The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Very vulnerable at this market cap to M&A now. CAT sold just boots (aside their trucks and diggers) now selling boots, shoes, workwear and nice well made clothes etc. A big US company could take DM by the scruff of the neck and really extract huge value (Maybe CAT or Timberland are already watching and preparing đ)
Not to mention we are not primarily construction and student lets are short of supply. So by focussing growth in this are as we are we will grow cash further moving forward regardless of the general economy. So much safer investment than banks or Builders right now and near future.
Basically not managed in a balanced and truthful way, the CEO had to fall on his sword taking a 200p plus SP into the low 30 penceâs. New CEO and BOD moved around is getting all the bad news write downs etc all out there so he can then preside over a great 2 or 3 years of sustained growth. (A normal move for a new CEO). Clearly after this break even update ready to grow and deliver, the BOD know this better than us PIâs (Note the recent Director buys in the market). There are 3 prime land banks that WJG will not sell cheap so temporary delays, they are cutting costs and managing cash very well and cash is king for the return to growth. Investors are nervous, a few sellers and not popular to be into Banks (default risks from interest rates beginning to bite) or housing and land right now. However we have been dragged so low itâs clearly in a sales overshoot and a great time and price to follow the Director buys. Next results or trading update should read positive as I think the new guard have now finished sticking the negative mud on the outgoing CEO (Kitchen sinking complete).
Key takeaways WT are loss making this year and break even next year. Already shared by THG in their last results plus Q&A. Nothing new or contradictory, the key with THGâs true SP value lies in the sum of the parts and once 2 out of 3 show cost absorption and profitability then we are looking at c.150p trading SP with a take over of c.200p (Nutrition hitting the target, either Ingenuity or Beauty needs to step up and delivery). I see this as a buy with current fair value c. 100p right now. Time will out at it always does GLA.
They been sending these types of RNSâs out for nearly 10 years. Practically no revenue or profits. They are often used as a pre requisite to issue more shares and continue the dilution. The current shares in issue x SP = Market Cap. This way too high for a non significant oil producer.
Another vanity project. Should keep away and leave this stuff to Jamie Oliver. Itâs distracting driving growth where it matters like Beauty. City donât like it also so itâs not SP accretive at all. It really is time for Matt to stand aside now and let a seasoned CEO the city likes get this past 150p again. (Wouldnât be that challenging in reality, news MM well away from running the show. Ambassador role was a good sugggestion.
BANK OF AMERICA:
THG PLC (LSE:THG) shares are motoring today and there could be more to come, according to analysts at Bank of America.
The bank has set a 125p price target and reiterated a 'buy' rating, helping drive shares 5.2% higher to 69.08p.
BofA noted while the revenue decline in the recent first half was greater than expectedâespecially in the Beauty divisionâthe worst now appears to be over.
In the UK, the two largest headwindsâfalling online penetration and low consumer purchasing powerâbegan to show signs of improvement for the first time since 2021 this summer, it said.
âManagement called out positive growth in Beauty starting in August, and we expect group-level growth to turn positive again in 4Q23 as Beauty improves with manufacturing revenue picking up again,â the broker said.
BofA sees reasons for optimism in all three core divisions.
In addition to a return to positive growth in August, the Beauty division should see improved margins in the second half of the financial year as the margin-accretive manufacturing business ramps back up following destocking throughout much of 2022 and 2023.
BofA thinks current prices, input costs should remain a tailwind for the Nutrition division for the second half of the financial year and beyond, allowing the flexibility to re-invest in pricing to drive growth.
Ingenuity's strategic shift continues as THG exits smaller, less profitable contracts leaving it on track to add ÂŁ1 billion gross merchandise value in new contracts in the financial year.
Thanks HoundDog, well a revenue delay and no mention of bottom line but cash dropping quickly. I do still think it will be a good investment t but needs 2 to 3 years and now itâs getting closer to a realistic SP until itâs proven to be a Velcro become cash accretive. They were very clever at doing a 50p rights issue, it would need to be a 35p to 40p now for a copy and paste.
Way lower (should say).
