Member Info for Okehurst1

Hi Golden

Ingenuity does have an international footprint which is helpful for it to manage overseas stock, this being real estate / robotics in place etc

THG will invest another £15M this year in robots - according to Broker reports

That’s all positive and there may well be a market albeit at 1% GMV but we don’t have stocking costs, that’s a big factor.

It’s just the technical level of the SaaS Platform to satisfy the whales, back to back contracts coupled with an external funding package and Ingenuity has a chance to succeed and we will enjoy a part Ocado style valuation against this business based on GMV pro rata , I suspect a discount due the start up nature of Ingenuity’s new model

Don’t we have a lot of data centres as well?
Can only imagine how much energy they burn through ?

Crowman
We are down to this one big point now

Funding the Whales requirements and where / who are they ? Pivotal moment for THG shareholders

Nb always the green box to avoid my posts

1 pencil
You have to judge me on my posting history, you know am long , fully understand your hesitancy on this one - I did get caught out with the On Demand £20M hit didn’t see that coming, as such doubled down the research, just trying to help this BB

Yeah and still no RNS or a leak anywhere, even from a so called Whale
£1B is a big print , it’s 50% increase in revenue the way THG report.
Surely that’s RNS able ?

Ste
I’ve not seen a price on those assets you mention and will Moulding want a sale ?
It affects his coupon price and his lenders may devalue and he has to top up ?
No idea what his personal covenants are on the real estate

Moulding selling a piece of Beauty probably works for all parties

Let the the THG II’s play this one out alongside John Goold and his investors all putting pressure on our Chairman

Lord Allen ain’t daft, he knows Moulding wants the SaaS spend as it gives Ingenuity the opportunity to grow and he gets a better coupon price on his leases than if it was say a standalone Ingenuity but there is big risk for THG punting that cash as it has no FCF at that point

Lord Allen also has to consider the £20M losses from On demand and the costs to exit

Reversing Ingenuity into a Nasdaq quoted SPAC has to be one of the considerations?
Mentioned last week, like Lotus raising $288M on a $5B valuation via a SPAC

Saying all that, Moulding sells a piece of Beauty, repays debt , funds Ingenuity that could work for all parties as well ? THG does have options

1 pencil
You have to do your own research at this stage

I’ve given you the information - the important bits

Believe or don’t believe or contact Citi if your a client and get a copy or contact anyone of the big THG shareholders and ask them can you buy a copy of their report if you don’t have a relationship with any of them

Ste ,

That’s were it’s going if they don’t raise ££ one way or other

Moulding is a smart boy, I wouldn’t bet against pulling something out the hat or listening to John Goolds ideas

That’s it Ste … cost of coding

Fix the roof when the sun is shining, pay down £40M a year of debt over and above this years £40M from asset sales and balance into core businesses after of course the cost to exit the £20M a year loss making business
It’s going to cost to restructure

2026 debt repaid that’s an extra £60M a year net operating cash flow

Ingenuity would have to add £1.5B every single year to get £60M in 4 years
It’s doing £200M GMV today standalone

Bin the rent from THG - THG pays a fee to use Ingenuity like anyone else
And we have £80M extra cash on top - split away Ingenuity / self fund
Our EBITA is our net profit cash wise 2026

Makes so much sense?Who could argue against that ?

Only Moulding, he currently has THG on the hook for the £20M rent roll

You can see why Lord Allen is digging in.

Ingenuity needs to upgrade their SaaS platform
It’s not good enough for Whales requirement

Hence Ingenuity didn’t grow last year - Ingenuity Commerce hasn’t worked commercially as well

Our margin on GMV is 1% but we have no opex risk -other people’s stock

Citi have a good note try them
Plus if you can get a copy the big II’s
All in there

Broker reports comment on what it’s for, it’s SaaS, Ingenuity has to upgrade otherwise it can’t grow, it made £2M last year that’s it on £14M growth

Don’t think the market is against the idea of the SaaS investment and as a little PI am all for it but I want someone else to fund the risk, not THG shareholders

Different if we didn’t have £200M debt (£160M debt after disposals ) and ditto other divisions losing £20M and we had FCF + to invest in nutrition / beauty and our cash flow is heavily reliant on the price of Whey staying low ….but we don’t have that luxury

