Member Info for Okehurst1

Agree we shouldn’t be bundled with ASOS / BOO

We are a niche/ number 1 in the world in both D2C Food Producer and Beauty Products but I don’t think we can be in the same category as Ocado - know we have debated loads

We have just £200M of revenue in Ingenuity just 8% of total group sales
put aside it’s not even our robotics / main tech

I think Moulding is a top class Entrepreneur, genuinely respect his success

Sir Tom Hunter his close friend said it all a couple of weeks ago, gist ,
THG has been an entrepreneurship success but a stock market failure

Tuan, they even reconfirmed in October

HH, agree.

Unless on margin the risk / reward is slanted for the Longs, be it 60p or £1 this week am holding either way, ironically the worse the message tomorrow the more risk to Moulding of II’s being further disappointed

Moulding ain’t that dumb - he’s a smart boy

Depends Steve

£EBITA / capex slash / margin confirmed / FCF neutral - at least - and we are £1+ as the shorts will bail

I think THG will deliver - could be wrong of course but the risk / reward looks a decent bet

HH, the issue he has - as we all know - he has been able to hide behind the Golden Share that’s coming to an end and I don’t think even the most hardened Bear would disagree the SOTP are worth we’ll above the £750M plus m/cap

As a result Moulding is exposed to shareholder activism, it’s coming down the track and as a control freak he won’t enjoy the experience, be that forcing seats on the BoD or an outright BId for the group , PE or Industry, over the head of the BoD if need be

THG now has £300M of debt and it relies on Whey prices staying low, he needs to consider the market that gave the business £2B of cash to grow - to raise £2B plus

Steve, that’s the issue for a trader

Anyone who missed the 60% jump being on the sidelines is out of the money

THG hit guidance / up guidance for 2023 for FCF a neutral by trimming capex by £30M and we rerate to £1+

A big slash to capex and we get a serious rerate as we head to £1.20

We have a good chance to bag from here IF THG are sensible and that will cause the Shorts to rush to the exit

I wouldn’t back against Moulding and be out of this close of play today

In it to win it stuff

Good debate
Can’t disagree with your points - Moulding and it’s created an opportunity

Fingers crossed tomorrow

Just looking at it from a market point of view

Personally I think it’s a shame to starve Nutrition of capital and pump the FCF it produces and invest in Ingenuity which is not performing commercially

Imagine the growth of Nutrition and Beauty if they paid a fee - what Nestle pay?
for the Ingenuity service and they could then reinvest their free cash in their business?
How big could they go ?

Moulding risks depressing the share price and his Golden Share is up this year - for what it’s worth I think I think he will pull a big deal off H1 this year he has to

Know we are up 60% YTD but we are down 90% from the highs and now have £300M of debt and the model requires Whey prices to remain at their 5 year average or the margin drops to 3.5% - this is fact as as we all know as it actually happened, inflation could return, we just don’t know, we have little headroom, let’s say the war escalated in Ukraine, some event happens …

Nb wish list £100M cut in capex for 2023 & 2024
Moulding shows fiscal discipline
£30M cut the least to see

A/S that’s the issue the market will have, we need to see FCF neutral at least
That means a £30M cut in capex 2023

THG pumped £200M into Capex 2022 and is earmarked to drop another whopping £1/4B this year next , predominantly on a division generating limited growth - just 8% of group revenue - and sucking all the cash from the 2 profitable business’s and stunting their growth the same time as they have limited capital to invest and same time we have £300M of debt

At the bare minimum

- They hit forecast £100M to £130M EBITA 2022
- Group margin 5.5% H2 ( needs to be to hit the above was only 3.5% H1)
- Group margin 7% 2023 ( 200pts they guided to)
- Guidance £175M to £200M EBITA 2023

Hoping for ;

- Capex slashed in 2023 from £130M to £30M , know am being too wishful here but THG need to pull back sinking more cash into Ingenuity until it the model generates a return on current capital invested

- As a result of the above serious FCF positive 2024 , it’s only £20M at the moment without Capex of £130M trimmed

- Cost cutting

Capex & Cost Cutting, if THG don’t demonstrate a control of both - tomorrow - it’s going to take the wind out of the sails of them hitting guidance / raising guidance

Last but not least not expecting the former
… Moulding pulls a big rabbit out the hat, nice big bonus ball deal
and maybe from a symbolic point of view our £400,000 a year Chairman Lord Lucan Allen shows up for once.

