Member Info for Okehurst1

Nb THG couldn’t justify the relativity big SaaS Capex without the contracts they advise they are about to land

Canary

The SaaS element is not good enough for the big whales, hence the push for Capex in that area

That’s key now, develop out the back end, agree everything else in place

Steve,
But that’s how come we can buy in £700M / 50p that’s the opportunity
2 business’s generating £2B at a decent EBITA margin
That’s worse case here - if he doesn’t pull of the £1B ingenuity won’t get the FCF

No idea if it’s Boots but for £1B it’s a serious player

As I say unless your trading it doesn’t really matter what the share price does by the hour / day but an intra RNS would be entertaining if nothing else

Bull,
I’ve been critical of Moulding as a PLC CEO and his communication with the City, no one can defend him in that point

However commercially he’s built a £2B a year DTC business generating 7% EBITA -
It may actually be closer to 8% as Whey heads to sub €700

Commercially his problem has been Ingenuity, the model didn’t work, he now has one last throw of the dice by landing these £1B contracts and using the FCF from the £2B to fund the SaaS element to get it right.

That fact he’s put together Nutrition / Beauty I wouldn’t back against him not completing the Ingenuity project, the capital assets are in place now it’s the SaaS side that needs to be high level tech to satisfy blue chip whales

They have signed HOT’s that’s a given - the lawyers wouldn’t sanction the detail workout

Should they have disclosed on the RNS?

Dammed if they do, dammed if they don’t?

Unless your trading it doesn’t really matter if it’s today/ next week, a couple of weeks
let the traders play the pennies

Let’s see the detail/ structure of the deal(s) and we can evaluate the commerciality

Interesting post regarding Boots Owners ditching on line Pharmacy and we know their new beauty trading platform is coming on line in April 2023 so they indicate, will be interesting to see IF it is Boots as THG’s partner

Unless the contract is signed after hours we are always open for an intra day RNS, depends how much Moulding wants to take a pop at the Shorts - max affect

SME’s should in theory pay a higher GMV rate

Am guessing the issue is the SaaS element.

The upfront cost to API into each brand/ adapt to their operations is high

Commercially it makes sense to run with a handful of whales, built out the SaaS platform to their high specifications, return to SME market once the platform - tech wise - has been developed out

£100M capex this year is a lot of developers

As mentioned below, from a shareholder point of view I am relaxed either way, think the quick buck would be for Ingenuity to fail to land the £1B and mothball the operation and THG focused on growing Nutrition / Beauty

Flip side, the market will like a £1B GMV link up, THG doesn’t need a raise to fund and is FCF neutral 2023 and cash on hand of £600M

It’s win win

Assume Moulding pulls off the £1B GMV

THG will invest £100M into Ingenuity SaaS - he’s already pumped maybe £000’sM
into Ingenuity global infrastructure already - to support the back end of the business

He’s now using the FCF from the 2 profitable businesses he built / assembled to deliver the above - these are also the worlds number 1 in their domain of pure D2C

I know he doesn’t help himself with the City but you can see how he has developed a
‘Bunker ‘ mentality

Other PLC’s are learning quick on the back of all this, if you are a tech co don’t IPO in the U.K.

‘Government ambitions to transform the UK into a hub for technology suffered another blow yesterday as Ascential, the FTSE 250 information and events group, announced plans to spin off its digital arm into a standalone company listed in New York.

Ascential’s digital commerce business, which helps brands sell more online, made up 42 per cent of the group’s revenue last year. The company said the split would be a strategic move as most of its ecommerce income derives from the US, where the majority of its staff are based. Scott Forbes, the current Ascential chairman, and Duncan Painter, its long-standing chief executive, will run the newly independent business, the company said, and are expected to relocate ‘

https://www.thetimes.co.uk/article/4cce0034-9d01-11ed-8201-2ed91f44d1e8?shareToken=76dde46c0775eb745e31834a06d0f62b

For us PI’s just sit tight at these levels -unless your trading the pennies
The RNS could drop anytime by the looks of things

If it doesn’t we know what happens next - as below

Golden,
If he pulls in £1B and can point to the new CEO as a success - let’s be honest John wasn’t the man to run ingenuity- then he earns his Capex spend on SaaS

We need to see the Terms but he’s called it at £1B that’s a big print, he knew it had to be large, the BoD couldn’t justify the capex otherwise

Let’s say the £1B didn’t materialise for the example

John would restructure Ingenuity alongside the other loss making divisions ,he will have to however that’s done

Reckon the boys inside Ingenuity are fighting tooth and nail to get these contracts completed, lot on the line for them

Plus when Mouldings GS is up he’s a sitting duck as THG takes yet another restructuring hit - to pull out of Ingenuity

A lot riding on these contracts

Golden, plus Softbanks cash on top

Your correct but that’s now history - it just is and feel your frustration

Moulding had to land these whales or he won’t get the £100M capex

Suggest that’s were we stand today

I wouldn’t bet against him not pulling this off, he’s a top deal maker

But if he doesn’t ? We retain the FCF from the £2B @ 7%- maybe higher- to grow the profitable divisions

Am cool about it either way - at 50p currently

The after tax losses for 2022 are non cash of course - depreciation on the capex

We will have a better idea on 2023 once we see the £1B RNS - assume it comes

£80M EBITA
£15M tax rebate

Less £90M finance / rent

£5M net operating cash ( tops)

FCF

Then deduct capex add back working stock + for FCF
it’s a tricky one as they say they saved £100M but that looks a one off in part
My calc it’s £25M net net savings

Win win either way for us PI’s at this level (50p)
Put the cash (FCF) to work growing nutrition/Beauty or land the £1B

DG,
Golden knows that, we can only work with what we know and Tbf Ingenuity has not been a commercial success as yet

It maybe soon however - if they pull off the contracts

Good find

Beauty has value as well

Steve
A lot hinges on the £1B - or whatever the deal (s)they advised on

Moulding gets his way with the BoD IF they land, the BoD cant justify the £100M capex on £200M GMV , it doesn’t stack

Bag £1B and more in pipeline then it’s game on