Member Info for Okehurst1

Steve
We can’t keep up with demand from Iceland by the look of thinks

Stand corrected but picked up data saying 18% of THG beauty was own product?

Snippet from post today, definitely value in THG Beauty

‘To maximise payback on these investments, Myprotein also produces products for other brands, even brands like Mars. This is common at THG, selling our expertise to 3rd parties. THG Ingenuity was created on this principle. Many wouldn’t know that THG Beauty makes countless products for well-known global Beauty brands, both from the UK, but also in the US’

Nb no finance cost and Beauty would be doing £70M profit, has to be worth 20X EBITA and this after paying for Ingenuity services as well
It’s a decent business

Ste
In a tough market Beauty grew 6% last year, our EBITA margin is 7%
We have USA coming on line this Quarter

We may see the EBITA margin drop to 5% when we see what Beauty pays Ingenuity but of course there will be limited rent post EBITA

Take that on £1.3B rev and a platform to build on, scope to get this up a tad agree that point

Thanks for sharing Bonkers

Good post Hosia and fair comment

Hi Steve
You know I was very vocal after the last trading update - felt I got mugged by Moulding and the incumbent CFO at the time but I’ve moved on

The new CFO is getting a fair hearing and saying the right things to the brokers /II’s
we are obviously now in a close period and he can’t divulge detail, he is reiterating under promise / over achieve is his way.

Logic would say without a Whale contract we won’t commit to the intangible SaaS - not £80M - so Q1 FCF could be quite decent and net Debt down to £135M if the property sales complete on time
Under IFRS we need completion not exchange

We also have another £30M of cost saving identified and possibly more to come

Add full listing with Golden share gone in 26 weeks, find a solution to fund Ingenuity and we are away, it’s close to the rerate

Hi Pearls / Steve

Steve agree correct with gist/ breakdown

I would counter;

The CFO has guided before we entered close season and the brokers £views are posted on the THG web site

As regards FCF, we had £50M FCF + Q4 2022
without the £80M capex into Ingenuity assuming the whales deals are not happening yet then we could IF the property deal completes - as Steve points out - achieve £65M FCF this Q1 as well, it’s possible
In theory we could bring net debt down to £135M

Don’t forget on zero debt we eventually save £60M a year on the coupon

Nb no need to regurgitate in depth, THG is highly cash generative it’s the funding of the intangible capex for Ingenuity that needs to be sorted and this share price will
fly, we will all make money at these levels

Hi O/P

Feeling a bit of confidence in the new CFO, if he thinks there is a business within Ingenuity then personally I think let’s see how he funds it?

If Ocado are £5B and Ingenuity £zero there has to be an angle ? I just don’t want THG to punt all our free cash on this division - we need to reinvest in Nutrition / Beauty and pay off debt and save £60M a year interest payments

Whichever way it’s done get Ingenuity self financed and this share turns around, it’s all down to that one task alongside full listing, everything else in place

THG SPAC Ingenuity, the Core gets the full U.K. Sept this year, On Demand will be restructured, the U.K. business could do £140M EBITA after paying Ingenuity
for its services

No rent to pay
Pay off debt of £160M that’s an extra £60M cash ( 36 months out )

Our EBITA is our bottom line profit and no Tax to pay for years and we have ‘carry’ in the SPAC via a dividend in species to THG shareholders

SPAC ingenuity and you unlock THG shareholder value

Hi A/S

Am happy to discuss £finance / ideas around THG ,be challenged, no issues with Ste.

