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It’s going to be fascinating to see the Ingenuity total GMV revenue including 3rd party and margin on same next week and what is the contra charge to Beauty& Nutrition?
Coupled with guidance on Intangible capex for same/ ideally independent Funding

THG sort this and we have a big rerate, holds the key to MM fending off the activists

Good call before Moody
Somebody just came in and hoovered up the stock

Of interest to this BB as these 2 guys have the largest Short on THG

I may be wrong but it appears they are driven by known Data rather than a Human looking ahead ,not saying anything wrong with that but it does leave them exposed to
fast rotational shifts and left field moves by a Company,

Either way it’s a ‘ ballesy’ move on Nat West considering a big chunk is owned by the state, guess they ain’t looking at a Zero.

Point being, they need 21M shares to cover their THG short which we think is 90p average, these 2 guys look like they have a pair and it will need an ‘ event ‘ to dislodge them

‘Marshall Wace has built the biggest short-selling bet against NatWest ever recorded by the City regulator as fears about the health of the global banking system cause turbulence in shares throughout the sector.

Marshall Wace was founded 26 years ago by Sir Paul Marshall, 63, and Ian Wace, 60. About half the firm’s investment strategies are computer-driven and its bets are watched closely by other players in the stock market’

https://www.thetimes.co.uk/article/aa97855e-d7b8-11ed-80bc-e358583c5d62?shareToken=db31004b6502cb0120bbcc3955e78d3b

Rock, I have taken £70M top end but it could £65M ?
But it doesn’t really matter, it’s all about 2023 now

Hi Rock

Am taking £70M EBITA top end for last year but either way it makes no odds, 2022 is done.

We are up 50% last 14 weeks, guess you have to take a view on the next 20 weeks as the Golden Share expires and premium listing is announced, I am Long as you know but I don’t disagree the headline numbers won’t be pretty but the market has looked past it

Few thoughts

We had good & bad news same time re Q4 update

On the Bad side, they should have known about the £20M loss from On Demand in October but had just signed off the Banking Covenants, ditto we had £50M miss on EBITA, with a 5.5% H2 margin, put that into prospective, we would have had to generate an extra almost £1B in 12 weeks to hit their top end forecast
They knew that was impossible

Good side, they generated an extra £50M of cash - the banks would have seen the bank balance improving in real time - and that got them the very favourable covenant lite terms, the Bank excepted their forecasts, they couldn’t give one forecast to the Bank and another to the market
MM was being the top entrepreneur he is, it was smart business but a bummer for the share price we dropped 25% in a day or so

Suggest the market knows it’s a kitchen sink job off the new CFO for 2022 but the market looks forward, cost cutting continues £100M last year am looking for £50M this - they said £30M but advised brokers could be higher

Nutrition is running at 15% EBITA before Ingenuity cost
Beauty 7%, work the numbers yourself and deduct £5M or whatever you think prorated loss from On Demand add back cost cutting and we could see £25M FCF - when you put the numbers into a spread sheet it works

I could of course be out and they push through On Demand losses higher but think that’s more for Q2 - just looking at FCF

Full year EBITA ? Go with what’s on their web site, no idea on FCF intangible capex / On Demand losses etc … we won’t fully know until they update the Brokers

We are up 50% plus from December lows, the market likes the look of the new CFO

2.99%

2000 jobs went last year as part of £100M cost saving within THG - guessing many were blue collar as more robotics came into play

We know - because they told us - 30% of orders in 2021 were fulfilled by robots and they expected this to rise dramatically over the next 2 years

We may not see massive headline job cuts at THG but the attrition rate will continue as they learn to do more with less humans

Snap shot of recent high profile layoffs

Amazon: 27,000 employees
???Google: 12,000 employees
???Meta: 10,000 employees
???Microsoft: 10,000 employees
???Goldman Sachs: 3,200 employees
???Coinbase: 25% of employees
???Zoom: 15% of employees
???Glassdoor: 15% of employees
???Twilio: 15% of employees
????Indeed: 15% of employees
????LendingClub: 14% of employees
????Vimeo: 11% of employees
????Docusign: 10% of employees
????Salesforce: 10% of employees
????Gemini: 10% of employees

Suggest we are going to see the headcount reduce further at THG it’s now the norm, get used to it, the market wanted it

Hi Crowman
Take your point on the results in Jan - hands up the EBITA miss caught me out lesson learnt , said at the time didn’t see that coming after the October update

From a share price point as an investor the overall result is THG 50% are up YTD, been a good run although very bumpy and more to come this is far too cheap
As Canary says been a good week for THG Ingenuity

Agree Manc

MM is getting closer to having all 3 businesses generating
£1B plus a year

It’s nuts how cheap THG is

Golden it’s the global roll out of JV with effectively 30% upfront
and thereafter pay per item collect - we know it’s 30% as Autostore told the world

It’s this part of the JV that they have developed which is exciting, it’s capex light

The big difference for Ingenuity is the Capex element, it’s a pure SaaS /API offering

For ref

As Canary pointed out correctly yesterday they had already mentioned Matalan contract in January

We know from linked in Ingenuity went live with Matalan this week after 18 months development , that appears to be a big contract

8 weeks ago they signed a JV with Auto store to provide a API SaaS Service globally and 4 weeks they announced a JV with GOAT India to promote the above

Ingenuity CEO is pulling some deals together, the general market still not woken up to the fact and it values Ingenuity at $zero

The activists on the other hand …

It’s cost cutting / being more efficient with less, it’s what the market wanted and they flagged they listened in January and the markets getting its wish

No one wants to see people lose their jobs but it’s the way it goes, THG like many over hired and they are slashing everywhere - remember the big shiny proposed new office for £65M or something ? That’s gone as an example

Sorting the external investment for Ingenuity is the big one, they deliver that and they unlock shareholder value in the Core by default

Ironically we touched base on cost cutting this morning and job vacancies removed from Linked in etc - as per below

Closing On Demand was flagged in January as was cost cutting, more to come yet

News on Slashing intangible capex baked in

For clarity, this is what is reported

"We are also consulting with certain colleagues in THG Studios where, following the closure of OnDemand, we expect associated workflow to reduce proportionately. THG is committed to supporting all affected colleagues and, where possible, we will endeavour to find colleagues alternate roles within the wider THG Group."

Suggest HH is correct

OSG mute point but the £100M cost saving was for last year - was £20M net according to Brokers reports

£30M cost saving more this year but expected to be higher from core businesses via identifying duplication as part of separation of entities - this is bunce

On Demand is on top but comes with restructuring costs

Can’t see an MBO happening - how can the debt be serviced?

Premium listing
Ingenuity financed independently
Share buy back - maybe
More cost cutting
Separate listings including overseas

Steve
Guess they had to go through the process of identifying the parts to restructure so to speak

Always sad for the persons involved but for shareholders cost cutting is welcome

Lots more to come, Intangible Capex for example