* 17/1/2023

They posted the date on the THG a web site a few weeks ago
17/02/23, no need to RNS that same information the day before

Steve, agree on the end result - we have both had same range since October

Be interesting to see how we fare on Tuesday

Historic group margin has been north of 8% EBITA
Nutrition gross margin 47%

We did just 3.5% H1 EBITA

They forecast £100M EBITA plus for 2022 which depicts 4.5% gross and advised 200pts profit increase next year (2023?)

So ballpark we have to be at 5.5% margin H2 2022

2023 we head to 7% + which is still below historic

Add on 10% growth not 15% like they advise

We hit £200M EBITA 2023

Suggest this the way to look at the margin overall that’s how I look at it, work from historic, discount what they say to cover just in case

Rev B will have to do a £raise first, this will enable the accounts to be signed off as a going concern
The AIM Team won’t allow a Plc that had it’s stock suspended then relist without the accounts signed off.

They should publish the accounts, then do the £raise , then requote in that order.

re the matter over the factory, they need to raise the full amount outstanding and park in an account, they may not have to pay over full amount - eventually - but they must have the funds on escrow / hand to show the auditors

Ditto they will need working capital headroom on top over and above Bank support - the auditors won’t want to see onerous bank covenants, covering the 2 items above will help negotiate terms with the bank as well

Fully confident that Bob Holt has this all in hand

Anyone who was out of THG missed a whopping 55% jump last week or so

Last week December was a brill time to average down a wee bit, we couldn’t have done this without the Shorts, they do create opportunities

Big IF … we have our collective research correct we could see the start of a serious rerate this week and move to circa £1+
Not without risk but suggest the downside is limited

If we do hit £1.20 Q1 this year that’s close to a 200% increase from December, personally I think we will see this level within that time frame, the macro is changing and the smart money will start closing their shorts as they look 12 to 18 months out

We don’t even need new investors, the 70M loaned stock ‘ carries the water ‘ for us

Exciting position to be in for us Longs

What a start to the year, THG up 60%

Shorts getting trounced in the general market - brutal for them

We could see 70p hold by Monday close of play and if us Longs have done our research correctly we get the big jump after the trading statement

We have the added bonus we don’t actually need lots of new investors as there are 70M shares on loan , it’s an excellent position for us Longs to be sitting, we will continue to make decent gains as the shorts try and get their profits out - intact

‘Investor optimism that the UK economy may not be as weak as feared has propelled the FTSE 100 index of Britain’s biggest companies to within a whisker of its record high.

Yesterday’s rally takes the Footsie’s overall gain since the start of 2023 to 5.3 per cent and marks a break from last year’s volatility, when worries about soaring inflation and the health of the economy weighed on share prices. The benchmark index has advanced 1.9 per cent in the past five sessions, having put on 3.2 per cent in the week before.

“It’s remarkable how sentiment has turned around,” Ian Williams, a market strategist at the stockbroker Peel Hunt, said. There have been better than expected trading updates from companies such as Marks & Spencer, Tesco and Whitbread this week.

“Obviously what’s caught people on the hop is the resilient nature of the trading statements from consumer companies,” Williams said. “Despite one or two exceptions, the overall tone has definitely been nowhere near as negative as was feared.”

https://www.thetimes.co.uk/article/886d4ce4-937e-11ed-beb4-99fcdfa7645c?shareToken=b2b0a31acbf1f1d9b7dfff590752b982