Member Info for Okehurst1

Moulding is obviously a good accountant - that’s his proffesion / trade
and he’s top entrepreneur

The issue shareholders have today is that he’s not engineer - like Musk - and doesn’t have the skill set to spend £100M a year on a SaaS platform in a division making £2M a year

It could be argued that the Ingenuity CEO comes from Salesforce and he knows how to build a platform ,if we go back to Musk he sacked 75% of the staff at Twitter as the company had too many engineers, in fact we are seeing big tech downsizing / shedding engineers in the USA.

The worry has to be THG commit to building this next level SaaS platform, Moulding is out of his depth - he is not a tech entrepreneur/ engineer - everything is then resting on our man from Salesforce to make the right calls, he also needs to focus on Sales - we don’t have any of sales of note inside Ingenuity generating cash - another black swan hits THG like whey goes to €1400T and THG has serious problems, we saw that in 2022

Moulding ain’t Musk and he needs to be stopped punting £100M a year on SaaS of THG cash on a blue sky business generating 1% EBITA - not against the concept just ringfence THG shareholders cash / derisk

Still no sign of the whales, suggest it suits us, the good Lord will be asking the same questions above and suggesting find another way

Dp
It was a bonus

He would have had to have been awarded the £800M as a sure thing
It wasn’t at the time

He then gets the shares in lieu of cash (£800M)

I would look at his property interests - how he funded

£20M rent print , put a 6% coupon on that, LTV 60% the 40% is Matts
Borrow against that asset ,tax relief on the Interest

Reckon Moulding wanted control to get over 20% that’s been his game plan plus he may not have thought the share price would drop so much

Look at Elon Musk .. gets paid a bonus in Tesla shares then sells Tesla shares to pay the tax when due

Charitable donations can be used for the year in question

Remember Moulding had a loan with THG he had to settle

Moulding is domiciled in the U.K. not a non Dom

Doesn’t matter what country he gets a bonus paid into he has to pay tax in the U.K.

Ovs if he resided in Guernsey he would pay tax there, 20% up to 750k then 1% thereafter last time I looked

You can’t get rollover relief when it’s a bonus - it’s not CGT it’s PAYE
Also attracts PAYE on the companies side

Otherwise every quoted director in the country would get paid in shares, dodge paye themselves and the company ( avoid as well) then sell the shares for 20% CGT not 45%

Different if the company bought a qualifying asset off a director but even then rollover relief is firm has to be a capital asset in this case Moulding got a bonus

Bit of trivia but back in the 90’s there was a loop hole to be paid in napoleon sovereign gold coins, then sell the next day although it was done overnight by a broker , avoid PAYE both sides … the Treasury went nuts and the Government rushed through legislation that stopped all schemes of this nature

Steve, agree with you on a lot but to be balanced they played the customer protection side right and now they are knocking out 60% GP - Tbf they called that

Ryan, unless your a Moulding Maxamilist, don’t think many on this board would disagree with you, Moulding can’t be trusted we know that, he’s gone back on promises, he can’t even forecast profits with 7 weeks to go - if we come in at £70M EBITA and he gave us a range up to £130M it’s a big difference in 49 days of trading
let’s see when we get full year but it’s typical game playing by the man

I do agree with HH I don’t think is a big concern for the reasons discussed, however it’s actually indicative of THG governance that’s it’s on our radar

39p for a large single line trade was a steal
Especially within a week he announced the £600M refinancing deal was complete / agreed with same terms and covenant lite

Maybe QIA are just super lucky and so is Moulding and he had no idea it was being worked on by the FD

Hi Canary

It’s in QIA interest to take the rump of the 39p, Moulding nicked a few of course but they did very well on the trade - on paper

It was interesting that non of the other II’s got a sniff ? Where they asked ?Who knows?

I can only work on data / numbers / information, each to their own and it’s good this BB is open to all views, I always read your posts with interest.

We have little to no head room if Whey shoots up and it’s actually quite scary when you look at THG logically - study the numbers and consider the risk factors

This is why THG has been in ‘ therapy ‘ with the majority shareholder so to speak, Moulding could bring the pack of cards down IF the Bod back him just because he has a Whale or two for Ingenuity

No way would any sane BoD actually back him on this point, if they did the lunatics will have well and truly taken over the asylum

I think this is the delay in announcing the £1B and it’s why Moulding could well have an ace up his sleeve(equity sale ) or it’s plan C all else fails, they spin out Ingenuity and raise $ same time

Nb forget to add

Less the £20M On Demand losses have to come out that £80M FCF but this year we have buildings getting sold for £40M

Know I keep banging on about it but from what I can see our biggest concern should be Moulding punting £100M a year for the foreseeable on the SaaS platform that we won’t see a return on for years - Ocado style

If we had the $cash from an equity sale that’s fair enough but we know for 2022 that if Whey jumps back to €1400 then THG has serious problems, who knows what’s around the corner - we learnt that the hard was in 2022

We need to make Hay so to speak, pay off debt £40M a year and invest in the core businesses generating £160M to £180M EBITA year - especially this year as we don’t know what the restructuring costs will be for Ondemand and let’s not forget we are still losing almost £2M a month from this £400M Revenue line

To recap … If we generate £160M from the core

£20M goes to Moulding for rent
£60M finance costs

Leaves us just £80M FCF before disposal/ tax rebate

All that is getting chucked into a black hole, not to buy buildings but for SaaS to satisfy what the Ingenuity Whales want

Ryan
Moulding would be sued personally if he tried and he will lose ,he’s already been in therapy with the II’s as they are that annoyed with governance and to boot he’s got the ex head off THG Institutional Relations setting up an activist fund

He would be kicked off the BoD for sure if he tried plus and just as importantly it doesn’t stop the 70% majority selling a subsidiary, he knows all this .