Apples with Pears in many ways but the new Autostore link up allows THG to target a market that is underrepresented in terms of suppliers

The intangible Capex is nothing compared to GMV model
we basically manage the API’s between all parties
pure SaaS play via a UI, it’s a nice model, high margin

Posted yesterday on Dan Wagner moving his latest tech platform into a USA SPAC
raising £250M on no revenue ? Valuation $Billions

If Ocado are £5B and Ingenuity are £zero there has to be value via Ingenuity doing same on £2.2B GMV revenue and new JV with Autostore
new funds build out the SaaS Platform

Hi Ste

Yeah … 26 weeks and we are equal playing field

Expect THG to announce full listing preparation underway, its happening, will be in line of Golden Share expiring - takes up to 6 months
we will hear April update

Difference between Ocado and THG although revenues the same

THG generate £2B and could make £180M EBITA as a D2C Food Producer and Beauty platform , Ocado won’t make positive EBITA for years if ever
we made £50M FCF Q4 we could do £65M FCF Q1 2023

Ocado produce nothing and deliver other people’s products

They have Robot Tech ,we can now sell Autostore robo tech to 3rd parties PAYG

THG £m/cap £800M

Ocado £m/cap £5B !!

THG CEO has a Golden Share that runs out in 26 weeks

Of interest tomorrow

‘Ocado Retail, its 50-50 tie-up with M&S, providing the bulk of revenue for the business, has already unveiled its fourth-quarter and full-year performance, which ended in November. Fourth-quarter sales were broadly flat at £549 million, taking the full-year total to £2.2 billion, down 4 per cent year-on-year. Average basket value will be watched closely for any signs that people are becoming more confident about their finances. For the last quarter, it was £117, down 1.3 per cent year-on-year.

When annual results for the year to the end of November are announced tomorrow, analysts are expecting revenues to reach £2.6 billion, versus £2.5 billion in 2021. They are predicting a larger pre-tax loss compared with £177 million a year earlier.

Through its technology division, Ocado licenses its robotic warehouse technology to third-party international grocers’

https://www.thetimes.co.uk/article/4f8b6c52-b481-11ed-bc64-f71663a88018?shareToken=7dc6eb1180f5915420f4c587966be9ef

Hi Golden …

Oops Contd …

The muscle-bound tycoon, 51, revealed in a post on LinkedIn last week that he used to be hooked on the stuff. He would drink four or five triple-shot flat whites each day. That was until THG, the beauty and health retail empire, formerly The Hut Group, floated on the London Stock Exchange in September 2020 with a £5.4 billion valuation.

After that, his caffeine addiction hit new heights. Moulding said he began drinking 10 triple-shot flat whites to keep him going, confirming to his followers: “Yup, 30 shots of caffeine each day.” No wonder he’s been lying like a starfish on cold floors.

Thankfully, THG’s new in-house GP has been on hand to help. Dr Ishrat suggested Moulding have monthly check-ups “given the obvious tough ride I’ve had in the past two years”. She discovered he had high cholesterol and he cut out coffee to see if that did the trick, and it did.

She might have helped Moulding, but sadly for investors, Dr Ishrat can do little to cure THG’s share price, which has plunged 89 per cent since the float.

How many coffees is your limit? Two? Three? Maybe four? For THG’s Matt Moulding, that’s nothing.

Sunday Times

Controversial dotcom entrepreneur Dan Wagner has received a boost after his mobile shopping company secured a $250 million (£209 million) funding pledge for its planned $2 billion float.

Yorkville will provide up to $250 million in equity funding, which can be drawn down over three years after the Spac deal completes. The size of Yorkville’s stake will depend on the share price at the time of each drawdown and the timing of them.

https://www.thetimes.co.uk/article/dan-wagner-raises-funds-for-2bn-rezolve-spac-f682g6qcz

Who would buy 20% and have no control as the Banks will have a first charge on the nutrition / beauty business anyway? It won’t happen unless substantial equity cash to pay down debt

We will soon see the detail for Ingenuity numbers
If it’s viable raise money for the business - currently valued at Zero
That make perfect sense

Don’t think the II’s will let Moulding nick this for £1
That’s not going to happen

Unless Qatar boys stump up a cash deal can’t see an MBO happening

THG can’t carry the debt burden

Intrigued to see what Kelso propose?