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Stan

To be fair, Fitch are not interested in the share price and equity holders like the brokers you list below

I agree with your comments about stock brokers btw

If you notice Fitch talk about what the assets could be sold for to recoup the Bond holders their money and we can guess insurance companies who insure suppliers to THG are themselves influenced by Fitch

Mentioned a few weeks ago, personal view, I think the £60M from MM plus external funds alongside the restructuring of the debt using cash on the balance sheet was the right thing for the company but not for general shareholders as it secures MM’s control of the business and it’s almost game over for us shareholders once he gets this cleared at the AGM, it’s going to be difficult to dislodge MM or secure a hostile Bid for the business and know MM can’t lose control or Ingenuity is under pressure

Us PI’s either hold out and hope a white knight possibly Frasers make a move, with or without MM’s support before the AGM and block his plan

Or if he wins sell or put lthe shares in a draw and hope MM changes his ways, whey falls in price and stays lower and Beauty bounces back

Btw did you notice Fitch mentioned no dividend in 2025

We can guess they spoke to the company, plus the FCF is what

£37M ?

We all have our views on this one;

Either Ashley thinks THG goes lower so he will wait

Ashley thinks he’s bathed on his £50M and he’s not risking any further $$

Ashley had ‘ joined ‘ with MA via a concert party to carve up THG and he can’t legally buy more shares in the market

Ashley is MM’s new Bessie and he’s comfortable being £Millions down as long as MM is happy and he’s ok with MM pulling his pants down alongside everyone else

Take your pick

I suggest the business model just doesn’t work in relation to funding a big fixed global costs …. Ingenuity

And financing above selling a product (Whey ) that is a commodity

Ditto be that lipstick or vitamins

The BoD of THG Plc need to remove Moulding and uncouple from Ingenuity, shareholder value is being destroyed, there is value here but it’s evaporating

THG plc has been left with £400M + debt liabilities all to finance the failed business model of Ingenuity that generates just £180M of external revenue, it doesn’t work without a mug funding it … THG shareholders are last mug standing

This is a remarkable forensic insight

Worth taking this in

‘Over the past four years, THG has classified £631m of costs as adjusting items—equivalent to 153% of the group’s cumulative adjusted EBITDA (£412m) over the same period. If we break the adjusting items between impairments (which are often linked to disposals and involve accounting judgements) and others, the other adjusting items over the last four years have also added to a material £227m, which still represents a significant 55% of cumulative adjusted EBITDA’

Stuff that has come out from the Annual Accounts this week is bordering on misrepresentation within the demerger document, it’s quite serious.

The BoD should ask Moulding to stand down or be voted off

By sharing this info it will help shareholders evaluate whom they vote for at the AGM

The large shareholders must be looking at this and thinking enough is enough ?

It’s either;

The BoD kick MM off the Board and bring in a 3rd party forensic accountant to open up this bag of worms especially around the tender process of the 20% top line slice

MA goes to 30% and calls EGM to action above and kicks off the dodgy Lord and MM

MM takes Nutrition private and funds by selling Beauty

he cuts a deal on price of the latter to retain a supply deal with the buyer THG shareholders short changed as they get a reduced price

There is no way the THG business model works in its current guise, it needs to be able to negotiate cheaper services even though it may lose same day deliveries, the business is basically an option of the price of whey and propping up a distribution business that is insolvent without its business / revenue

Glambia 16% margin

APN 29%

THG Nutrition 6%

What’s the common denominator?

THG pay Ingenuity 20% top line rain or shine and £22M rent

£12 a parcel average ? - not done the recent calculation ?

That’s where the cash is going, the business model doesn’t work it’s obvious

He concludes:

The shares trade at 0.6x 12m forward EV/Sales and 9.5x 12m forward EV/EBITDA. On our forecasts, the 2025 FCF yield is still very low at 2.4% but improves to 13% on our 2026E forecasts. While there are a number of positives building, we continue to see risks around the recovery of the Nutrition margins which depend on the timing of new whey capacity landing, and also the group’s exposure to the US where the consumer reaction to inflationary tariffs could derail growth. Given the company’s tract [sic] record of missing expectations, we retain caution and stay at HOLD, but lower our TP to 26p (from 36p) to reflect the increased risks.

A target of 26p is already above the current level, though for anyone thinking that suggests value, the longer-term trend might be worth noting:

THG joined the FTSE 250 index in March but it’s currently the third-smallest constituent by market cap, and is below the threshold for automatic relegation. If that remains the case on the next review date, May 28, it’ll drop into the Small Cap index.

None of this would be of great concern if THG delivered cash. But THG’s cash outflow last year was £88mn.

The idea behind its disposal in December of Ingenuity, the loss-making online marketing and logistics division, was to reset the business around its slower-growing but profitable nutrition and cosmetics operations while bringing debt down to manageable levels. However, excluding Ingenuity, 2024 group free cash flow was only just neutral at £400,000.

THG asks investors to also exclude one-offs, which is how it arrives at an underlying-underlying hypothetical remainco cash flow for 2024 of £21.6mn. Problem is, underlying-underlying hypothetical cash flow doesn’t pay the bills, which remain high even by management’s preferred measures: gross debt of £400mn at the 2024 year-end was equivalent to 3.8 times adjusted remainco Ebitda.

Cash flow improvement this year relies largely on whey prices easing. It’s a bit of a gamble.

