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Ste, think it’s more THG have had meetings with big II’s, picked up their concerns and actioned

- FCF positive £50M H2 2022
FCF neutral 2023 , positive 2024

- Disposal non core assets £40M now
On Demand / Other all loss making ditto

- Restructuring of BoD, Lord Allen, Gallemore focused on above, new head of finance
New CEO of Ingenuity

- Clarify cash at hand, they now have £660M

- Net debt, down to £160M

- £140M EBITA profit core business’s

Think we can say THG are listening, Moulding has held onto his Golden Share and that’s going this year and THG will go full listing which will require 5% of the stock getting picked up by tracker funds

PMH

Yeah they must have exchanged but under IFRS you can’t book till completion, looks like they got a 10% chip

Spot on Steve

They will flex the Capex to hit FCF neutral 2023 - assume the Whale lands

Steve

Just work on net debt , it’s easier

It’s important because without the £1B contract Ingenuity is finished commercially
but that’s fine as well from a shareholder point of view
they repay the £160M - they will have reduced by £90M already post disposal so they are onto it

The depreciation on the capex will mean no tax to pay for years

Put into prospective the biggest cost post EBITA profit with no debt will be Mouldings £20M rent

It’s net debt to worry about

It’s £160M post disposal

That’s it HH so net debt £200M

Less £40M disposal

£160M

We don’t land the whale no need to fund the SaaS platform
we repay debt

THG ain’t going bust

Steve
They knocked out £50M positive H2

Do the maths on £70M worse case EBITA 2022
£75M stock

Nb I don’t think the £100M was reoccurring, work on £20M
red herring off them

The flex is in the capex, remove Ingenuity SaaS and THG churns the cash

Repay debt of £160M over 2 years and our net operating cash is EBITA less £20M
Zero tax to pay for years

They have net debt of £160M after disposal Steve
not £500M plus £160M
They have a facility but it’s not drawn

The info is there in the accounts, they mention also in RNS last week

…. Or they land the £1B and Ingenuity gets a value
maybe £12M EBITA X whatever multiple
and they have the £14B excess to go at
Nb stick with 1% GMV it’s not higher

Am easy either way but maybe at a push go for above as Ingenuity starts to become interesting

Steve

It’s why am relaxed whichever it goes - land the whale or not

Net debt is £160M ex disposal £40M

Use the £90M FCF and we are down to £70M
2024 we are debt free

That’s worse case

At that point £20M rent … that’s it

You mention the £500M .. they don’t owe £500M that’s the facility, they owe £160M as above

Hi Steve

Whichever way you look at it … remove capex and THG churns the cash

re 2022 H2 FCF was plus £50M and they reduced debt by same

2023 is as post below

THG will use the depreciation on the £1.8B they have invested since IPO a and show losses for years, which is smart ,we pay no tax

Go back to again

IF they don’t land the Whale I don’t care

They have £90M FCF 2023
They had £50M FCF H2 2022

It’s Ingenuity that will take this years cash for SaaS development, it’s self funded from the profitable divisions, this is just fact

They land the £1B Ingenuity then has £1.2B revenue and £12M pro rata EBITA
It’s not 4% margin on the GMV it’s a straight 1% but we don’t have stock to purchase so nil Opex maybe £14B Space to sell

But the SaaS platform needs to be top draw so you can see £90M Capex a year will be ongoing

Ste
Let me help you

The main core business will do £2B Rev this year @ 7% EBITA
on €700 Whey we may well do 8% but let’s go with 7%

That’s £140M profit
Plus. £40M cash from disposals
Plus. £15M tax credit
Plus. £2M Ingenuity as it stands (1% GMV don’t go higher)

Less £1.6M a month loss from On Demand et al until sold

Less £90M finance / rent

Leaves £90M ish FCF

They want to spend all that FCF on SaaS development at Ingenuity on landing the so called £1B

Net debt will be £160M
Cash on hand £600M

No point looking at 2024 but these are the numbers above
The FCF will be pumped into Ingenuity or it won’t if they don’t land the £1B

Debate the above but these are the £numbers

Ste

Best you lay out your cash position your numbers are all over the show

We are quids in without the so called £1B whale

A rerate with it potentially

Ste

Come on, that’s not factual

They are FCF neutral worse case minus £10M but that’s only after £100M of capex on SaaS and repaying £40M of Debt

IF … the Whale don’t land they have potentially £100M of free cash on top as they avoid funding Ingenuity

The £1B RNS
Bonus would be equity deal but that’s a long shot

Or

No deal and we keep the FCF as no point spending £100M on SaaS for a business with no volume
Invest / focus on Nutrition / Beauty

We do £140M min EBITA this year
FCF would be £90M with disposals - assume no capex of note
market will like that

Either Ingenuity gets a value placed on it, which it would do with £1B orders
Or the £2B profitable business retain their FCF for growth

Put aside the penny movements it’s win win for us PI’s at this level 50p ish

And we are back to 55p

The buying has been firm

The Platform is not complete as such they need to spend heavy on SaaS
around £100M is a serious investment

We need to see the terms of the £1B / time scale of roll out