Now making more money with a way layer capitalization than when we were 240p. Directors topping up today and for good reason. No brainer cash generator
Regarding the dividend, I think it will be cancelled to preserve cash until one the 3 land sales fetches a decent price and goes through & the existing student accommodation revenue and net show an increase.
Drop is very concerning, how much lower can it go I wonder. The last CEO must have been a totally misleading numpty (At least he has fallen on his sword). With the new guy buying around ÂŁ200k at 46p one hopes that he believers is to be completely undervalued right now. To be open, it seems property prices and land is off about 5% but quite resilient. Also there is a student accommodation shortage. One has to think that we should be on the cusp of an upwards re-rating. I think the next trading update is this month looking at last year. So hoping for some positive news that turns this tanker around. I do feel itâs very undervalued but is there any more write downs or nasties to still come out is the worry.
Can anyone find the gross margin on their projects and products anywhere. Revenue growth excellent as said, however are these various projects highly profitable, are they being paid on time (eg: Philippine government project). Itâs really hard to value until net profit and more importantly cash shows growth. (If not this surely will down to around 30p next results).
As of 31 March 2023, the outstanding balance of loan notes amounted to ÂŁ7,690,000. These all relate to drawdowns on a secured note programme which has been arranged by LGB Capital Markets and which is secured by a floating charge over the Group's assets. The loan notes have terms of up to 3 years and an interest rate of 8%-12%. Subsequent to the year end, the capacity on the secured note programme has been increased from ÂŁ20 million to ÂŁ40 million.
During the year ended 31 March 2023 the covenants in relation to debt service cover and gearing were breached and a waiver from loan note holders was obtained subsequent to the year end on May 2 2023. Due to the waiver not being received prior to the year end and the covenants being re-tested on 30 September 2023, IAS 1 requires that the loans are all classified as being repayable in less than one year, despite their maturity dates.
Hardboy - I assume you think my range bound numbers are too high as data now shows them to be. You seem to be either disillusioned or a troll. What do you think the average SP will be between over the next 18 months. Youâre quick to comment but add no value to this BB.
Also with their new extra large warehouse consolidations and reduced logistics costs coming through, they are set for margin improvements going forward. Story gets better and better. Should be back to 250p when markets normalize
Iâve sold out a loss. I thought this was a growing gas producing company, itâs not. Itâs a derivatives company trading energy prices like Enron only this time listed on the UK market. Itâs extremely concerning the CFO left without any form of handover. I suspect he is under pressure to support some dodgy accounting practices and push the auditors to sign off. I have no real evidence but in reading and looking into this as much as I can understand it looks like it could all come down like house of cards especially with recent fly high gas prices. Good luck to those keeping the faith , hope the divi yield holds up - Iâm out, too hard to understand how it is sustainable for me. GLA - One for the very brave
Interims on the 27th Sept. Raised a lot of cash for growth at 8p last year. Great progress in updates since. I think we are undervalued at 7p
Hardboy - If Iâm in cloud cuckoo land per your comment on my post. Do you mean my rangebound comment is too high or too low must admit in hindsight I would adjust my range bound to 45p to 55p for the next year. If the current contracts do show a huge cash uplift from profits and payments then it could go higher. This is sold as great technology, revenue increasing but from a bottom line perspective itâs unproven - There is certainly no room for any banana skin slips on a P/E greater than a 1000. There we very good at up selling all the prospects ahead of the 50p cash raising. Own the share can be purchased for lower and could well drop further. I brought at 43p sold at 58p. Got it on my watch list. But wonât be 50p or higher if I do decide to have a VIX style dabble.
The Apollo 170p bid wasnât an all cash offer. MM wouldnât allow them to do due diligence (I think I can why now). Ingenuity is an expensive failure, itâs serves other THG entities and the nearly bankrupt Matalan. Beauty revenue crashing, they say lipstick never ceases in times of recession well it does and is for THG. There is no way THG will make up their annual revenue forecasts in H2 so those results will cause a sell off. Only bright spot is Nutrition and a better ebit due to whey price drops. Then MM owns all free holds privately to all of THG units (They are not THG assets). If we get a 150p bid we would be lucky. Thatâs all I can see in the way of possible get out without a loss. But MM will use his property ownership to what selfish end I wonder.