The performance of nutrition at THG seems to get buffeted by whey costs much more than at Glanbia, a London-listed peer, says Panmure-Liberum’s Brown. Some of that may reflect disruption from a recent rebrand of THG’s Myprotein and some loss of competitiveness in Japan due to sterling’s strength against the yen — though, again, investors may think twice about treating these factors as one-off.

Glanbia’s protein shake division shrugged off record-high input prices in 2024 to deliver a 16.9 per cent margin. THG Nutrition’s margin more than halved to just 6 per cent. That’s in spite of THG products tending to be made with Whey Protein Concentrate, which is less volatile (and cheaper) than Whey Protein Isolate, which Glanbia favours.

Some of the earnings unpredictability is because, unlike Glanbia, THG prefers short-term supply agreements, Brown tells clients:

The situation raises broader questions regarding the strength of the Myprotein brand, the robustness of the company’s revenue management strategies, and the effectiveness of its brand and supply chain management. [ . . . ] Notably, despite two major whey price shocks in the past three years, there is little evidence that THG has adjusted its procurement strategy — such as securing longer-term contracts — to better manage input volatility.

If this helps

Apologies for writing twice in two days about a small-cap* but an interesting analyst note on THG, the protein-powder-to-mascara retailer, just dropped into our inbox.

The theme is one-offs, such as THG’s failed sponsorship deal with Williams Racing and the mothballed Manchester hotel it has written off. As we noted yesterday, THG last year booked a £14.9mn impairment charge for the hotel and spent £7mn to back out of the Williams deal, which it bundled together with the cost of an HR software rollout that didn’t work.

These kind of adjustments, along with disposals agreed shortly before the year-end, cause quite a gap between THG’s 2024 profit by its preferred measure, adjusted Ebitda (£123mm), the “management adjusted” operating profit metric (£92mn), its statutory operating loss (-£148mn) and the loss figure to be found at the bottom of its income statement (-£326mn).

There’s nothing shady about adjusting earnings to give investors a clearer view of the underlying business. The cause of concern is the regularity with which THG has adjusted earnings, as well as the items it has chosen, says Panmure Liberum analyst Wayne Brown.

In addition to the Williams sponsorship misfire, THG last year adjusted earnings to cover cost inflation it tied to the Israeli–Palestinian conflict. For both 2022 and 2023 it made adjustments for Covid-related supply chain disruption.

“These are arguably part of normal business operations, and their repeated exclusion calls into question the reliability and quality of the company’s reported earnings,” says Brown. “Should such sales associated with these exceptional costs be considered underlying?”

He adds:

Over the past four years, THG has classified £631m of costs as adjusting items—equivalent to 153% of the group’s cumulative adjusted EBITDA (£412m) over the same period. If we break the adjusting items between impairments (which are often linked to disposals and involve accounting judgements) and others, the other adjusting items over the last four years have also added to a material £227m, which still represents a significant 55% of cumulative adjusted EBITDA.

Stan

Are you Matt Moulding ?

It’s a big IF ,Moulding takes Nutrition I guess he will nab that £30M after the event, he leaves nothing on the table, the FT a article today just highlights how he works

Navek

We can only guess what MM is charging THG for?

It’s a small one but look at the Oasis Video he did a few months ago, reckon he didn’t fund that himself he got THG staff to produce?

It’s a small example and nothing compared to what’s gone on and potentially going on with £360M being handed to Ingenuity with MM signing all contracts but it’s indicative of how he operates

There is a real cost for 2 years for the intracompany IT systems according to the demerger document, do we really think MM a pays an equatable contribution.?

On his track record it’s a no ?

THG is un investable until the BoD grow a pair and deal with him or MA does a carve up

Taking the view that THG Plc is a FTSE 250 Company then every director who is on the Board outside Moulding should be ashamed taking Coin off the Company to look away?

They represent all that is wrong with U.K. public companies and the fact just a few percent of U.K.£ pensions are invested in the U.K. market

Shame on them, they are a disgrace to the City

I could be wrong and Ashley is ok being down £Millions and he’s just waiting to come in and buy more shares at the right time to help his new Bessie Moulding and he’s super comfortable that MM is not having it away with £360M of THG money via Ingenuity and be it MM took the profitable Health Club, left the £14M hit on the Hotel to Ashley & co, binned £7M on stickers on a Car so MM could play the Goat at F1 or issued himself £60M of shares at 32p, the list goes on …

Just maybe MA is happy with MM pulling his pants down

Fair chance MM and MA have cut a deal unless we see a TR1

they are just working the small print

Hi Mover

Think it’s fair to say the man has no credibility, it appears he can’t change his ways.

If he was serious he would resign as CEO of THG but he can’t even if he wanted to, we have no idea what are the Skeltons buried under the patio or he could have done a share buy back at £40M over the next 12 months?

So back to MA, maybe he’s loves Moulding and bought £50M of shares to be nice and he himself is reborn as a gentleman and scholar or he is still one of the most ruthless operators out there who will take down anyone for a $$

My opinion , MA won’t over pay for assets, he will squeeze Moulding and THG Shareholders by default don’t get top money but we might get 75p all in maybe, depends if it’s paper and cash

Without an Event we are going nowhere with Moulding at the wheel and the dodge Chairman

One other area of concern is the refinancing of the THG Debt

Was the only solution for Moulding to fund?

He issued himself £60M of shares at 32p to stay in control

and secure 24% equity in total

Anyone thinking Moulding can rebuild THG’s reputation in the City is kidding themselves, he’s totally un- investable

We can only imagine the Gems around the £360M Ingenuity contract?

Moulding can’t / won’t resign, he’s up to his eyes in it.