The GS will expire doubtful he will give up beforehand

100% it’s gone check out listing doc

HH posted

As I say Nutrition is a gem, heading to $1B rev with 15% EBITA
Would argue this is worth £1.5B to £2B standalone

Beauty could well be in same bracket

Bin the vanity stuff, find a solution to fund Ingenuity and we could unlock serious value there when we read across to Ocado valuation / GMV pro rata

Steve
Restructuring costs,( on demand ) THG love a single line right off, just look at accounts, year after year

Plus every month we are losing £1.7M from On demand / other till we exit

Put into prospective we lose more in 6 /7weeks from the £400M revenue line of this group than we make in 1 year Ingenuity £2M EBITA

Hi Steve
No guidance past 2023 that was reliable was view

£131M EBITA 2023 but guiding £120M bottom range
FCF minus £10M to Neutral

It looks like On Demand /Other restructuring is big un known
Ditto the Capex for Ingenuity SaaS .. heading to £100M
Crazy print when GMV is 1%

The core 2 business’s are decent, Nutrition a gem

It’s just that annual £100M into Ingenuity that’s my worry / concern
Ingenuity made £2M EBITA last year - that’s it !
Worth reiterating… this £100M a year doesn’t really help Nutrition / Beauty it’s a pure punt on the SaaS element for the Whales

There may well be value in Ingenuity look at Ocado

They just need to find another way to fund rather than Bath the cash from the Core
keep saying it imagine what Nutrition could do with £100M a year or even £50M - pay back debt as well

Hi Steve
I wouldn’t take too much notice on fractional increases from II’s be that up or down on the Shorts, it will just mirror their risk management strategy going long

The macro is driving the market now and the Quant players are exposed and that gives us PI’s a chance to front run where the market is going - get in early before the big $$ on the sideline has to join the party

I think a lot of the big player II’s thought H1 was going to be horrible H2 better and they were sitting back turn of the year, the rally has been painful for them to watch now they are having to join in and its heaping the pain on the Short only players

THG is starting to go through the same micro process, put aside THG restructuring- which it will , it’s already in motion - full listing / index funds coming on board, todays price circa 60p give or take a few pennies is as good as it gets for them, downside could be 3X from here

Nb THG been doing one on one’a with insider II’s and choice houses providing guidance, I dropped a post last week on the Citi numbers, I’ve seen 3 reports now all pretty much the same ,although after what Moulding did yet again last time round with guidance am not sure the market trusts what he says, the sooner he goes as the CEO the better he’s a liability in that role - top entrepreneur ,terrible quoted plc CEO

It’s gunna be messy getting out of THG and banking the profit for the Shorts

The Quant boys especially, once the index funds join the party even more so.

‘Hedge funds wrongfooted by a sharp surge in stocks this week rushed to exit losing bets on falling markets at the fastest pace in years.

Equity markets have risen sharply so far this year, led by many of the speculative stocks that were clobbered hardest during 2022’s global sell-off. Many of the funds that profited from the rout have found themselves poorly positioned for the rebound, which has recently accelerated as investors sensed that interest rates were close to peaking in many major economies.

The resulting flurry of short covering — when investors buy back stocks they had been betting against to limit their losses — was the largest since November 2015, according to a Goldman Sachs note to clients seen by the Financial Times.

The scale of hedge fund buying, which helped fuel a 3.3 per cent jump in the Nasdaq index on Thursday, eclipsed that seen in January 2021, when retail investors co-ordinating their actions on forums such as Reddit sent the price of GameStop and other meme stocks rocketing, inflicting huge losses on some funds.

Funds closed their bets primarily against US stocks but also against European companies.

Bets against stocks that had previously been falling for a long period were “under MAX pressure”, Goldman wrote in a separate note on Thursday seen by the FT.

“We saw [an] explosive move higher” in software stocks “driven by consistent hedge fund covers [short covering] all session,” it added.

The bank estimated on Thursday that quantitative hedge funds lost around 1.3 per cent that day, their worst day in more than six months’

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

Good point on the trust re the transfer but he was awarded a bonus personally as an employee, not sure he could have got away with zero tax as it would have fell outside
an approved HRMC scheme

As such income tax applies, he doesn’t pay CGT on any sale of the shares up to the purchase price - he’s paid £800M for the shares in affect

Nb imagine every director would try this one and avoid tax completely
Build up their shares and then take the gain offshore for nil tax on the gain