Member Info for Okehurst1

A/S we have to move to FCF positive, even with the macro data improving THG can’t keep pumping serious cash into Ingenuity - cash that’s generated from Nutrition and Beauty

Imagine how we much faster we could grow both those divisions that make up 90% of our revenue and most of our gross profits ?

We won’t get a serious rerate until we see FCF positive

Personally I think he has no choice but to re guide on Capex - they told us they want to spend 5% of revenue on capex each year that’s vs a 4.5% margin this year ( at best ) and a loss making ingenuity and maybe a 6.5% margin this year and again with big losses in Ingenuity, the numbers don’t equate .

THG has £300M of debt vs £m/cap of £680M and THG is not generating any free cash today and they tell us they won’t generate material cash until 2025, no room to manoeuvre with that balance sheet, it’s just fact - the debt has to be serviced and repaid

Without cuts to Capex it will be another year of negative FCF, even on their own numbers it’s end of 2024 before they generate just £20M cash - after spending another £260M on capex over next 24 months

That’s very tight cash wise without increasing / utilising debt even further,Moulding has a restricted balance sheet wise to carry out an equity transactions and god forbid we had another burst of inflation in say Whey in the next 24 months it could get messy, just look at margin H1 2022 , it was just 3.5%

Moulding pivots on the capex / pulls back on Ingenuity which is not performing financially or he makes a disposal

Re Rumours they are just that, no idea why THG web site has removed all Nutrition vacancies and retained the other divisions

Been a rumour/noise going around the past 4 weeks on social media within its industry that THG Nutrition is in due diligence process, there may well be something going on? Is only rumours mind.

We know Moulding needs to do a deal, his balance sheet is shot through and GS up this year, don’t think it would surprise any of us if they did make a material disposal, they alluded to at the last Conf call about the value of Nutrition
Is strange that there are no Nutrition jobs on the THG web site but roles available within the rest of the group ?

Cheers Steve
Hope for all us little PI’s at these levels we bag from here
something got to give vs SOTP

Steve
Anyone in 31p to 50p couldn’t have done it without Mouldy / Shorts

Patience, money to made here .

Defo going to gap up towards Update

Just

Thanks for the commentary 2phevs - helpful

Ste, only £260k shares sold vs £356k bought

Not much conviction there? - either way

Ste
If he hits 2022 forecast that will provide comfort to the market

Guidance will be key of course

Just can’t see much in this for the Shorts, too much risk to an upward surprise of FCF positive or disposal - my call

Can see us gap up next week as we approach the 17th

Sb, agree

Divisional spin off would be a bonus - kind of not expecting much on GS as he has told us he is letting this expire

Wonder if Lord Lucan Allen will pop his head above the parapet?

My call … 4.5% gross EBITA for 2022. £105M to £110M before SaaS Adjustment

Will they guide to 6.5% for 2023?
10% growth ?

That’s £170M EBITA

Cut capex FCF+ and Mouldy pulls a decent rabbit out the hat, we hit £1+

Full bagger from here

Cut capex / FCF positive / upward guidance EBITA will do as a starter for 10 - Mouldy Pivot

A Disposal will be as Steve said a ‘ gift from the gods ‘
Can’t see II’s letting him nick this on the cheap so MBO maybe off table

Ste,
Good to have opposite views / opinions

No need for me to repeat my take & £numbers

Risk / reward for Shorts has gone here, it’s going to be expensive to close out if ‘naked’

Let’s see what ‘ rabbit ‘ Mouldy pulls out the Hat

Looks that way Sb, helicopter view of wish list below and we bag

2022 results look in the bag - £100M to £130M range

We want to see Capex slashed / FCF positive 2023
throw in cost cutting
EBITA £165M to £200M

No THG red dot … looking good

Relevant paragraphs - firewall to article

‘Boots has hailed a “very strong” Christmas trading season after sales at the chain grew by 15 per cent in December.

Britain’s biggest high street chemist said categories including gifting, beauty and fragrance performed “extremely well” in the last month of the year. Demand for over-the-counter cold and immunity products also rose.

Online orders also continued to rise, with digital sales at Boots now accounting for 18 per cent of its total retail sales. The company’s website recorded its biggest ever day of sales on Black Friday in November, with its No7 cosmetics line, electric beauty products and fragrances in demand.

Shares in its American owner, Walgreens Boots Alliance, closed down $2.30, or 6.1 per cent, at $35.19 after a $6.5 billion opioid litigation charge knocked it into the red.

https://www.thetimes.co.uk/article/7adc7ae2-8d38-11ed-b24e-c1aaebfbdb8d?shareToken=a17ef97211fd75681e805381f65782c7

Hi Stock/B

Hopefully this is the start of getting peace talks moving

For the greater good let’s hope so and this is the beginning of the end

Market will go nuts if this gains momentum

https://www.bbc.com/news/world-64178912

50p was inked Monday gone

It’s how much do we gap up before Update ?

We have a bagger plus on our hands IF THG deliver what they said on last update