1pencil

5% a year on capex - they told us
Via one on one with Brokers - in their reports
Ditto the 1% GMV margin
It’s all on SaaS for the Whales - think Ocado style spending to improve the platform to satisfy the whales

It’s one big punt and we don’t generate any cash back for years
it’s not for real estate or Robots it’s SaaS and Beauty / Nutrition don’t get a tangible benefit

The point I was making - hope it helps fellow PI’s - it’s not a bad thing we have no news, THG won’t sign contracts without having the ££ funding sorted, Moulding either sells equity or he agrees to alternative funding, whatever that entails and am guessing driven by John Goold and his crew

… but use other people’s money to fund the punt
That works

Not saying it’s a waste of space
Saying don’t punt £100M a year on SaaS for whales using the FCF from the profitable business
Especially when you have £400M of revenue -on top - losing £20M a year and we could/ we don’t know what happens see Whey shoot up again
Not saying the latter will but we have to be aware

Don’t use /punt the £100M utilise to pay down debt / fund the core

Use someone else’s money for Ingenuity SaaS and we pay our market fee to ingenuity

Hi SB

Am long here as you know and I am respectful of what Moulding has done as an entrepreneur but Ingenuity hasn’t worked as a concept, put this into numbers
it grew 7% last year but that was GMV revenue, worked out at just £140,000 ish extra EBITA

THG spent £150M on capex in that year, says it all

The BoD won’t/can’t sanction yet more $$ into a black hole, focus on what we do best
Nutrition ( gem of a business ) and Beauty, bin the rest.

Find a solution to fund Ingenuity there could well be value there as an investor look at Ocado, just don’t use /punt our ££ on the bet, let’s pay off a bit debt each year whilst the sun is shining and reinvest in Nutrition especially

Utilise the £2B of tax losses for years to come/ pay no tax on the profits, 36 months from now settle the fixed loan, our EBITA becomes our net cash at that point - we won’t pay rent of note to Moulding we will pay our net 1% GMV to Ingenuity same as other clients do so the cost of that comes out before hand , if that makes sense

Even a die hard Moulding maximalists can see the above / below debate, he risks THG betting the ranch, no need to do that … find another way to fund

Hi Ryan

Lord Allen is slowly asserting his position, the II’s will be on his back - we know they are THG entered into arbitration/ therapy with the II’s

Fiduciary issues are driving this one for the Chair and non execs, Iain Mc will just don what Moulding says but Moulding doesn’t have the full BoD anymore

As such Moulding can’t force the THG the company to punt £100M a year on a SaaS platform, this won’t be a one off cost, it’s on going look at Ocado !
Whey hits last Aprils price - doubtful but it’s a risk factor - and we have no FCF of note
we then use debt / cash it’s not smart business

Might suit Mouldings ego / and his £20M rent is being invested in indirectly doiesmt work for the 70% balance

I would argue it’s not good for the employees across the group either, it’s an unstable situation, they need to know the investment into Ingenuity doesn’t bring down the pack of cards on their heads

Know am banging on this point but it’s thee issue in THG today - £100M a year Sass Capex into Ingenuity that generates £2M EBITA but pays Moulding £20M a year in rent

No news works for us at the moment, let them find a way to independently fund and THG share price rerates

Reverse into a Shell SPAC or alternative funding for Ingenuity via equity sale and THG pops or don’t do Ingenuity bring it in-house utilise the £100M FCF on the profitable core

It’s win win for us PI’s sit tight, let the big boys fight it out, either way Moulding won’t get his £100M a year without one of the first 2 happening

Ste, it’s actually good news the longer this drags on, either Moulding finds a solution to fund Ingenuity or THG won’t sign the contracts

Hey presto John Goold pops up and his consortium have a shell ready to go or Moulding sells equity

Algo, agree.

THG is a tidy holding Co with Nutrition / Beauty doing £2B a year

Especially once On Demand / other gets binned including the planting trees business, data centres, health club, Zizzi , Hotels , selling used kit, this bag are costing us £20M a year plus management team - that’s something we can’t afford

If we have to pay an ‘ influencers ‘ hotel room just rent one for the night, no need to own 2 hotels other than pay Moulding his rent on the real estate