Member Info for Okehurst1

Strap in …. All set up for next Tuesday

We may well see circa 70p before update

Market likes the trend

FT breaking headline

USA Inflation at lowest level in a year

The annual US inflation rate fell in December to its slowest pace in more than a year, in a further sign that price pressures have peaked amid the Federal Reserve’s historic tightening campaign.

The consumer price index, published by the Bureau of Labor Statistics on Wednesday, declined for a sixth consecutive month, registering an annual increase of 6.5 per cent.

While still near a multi-decade high, this marked the slowest pace since October 2021, and represents a notable decline from the 9.1 per cent threshold reached in June. Compared with the previous month, prices dropped 0.1 per cent.

The closely followed “core” measure, which strips out volatile food and energy prices and is regarded as the best indicator for inflation’s trajectory, rose 0.3 per cent from the previous month, translating to a 5.7 per cent annual pace.

Steve, fair comments

Interestingly we are 50% up since end of December - in just 3 weeks

That’s the pro vs con with THG, we may well hit £1+ after results as you say

Not one to Short unless II’s on say a 3:1 long /short strategy but not one to be on the sidelines/ out of the stock , we have technical and fundamentals in our favour ( long ) at the moment

Interesting link between the two Delta - thanks for sharing

M&S products accounted for 30% of customer baskets over the Christmas period on Ocado Retail.

Very impressive seeing Online sales smashing it

What’s the value of the 2 biggest pure DTC Beauty and Nutrition business’s in the world?

What a bargain we have thanks to the Shorts driving THG price down 90% +

Am not in ASOS but well done to anyone on a trade

Up 14%

£1 + that’s where we are heading post results

# play

Looks that way Carp, we don’t even need new buyers - it’s why I never knock Shorts they create opportunities when they over post their hand same way as longs do

70M is a lot of shares on loan

Looks like we are heading to the 70p + Pre results

Set up nice at that point for a run up up to £1+

Blinky spot on

ASOS up 10%, shorts are in trouble

Oct 2022 looks like the low for us/ the market in general

70M short is set up well for us longs here … sit back and watch us continue the rise

40% YTD

Steve,
Go back to Boots, that’s our comparison for THG Beauty sales / deliveries
Put aside we are a food producer
20% plus sales USA alone

It’s not like for like business to ASOS - we all know that but agree the City likes to attach

Steve
It was a double whammy

Trains on strike, ditto post office deliveries affected, on line sales went through the roof as a result - if we look at who has reported on the market

Look at Boots reporting 23% of sales on line, massive numbers

Nb 160M was annual figure
It’s some volume

Putting stuff into prospective

THG Ingenuity internal social media Xmas video released on 23/12/2022 indicated they had handled a record 160M orders - so their CEO said

If there were a few complaints due to last mile stuff on Trust Advisor then relative wise it’s a nothing - zero would be nice of course

Just on average delivery revenue per drop, it will be interesting to see had they exceeded their internal targets?

It looks to me they have ,based on the 160M and working bank average revenue per drop.

THG now up 38% YTD - ok early doors but decent trade

Thing is many shorts wouid have been caught out and investors on the sidelines and they miss the big jumps being overly bearish

We can still bag from here on update / guidance / FCF + / capex

Legs in this rally

Hi Justise
It’s interesting angle and Moulding can certainly pull deals out of the hat.

BB works well sharing ideas/ thesis /data

65p to 75p before the update ? What do we think ?

Good debate

On my side I just can’t see how that works in terms of funding Ingenuity ?

Bank are repaid but Ingenuity needs all the free cash from Nutrition
it’s producing the majority of the FCF before capex, the SPA would have to allow THG to have a call on all the cash - you couldn’t leave 25% of the cash in for THG to enjoy 75% of the benefit

Then IF THG need bank debt again the SPA would have to allow the Banks a charge on the 100% of Nutrition

However maybe there is another mug SoftBank out there?

Good debate

Just on THG receiving £300M for a 25% equity stake in Nutrition and chatting through ?

How would that work for the investor putting the £300M into Nutrition ?

Surely they would insist via the SPA ( shareholder purchase agreement )that Nutrition can no longer hand over its FCF to Ingenuity -,being a completely separate company that they don’t benefit from? We would need someone as dumb as SoftBank?

THG needs that cash for capex

Put aside the lead banks may demand the £300M against the holding company debt - if they don’t and THG retain the cash the new £300M investor has no protection on their investment as the lead banks will have a floating 1st charge over all company assets and they will be a minority share holder in a subsidiary of a PLC

Maybe there is another mug like SoftBank but gut feel those days have been and gone?

1 pencil
They have no head room as it stands today

Due to capex they only have £20M of FCF positive 2024, that’s on their numbers when you put all this into a spread sheet - that’s it for 2024
This may change on the update

Don’t forget they want 5% of Rev into Capex each year

We only need inflation to bounce back 2024 and we are in a tricky situation

H1 2022 was just 3.5% margin!