60 days to achieve it. It's hard to read that as anything other than an attempt to mislead the market and deliberately pump and dump the share price. Reverse engineering the guidance suggested they were seeing Q4 as some exceptional blowout growth quarter, which it wasn't.

- Assuring the markets in public posts that he will continue to aggressively dilute shareholders to compensate and incentivize staff (who seem to continue to miss targets). Great - for them... Not so much for shareholders. But okay, fine, its not entirely without precedent or merit to do so, but why the public humble-brag post? Just to sour sentiment in the markets more so?

- Intimating and variously announcing divisional spin-offs, relistings, take privates, strategic partnerships that never happen, and high GMV whales "in the pipeline" that seemingly never land.

- Promising to disclose divisional breakdowns of the financials, which has been teased at least since Q3-21 (?), to be released variously around early 22, then H2 22, then now in Q1-23 - remains to be seen if we'll get it this quarter either (track record suggests it's doubtful). The separation took longer than they implied it would and then we're not allowed to see the breakdowns until a meaningful amount of quarters of data had accumulated. This reluctance suggests to me that certain divisions will not make for good reading.

If he wanted to defend the share price he would have done and said none or little of the above. Much of this has continued AFTER the appointment of "city heavyweight" Allen - who has so far been about as lightweight as they come; so light in fact, it's hard to measure his presence at all. He's presided over unrelenting share price weakness, and merely joined PIs in chasing the SP downwards with mistimed buys. He's dismissed investor concerns as "flim flam" and said nothing else, and apparently has no say or control over Matt's comms and guidance.

So it feels to me like Matt is happy to rest on his Golden share right up until the hour it's taken from him - and then what? Who knows. If he wanted to proactively defend the share price, he'd make only promises he can keep, issue guidance they can hit, and build trust with investors that he is an sound leader and honest communicator. He's a great entrepreneur and seems like a very decent, charitable fellow - but he seems to be working through a checklist of what not to say or do as the leader of a publicly listed company. He's got no credibility with any investor, current or prospective, and that's become conflated with the credibility of THG as a whole.

It'll be 25 and done. They were raising until something broke and something broke. The stability of the financial system is also part of a central bank's remit. Just two weeks ago they were talking up 50 to project their resolve to fight inflation, so to suddenly now go for zero would be to be seen to meekly capitulate in that fight, so only 25 makes sense, while talking down the need for further tightening - thus holding rates steady in subsequent meetings. The narrative is already changing to this crisis "doing the fed's job for them" in tightening credit. Then the discussion will invariably turn to when they start to cut again.

This is why Powell said far too much two weeks ago. It was completely unnecessary to threaten what the market perceived as the very real possibility of overtightening, and now he's going to have to walk it all back in and justify possibly under-tightening going forward, to preserve the stability of the banks. It was a messaging own-goal and jeapardizes the central bank trust he depends on to achieve his goals.

I'm ever bullish on the company's prospects and think Moulding is a more than creditable businessman and entrepreneur, but his communication has, in aggregate, been a significant liability post-listing.

I would still want him to remain in post as CEO, driving growth and ambition, but I think at this point, I would prefer it if he step away from front of house communications. My patience was tested and probably exhausted by the last guidance miss. It was more or less inexplicable. It read as a deliberate attempt to mislead the market. They had 3 quarters of next to no growth, which was forgivable in the macro environment of last year, with plenty of other companies experiencing outright revenue declines, everyone expected and would have understood a more modest yearly print, but to then reiterate double digit yearly growth with 3 months to achieve it implied they were seeing a blowout quarter with sales up circa 40% on the same quarter of 21. How and why Charles Allen then signed off on that guidance is again inexplicable. I have found his presence to be almost entirely ineffectual thus far.

