Member Info for Okehurst1

Data is moving the right direction for us

FT

‘Spanish inflation slowed more than expected in December, raising expectations of an easing in price pressures across the eurozone.

Spanish consumer prices rose by 5.8 per cent in the year to this month, according to preliminary figures published by the national statistics office on Friday. The figure was down from 6.8 per cent in the previous month and a sharper fall than economists had forecast.

The Spanish data are the first December inflation figures for a eurozone member state. If similar falls occur elsewhere, then policymakers at the European Central Bank could opt to lower the pace of rate increases more quickly than markets expected ‘

https://on.ft.com/3Z24p8g

Yeah good research Canary - thanks for sharing

We defo had a short attack down to 41p then they bought back

Reckon we gap up to 60p + before update

Thanks for reply Golden

Been a good debate / ideas everyone - not that we can change anything but it helps us evaluate THG risk /reward investment case

It’s nuts how under valued THG actually is today

Golden,
Can see your call is to sell Beauty ?

What do you think Beauty would be worth ? What would you do with the £proceeds ex paying off £300M ?

Morning 1 pencil

Looking at this from the prism of the market and analysis of the numbers, open to debate as you know.

I can’t see how THG can fund the growth of Ingenuity without impairing the growth of Beauty & Nutrition, as you know always open for debate and trying to work out if I am
missing something, enjoy the conversation.

Nb Serial entrepreneur background, hence admiration for MM for what he has achieved himself as an entrepreneur, the market not me thinks THG is only worth
£700M m/cap.

Sir Tom Hunter made a comment last week, distinguishing Moulding as a successful entrepreneur but THG has not been a stock market success

No one can argue with that comment - it’s fact

We only have £20M FCF between now and 2024 and we don’t know the true cost to complete the Ingenuity model - that’s it across the whole group

The market won’t hand over more new cash to Moulding, otherwise it’s a long slog from here - 2 years alone to generate £20M free cash

Not saying there isn’t a business within Ingenuity but even THG are only advising mid teen growth p/a at group level, it’s years and years of a tough slog to prove the model works

Split it away, explain the strategy/ produce the forecasts, fund the business adequately, Beauty and Nutrition can lock in long term contracts and Ingenuity heads to be a £3B Rev business with targeted EBITA and X years to FCF

Don’t hold back Beauty & Nutrition by starving them of their free cash flow to reinvest at same time

Golden
Agree re Ingenuity - no one can disagree with you it’s factual, am in your camp 100% here, we need to stop pumping cash into this black hole

I can’t answer your question with a level of confidence on Beauty margin other than say on 5.75% we generate £150M min next year ( 4.5% £100M min this year )and that looks pretty firm based on trend at group level

I would just work on group gross for now - hopefully we will know divisional by April

And let’s hope capex slashed.

Jobless data helping Nasdaq

Just maybe seeing a change

IF THG come in on guidance for 2022
Ditto increase EBITA for 2023 £165M to £200M
Cut back capex
FCF positive 2023

How does that play out for MM/ Qatar boys taking this private ?

We all know that on £200M EBITA we would have a forward multiple of 3.5X
at current price and still only an 11X EBITA at £1.75

There would have to be a premium to 14X being £2 a share ?

Would Qatar stump up at £2 plus ? Maybe £2.50? Gut feel there has to be a premium

Are we past an equity funded MBO at this level?

If we are then we are back to the Mouldy Pivot, cutting capex and trying to get the share price up to deter bidders as his Golden Share expires

Or

The big rabbit out the Hat, he goes for a disposal Beauty or Nutrition, pays off debt, spins off remaining 2 businesses / pays a special dividend

He’s got 3 main choices / direction before the GS goes

Steve
No way FCF naturally not with £130M Capex 2023
- £200M this year

Put aside capex £130M 2024 on top

£30M a year capex until Ingenuity lands some whales and we do
£100M FCF 2023
£120M FCF 2024

That’s with a conservative 10% growth rate & 5.75% gross margin

I have tweaked back their forecasts and it’s still decent

I will be surprised if Capex ain’t cut

14th October ?

I think we have hit £EBITA forecast from last RNS guidance

If we haven’t then Lord Lucan Allen’s position is untenable as we have not had a profit warning - he has one job within THG it’s not that hard for £400k a year

Looks like the Shorts / traders buying back in, the drop has been well over done

Didn’t know that Steve, so Mouldy has the only Golden Share on the LSE?

With a strike of the pen through slashing Capex “Moulding giving up his Golden Share / premium listing / Hitting guidance /transparency with divisional reporting

THG becomes FCF positive and everything fits into place

I do feel MM has an agenda and is quite ok about heaping pain on II investors so they take a low ball offer off him - but reckon they are onto him

Unless on margin it’s head down whilst the Shorts / traders move the share price with no news imminent until middle of Jan

Switched off share price - only way

Looks like the Shorts are trying to push down to MM’s last buy price but we know this can turn up very quickly and burn them

Good luck 2phev :-)