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Hi Swazer
Just had a look at your posts the last few months
Tbf you called the price action
Genuine question
What’s your view on where we go over the next month or so ?
Interested to know your opinion
Thanks
If Avacta sold their Diagnostics business ? Would they achieve £30M they paid , say they could ?
They don’t attempt to settle the Convertible in part but use the proceeds to settle the next Qtrs payment, the share price should firm , Avacta when the timing is right conduct a placing to make up the gap between the loan note and proceeds of the disposal ? £15M to £10M? Square the outstanding convertible?
Appreciate the above depends on the disposal price
Hi Martinu
My thoughts on stock it is usually it held at cost ? Not at a future sales price ?
Trying to work out the cost of stock per tonne and how £much do we need to service the expected sales growth over the next 12 to 24 months ?
Any ideas of the cost per T would be appreciated ?
From recent RNS below
‘Stock: there was 13.9metric tonne of SlimBiome® taken from stock held by two partners (Maxum and Cambridge Commodities) in 2023 compared to 2022 (up 39%) representing a value of £417K. Stock held by Cambridge Commodities, who supply the UK market including Holland & Barrett and THG, currently stands at 8.5metric tonne of SlimBiome and Maxum, who supply OptiPharm, hold 16.0metric tonne. The Company has commenced manufacture of replacement stock for Cambridge Commodities as it anticipates most of this stock will be used for existing orders planned for delivery in the next few months. Maxum stock use is averaging 1 metric tonne per month. The recent agreement with Costco and the appointment of Ravenswood, a subsidiary of Brenntag, should accelerate usage with the aim of stock replenishment later in 2024. The planned expansion by OptiPharm of its products into Asia and the USA is expected to increase demand for SlimBiome’
We can surmise it costs £30,000 per tonne to produce the core product based on above.
So give or take somewhere near £1M of stock is required as a ball park figure to be able to double sales maybe ?
Rest of the cash as they say on marketing?
With no debt and increased stock then £1.4M raise looks reasonable to fund the planned expansion ?
Any views ?
Big Mike likes his model train set as much as he likes Boo?
Wonder if we get an RNS with a Mike link up with Boo one day?
‘Further to the announcement dated 23 February 2024 giving details of Frasers Group plc ("Frasers") as a strategic shareholder, Mike Ashley has entered into a consultancy agreement with Hornby through Mash Holdings Ltd (a company wholly owned by Mike Ashley). Mike will be available to support Olly Raeburn, CEO of Hornby, and the wider business, particularly in relation to systems, operations, logistics and, where relevant, broader matters of strategy.
This approach is aligned to Fraser Group's policy of partnering with strategic investments in order to add value for the respective shareholders of Hornby and Fraser Group. No remuneration is payable to Mash by Frasers or Hornby for these consultancy services’
Hi Golden
Good to see you on the BB again
Opportunity knocks here if you are not already holding but it won’t be a quick buck from when we had the last 2 pops in
2022/2023
Sometime 2025 is my call / guess at best for a buyout
Just what price this drops to in meantime? There is no support or Institutional Investors going to buy in with Matts open hostility to the City and doubtful a 3rd party bid with the £260M of debt at current cost of capital
Throw in no dividend and Matt telling everyone on Friday he’s up for a fight and he holds in excess of 25% with the employees, can’t see any reason to add/ buy just yet but a decent hold if your still in the stock ?
We all know that Matt doesn’t like the City and there is no love lost either way.
It’s just a question of when not if Matt bids alongside his concert party partners to buy out the balance of shareholders, as such there is no incentive to promote the share price.
Interest rates are too high for a deal today as THG couldn’t afford servicing the associated debt but maybe sometime 2025 ?Who knows ?
In the meantime he pushes on with running his business and investing the FCF each year
Suggest us Private Investors have to just accept the situation, we can sell and move on or hold and wait for the day, but with £260M of debt, £55M of leases and Matt / employees controlling in excess of 25% of the equity there is no white knight coming to our rescue and Matts post today is a clear message he will fight hard to retain his control
Hi OhhCant/OSG
One thing we can agree on is Matt doesn’t want to be on the market ?Think his views are well broadcast on that point .
MM could form a concert party with the employee trust and long time institutional supporters to attempt to reach a sizeable combined holding
Alongside PE Bid in for the balance they don’t own then attempt to get to 75.1% ,then deal with the balance via the threat of scheme of arrangement? It’s possible
Nb Not sure Kelso have the clout to direct matters
No idea what that price would be but with £260M of debt and capital markets demanding a a high price for risk capital it would need interest rates to drop considerably to make it viable
In the meantime no rush for Matt, he’s in control and can make the move on his timetable, suggest the market worked this out at 90p and it’s telling the Shorts are not at 5% like the past, they know the above is a possible event it’s just when?
Ste, you and I had differing opposing views in December 2022 - we kept it civil -when we sat at 38p, the rest is history on the price action
15 months on and based on current known info I agree with your overall gist today
Not sure how PI’s make money short to medium term on THG as it stands, MM has strengthened his control via issuing shares to the employees, he wont allow a premium listing and he can’t sell a division without the banks wanting the £260M repaid and THG has £55M of annual rent to pay put aside £125M of so called capex to fund
Worth noting THG group debt was almost 50% less 15 months ago, it’s helped MM that THG has increased its debt pile as it deters any 3rd party restructuring plans
So with in excess of 25% of the equity under MM’s control he can run THG as he feels fit, it would require a concert party of considerable size to oust him off the BoD and who would organise/ action that ?
Matts game plan could well be let the shares settle to a price that when the private equity markets fully open that long suffering shareholders are more receptive to low ball bid from him ? It’s just how it takes to get to that point and what price ?
THG doesn’t make a pre tax profit as such but generates £120M FCF before capex which is predominantly on software for the platform.
We had the same conversation 12 months ago, could THG strip back capex? Even by £60M a year as a figure ?
Pay down towards the £260M debt pile ?
Our FCF had been heading to £140M last year
Any views?
Thanks Magnum / 404
So Matt collects £49M in rent a year but he has debt against the commercial properties so he has liabilities ?
Any other views on this amount ?
Just trying to figure out what Matts agenda is ?
Point being … does Matt ideally need to sell the real estate and reduce his liabilities to remove the risk of private equity / others restructuring the leases if THG was taken private ? If that was possible ?
We know there is SOTP here but is that the catalyst, Matt sells the real estate repays his loans ?
Until then we limp on ?
Well balanced post Sieveco
Point 4.
Has anyone got an idea on the cost of phase 3 ?
Suggest that a key point for us PI’s as Avacta may need a raise again in 24 months time ?
Any views anyone ?