The company, justifiably, has no credibility with even its most bullish long term investors, let alone the wider market. Moulding claiming this year will be "broadly FCF neutral" reads as "probably still signicantly FCF negative but hopefully less so than last year" and when he says "expecting to be FCF positive" after that, read that as "hopefully actually neutral in a year or two". The jam tomorrow stuff has to stop. They have to start giving guidance they can hit. The market is happy to invest in a slower growing company that has a plan and proven execution. It's not willing to invest in a company that is being painted how Matt and John would like to see it, but not how it actually is. We need guidance and communication delivered by someone not wearing the same rose-tinted glasses. They've built a large, competitive business, and they are right to be proud of that, but it colours the way they see it, and the market won't forgive leadership that seems out of touch with reality.

"Everyone gets downbeat when the s/p falls, Kando you posted this excerpt on 6th March - s/p touched 74.4p

06 Mar 2023 10:13

"I don't see THG changing course on Ingenuity, nor selling Beauty. The winding down of On Demand is the most you're going to get in terms of long term strategy shift. There isn't the necessity to do anything else. The rest of the business has the potential for sustained growth and healthy margin. Their ambitions are still there to be realized now that much of the investment has already been made."

That was in response to someone suggesting Beauty be sold and Ingenuity be spun off and relisted. What I'm saying today is that the communication and investment focus being accorded Ingenuity is starving Nutrition of the attention and investment it deserves. I don't think we'd be talking quite so much about whales for Ingenuity if Nutrition's growth wasn't so anemic last year. It had terrible comps from the previous year sure, but still, that faltering growth was probably a function of insufficient investment, so attention is being redirected elsewhere to distract from it. I don't like that.

I see that has improved of late with the Iceland and German partnerships, but I want to see that focus maintained, and not drift back to Ingenuity as the fabled jam tomorrow division to hide underinvestment and complacency in Nutrition.

"Ingenuity is at the heart of the business, Viveck said they have a deep belief in Ingenuity and the plans that they have for it.

The continue to develop it, and the Auto store partnership simply confirms that.

They will not stop spending and developing IMO.

I think hoping that they move away from Ingenuity is IMO wishful thinking."

Well VIvek would say that, it's his job as Mr Ingenuity to say that. I'm not suggesting that they no longer pursue the Ingenuity dream, merely that it shouldn't be drawing attention and funding from Nutrition, which should always take investment priority.

Everything else should be considered icing, and not confused with the cake itself. Nutrition is the cake, Beauty the icing, with Ingenuity very probably relegated to the cherry on top. It's more of a long shot to pull off, it's not where we should be placing all our chips. Nutrition can have a very strong, very dependable growth trajectory, that could generate plentiful shareholder value on its own. Focus on that, the rest should follow. Nutrition is where the money comes from now, and going forward.

I think management put far too much ongoing emphasis on ingenuity, such that the company is only judged on its performance and outlook. The jewel in the crown has really always been Nutrition. Those are the group brands that are capable of truly dominating on a global scale, riding the crest of the fitness and nutrition wave that could quite easily see divisional revenues grow to 5bn+ by the end of the decade. The focus should always be on scaling that, and the other divisions act supplentary to that (using unused capacity in the global infrastructure they build for nutrition). Beauty is great and the brands we have now are fairly strong and useful enough, but I don't see the same intrinsic brand strength and moat as myprotein/myetc ranges.

Maybe Ingenuity itself will one day be its own thing, maybe, maybe not, but either way, strategy wise Nutrition is the breadwinner and cash generator now, and can be the breadwinner and engine for growth going forward. So I'd like to see more focus on that, less on the ifs and whens of whales for ingenuity, which would be nice, but increasinglu seem illusory.

I'd like to see Nutrition cater properly to the vast India market. If you read reviews on trust pilot, the quantity of posts from Indian customers complaining about long delivery times, undelivered/expired items seems to suggest there's a significant market there, but one we're not currently servicing correctly and will potentially lose to some other competitor, if we're not first and best in class. If they announced plans for a distribution center in India, I would consider that money likely well spent, going forward.

"@ Pearls - No one beleives (except you maybe) that the next RNS will be good. The form book says bad and that is form built over a pretty long period.

Last quarter RNS was frankly poison to any investor - totally at odds with three months before statement and deliberately deceptive by THG.

Unless this changes we will be back to the low 40's.

