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Steve, it’s happening

Your spot on Rock

Sparta are taking everything that’s thrown at them, good battle being waged behind the scenes

Sparta TR1 RNS this week/next
they are accumulating

Not sure on the timeline after passing 3% we get the TR1

Knowbody, good summary, agree all points

The market works on cycles

Interest rates look like topping out and start ups are going to struggle to raise capital at this stage

THG Nutrition & Beauty are profitable manufactures and sell via D2C, they use Tech but don’t sell Tech services

Ingenuity however do, the Autostore JV is potentially a smart business model

It’s going to be tough gig for a start up to raise the funds to build the experience / Platform Ingenuity have built up over the years.

As big tech share prices improve the market will eventually look at the next tiers down to chase value/ opportunity, as we know it’s how it works.

Suggest Ingenuity is at series D level, the market will soon see its accounts/ margins as a standalone entity and it will be in a position to raise its own external revenue based on how they are presented

THG then unlock the value of Nutrition & Beauty and they have a ‘ carry ‘ on Ingenuity

It’s why am Long THG

Chaos in the US banking sector has caused historic swings in bond markets this month and prompted the Federal Reserve to ditch plans for more rapid interest rate rises.

But judging by moves in Wall Street’s flagship stock index, the crisis appears to have been a non-event.

The S&P 500 is flat so far this month, and volatility indicators suggest investors are not expecting wild swings in the next few weeks.

Part of the reason for the quiet, according to Goldman Sachs Asset Management’s Brett Nelson, is that many of the people who were liable to dump stocks in a crisis had already done so. The S&P 500 entered a bear market more than nine months ago so, by the time SVB collapsed on March 10, many investors had already scaled back their exposure, reducing the likelihood of a further exodus from the market.

“This bank crisis began with the market already in a double digit drawdown?.?.?.?People are already at a base level of equity exposure, and you need to own something,” he said.

https://on.ft.com/3TMY6DA

Would THG retain more of the upside potential by raising external funding for Ingenuity? What £value would a whale place on an equity stake in Ingenuity today?

MM then builds his third $B business and retains control he’s come too far to sell it outright just yet ?

Goodtime, correct

This will be attractive to Sparta /others, externally finance Ingenuity and net debt eradicated 2024/5 and EBITA is pure cash with no tax until the £2B threshold is hit
With Corp tax increased to 26% it’s even more appealing

Goodtime ,correct re how the market values the cash on the balance sheet

Our enterprise value is currently £1B
£m/cap plus debt, however we have £2B plus of imbedded tax losses and it could be argued we have £500M of tangible tax losses and our true enterprise value is valued today at only £500M

Good time, I would go with the median broker view which is around £120M EBITA
less rent / finance of £80M

Property disposal of £40M hopefully and combined FCF of £80M before intangible capex

Variables:

Restructuring costs / operating losses of On Demand
Further cost savings over and above the £30M earmarked

Nutrition & Beauty EBITA margin post paying Ingenuity will be interesting to see, we then get a better understanding of their £value

Oops messages crossed

S/B 100% agree and everyone makes money

Good time, not sure re Gambia

Goodtime,

100%

Goodtime

I really hope THG can externally fund Ingenuity as you say and MM builds a 3rd business generating over $1B a year - Nutrition almost there
Full respect to the man as an entrepreneur

Put aside the technicals like premium listing / Golden Share, solve the above and we unlock shareholder value and MM without doubt stays in control as the share price will rerate and everyone wins.

I may be wrong but I think they will continue to trim Intangible Capex until they find the solution and as a result increase FCF above current market expectations and pay down debt, with the GS gone in a few months time is tight but we know MM has the ability to pivot commercially

Hi Crowman, how you doing ?

Not too sure? Know it’s worth diddly squat, would rather make $$ than a badge, but hard to do all the time

Wonder if the Sunday Times update this weekend ?
Guess their reporters have cashed in their Shorts

Will they run up to 2.99%

Then have one good run at it ? Load up as much as possible and max the limit on a TR1 RNS ?

Once the market is officially aware it’s Sparta it’s going to cost them more?

You can see why the likes of Sparta find THG so attractive

Net debt could be close to being eradicated end of next year - we know how

£160M to £140M EBITA between Nutrition/Beauty

£2B of tax losses

It’s a cash machine

I would look at Nutrition as a ‘ whole ‘ and focus on EBITA margin

EBITA margin before Ingenuity is approaching 15% due in part to reduction in Whey

Even if we trim a tad we could still see 12% to 11% after Ingenuity costs

Worth noting, Ingenuity will pay the rent on their leases

MM’s linked in post last week on THG Beauty was helpful

From an entrepreneurial point of view MM has done an amazing job getting THG Beauty to £1.3B of revenue, if this division was listed in its own right it could be worth more than the current £m/cap

It will be interesting to see it’s EBITA margin after paying Ingenuity for its services, I am punting at 6% to 5% - after Ingenuity

Casanova very heavy on the Offer again today as they have been last few days as we spiked 20% from low and strangely on the days we spiked 25% a couple of weeks ago
It may be a coincidence but they may be working for a large single client, they are not normally on the Offer to this level

Re Sparta
Betaville / Sunday Times spooked them and they brought forward their buying this week looks quite feasible

Personal view, am expecting further blue by COP tomorrow, Sparta need 41M shares to reach the threshold, it’s just will they break out and go above the 3%? And if so when ?
Based on their track record they tend to go decent size and then drop the open letter, their 100% success rate is impressive

Throw into the mix Betaville think there may be other USA funds out there wanting a piece

No idea how the index funds will pick up 70M shares -put aside the Shorts - when we see 20% share price movement when any buyer tries to get size of note

It’s certainly getting interesting for us Longs