RE: Goldenyears17 Apr 2023 10:33
Hi Golden
My helicopter view - based on broker reports before we entered close season
Nutrition is running at 15% EBITA
Beauty 7%
We will find out tomorrow what comes off that for Ingenuity now it’s a separate entity
Pure guess am going for 200pts each division - 100% guess which could change below that’s my risk
Work on blended 6% annualised growth - not brilliant but it doesn’t matter today
Ingenuity - stand by my call in January, needs external capital, am not convinced on the merits of pumping all your FCF from above into a low margin GMV model, the intangible capex is massive, look at Ocado / Shopify, it’s nuts the amount of money required
However as a standalone entity with its own funding I think it’s very interesting but not in the current structure, THG BoD know that as does the market
Nb Look past On Demand it’s gone , both these items will be dealt with
Ok point being, the Core can generate £150M cash and have no rent of note - someone else’s problem being an independent Ingenuity
I would drop £50M a year to pay off debt - let’s assume £160M sometime 2023
You have £100M free cash a year to reinvest, within 36 months you have £150M cash no debt no rent no tax up to £2B of losses - bit of juggling to be done on the tax losses but there will be a way forward to max
That’s a cash machine and that’s what Sparta /their ilk can see
The smart money saw this back in December, as such we are closing in on 50% up YTD
Spin off Ingenuity and you unlock share holder value
Don’t disagree with your breakdown below but I think your focusing on the past not the future, appreciate your input on the BB btw
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