My expectation is for THG to disappoint again and only just edge inside the bottom end of guidance - 70m. Sure there will be jam tommorow promised like 1Bln GMV added to Ingenuity but as we now understand thats just spin and BS to keep us all strung along."

This is all a fairly accurate assessment. The overpromise underdeliver MO of the last 18 months is why this share hasn't mounted any sort of meaningful recovery yet. Things might well be fine behind the scenes, and things might even be good moving forward, but the leadership seem to be doing their level best to miscommunicate and breed distrust in the market. "Whales" have variously been promised to land by the latter part of H1 2022, then H2 2022, now some time soon in 2023, then come the April update I'm sure we'll then be left to expect them some time in H2 2023. Why communicate this at all? Announce when they arrive, that's all the market needs. They don't need to be disappointed. This baseless teasing of the market has become amateurish. It's time to get real on guidance and start overdelivering, even if it makes the company's progress seem more modest.

The postal strikes accepted, the scale of the miss on 3 month old guidance was also a completely unnecessary own goal - that I agree, almost looked willful.

You know he's the sort of idiotic low effort poster that once he sells and wants back in at a lower price, he'll switch to spamming "sell before the next drop".

Give it a rest, spamming here won't change the share price.

"Think we can agree it looks highly likely Ingenuity is listed in the USA"

I disagree. Think you might be a bit of a fantasist Oke.

This and the collapsing price of almost all other commodities is why Powell is now in misstep territory and why yesterday he said far too much. He's looking at backward facing data to inform the use of a forward acting instrument. An instrument with a significant input to output lag of 12-18 months. There is such a monumental glut of disinflation in the pipeline already from commodity input prices, that to be considering hitting the brakes harder still is more or less inexplicable beyond being seen to talk tough rhetoric. They're essentially signalling the prospect of overtightening, at odds with what the market expected, wanted, or needed.

"Boohoorockets

Posted in: THG

Posts: 149

Price: 69.50

Strong Buy

Thg be £1 in the coming weeks06 Mar 2023 10:59
Thg a steal at this price,your getting a £1 share for 70p"

You posted the same thing yesterday and spelled "you're" wrong both times. Just so you know when you post it again tomorrow.

I'm not attacking Oke. I simply disagree with many of his predictions; predictions which I think are coloured by his investing time horizon - which outwardly seems like months, rather than years. He makes some good points even if I disagree with his conclusions.

I don't anticipate any sale. Only partnerships. They have enough cash on hand to make it to cash flow neutral and beyond and debt that doesn't mature for another 3 years. It would be madness to sell Nutrition, those brands have the potential to be £5bn+ global rev in time, they're not going to realize any of that value selling it in today's market at today's prices. I don't see the necessity or rationale of such a sale. It seems like the fevered pipe dreams of short termist investors. Same with almost evrrything Oke's posted over the last month. It just seems like someone hoping for a quick 3 bagger in 6 months. They're not thinking 10-20 bagger in years. I don't see THG changing course on Ingenuity, nor selling Beauty. The winding down of On Demand is the most you're going to get in terms of long term strategy shift. There isn't the necessity to do anything else. The rest of the business has the potential for sustained growth and healthy margin. Their ambitions are still there to be realized now that much of the investment has already been made.

Storeleads is useful for spotting new stores, but not so useful for keeping tally of total stores, since many in-house THG brands have, according to them, "switched to other platforms" and thus removed from the tally of total stores - like allsole, coggles and mybag just lately, when they are all very clearly still THG wholly owned and hosted. So the total store count and per quarter additions have bobbed up and down all year. It's useful but seemingly isn't all that accurate.

You have to remember that Royal Mail ramped up their strike action from Black Friday through to Christmas eve. I imagine THG leant more heavily into alternative couriers to avoid the disruption and the competitors simply can't handle the volume from companies avoiding RM - as was publicized today about Evri(Hermes) failing over Christmas. Evri and DPD have relatively poor delivery failure rates - marked as delivered but customer never received them. So many of these complaints are likely a function of last mile misdeliveries, and not a symptom of THG side logistics.