Member Info for Okehurst1

They said they would be cash flow neutral 2023

Only way is with this £44M and cut Capex from £133M to £100M

That’s assuming 10% growth -not mid teens-, and 5.75% gross EBITA

Can’t see then getting to FCF neutral 2023 without it in 2023 numbers

I’ve not included Steve in my cash flow numbers for 2022
they haven’t informed us the deal is complete - should do as it’s material

Even if it’s via Mouldys Instagram account

Think it’s telling there has been no update re the £44M disposal
if it was in 2022 it would get lost set against the £197M capax

However add the £44M into 2023 on top of the £150M EBITA and iF they can trim Capex from £133M to £100M then THG is FCF neutral

Suggest this is important as the Market wants to see FCF positive -ARR/ X revenue multiple valuations have all but disappeared

THG X EBITA ratio above 14X could well be reliant on FCF turning positive

The Times paragraph below kind of pulls this together;

‘THG’s relationship with Cookson soured many years before the market listing. He resigned as a director in October 2012 and has been locked in a dispute with the company in the years since. Cookson won a damages payout worth £10.8 million in a judgment related to the Myprotein deal in 2014, while THG secured damages of £4.3 million as part of a competing claim in the case. THG has said Cookson’s latest application is without merit’

All those years of litigation, with civil cases you don’t get all your legal costs back, the time and energy and this guys net gain - from 9 years ago ?

£6M less costs vs £283M at the IPO says it all how this guys wired

He should have sold every share and bagged nearly £300M if he didnt like the company / Moulding and got on with his life, but instead he eats himself alive on case from 2014, takes his eye off the boil and his £288M less / £plus what ever he sold is worth pro rata £28M

Mute point

A number of economists have raised concerns about the job numbers report from the USA

Apparently the household report shows no jobs growth but the establishment survey counts the ‘ jobs ‘ not the person and is showing growth

700,000 people in USA have 2 to 3 jobs , the establishment report shows 2.7M jobs added last 12 months and the household report shows no net jobs created

Interesting data, the Fed can see same.

Licker / Oxford Bull

Agree with both your posts - spot on comments

Personal view

Mouldy doesn’t help himself he needs to engage the City IF his agenda is to retain the Quote, if it’s to try and nick this on the cheap then he continues with same tactics….. btw any one heard from Lord Lucan Allen?

These guys have gamed this, let’s be fair the BoD have not done the share price any favours other than afford them to pick up shares in the open market on the cheap - that’s just fact

Just on the notifiable Shorts, we saw same tactic a few weeks ago, one of the II’s increases their Short by a Tad - 1/10th of 1 percent - on a down day
The market thinks the Shorts are increasing and within a few weeks they exit right of stage

If a ruck of II shorts has ploughed in then it would be different conversation
it’s 1/10 of 1 percent that’s it and the notifiable shorts are down 50% in the last month to just over 2%

Who cares unless on margin of day trading where the daily / weekly price moves to 63p to 73p, doesn’t matter other than offer opportunities to pick up shares on the cheap.

Let’s see what the P’s look like when they update then we will have a better idea, they told us 4 weeks what the EBITA would be, that’s the litmus test for me

Seasonal work tends to go up before Xmas

Permanent jobs losses dropped quite a bit 127,000 - tech lay offs maybe ?

Interesting shift happening

‘Among the unemployed, the number of permanent job losers rose by 127,000 to 1.4 million in
November. The number of persons on temporary layoff changed little at 803,000. ‘
(See table A-11.)

Steady

https://www.bls.gov/news.release/empsit.nr0.htm

Hardly any volume only £213,000 sold

The short term movement in the share price is irrelevant if you’re long and not on margin, £200,000 of shares sold today, there is no big Short strategy, the smart II’s who run a Short /Long book will have the numbers below in their spread sheet, it’s just too risky for them, lots of other easier targets, the money on the Short trade for THG is over - it’s been a good one but it’s now about getting the profit out, which is the tricky bit

The MM’s move the price down this morning hoping to accumulate stock and we get a repeat of the last couple of days trading as they fulfil broker orders for clients

It’s a steady drip drip to pick up stock and reduce their position - as we have seen the last few weeks with notifiable Shorts reducing by 50%

Hi Steve
May I suggest it’s worth considering the gross EBITA margin for your calculation in the short term then over lap for 2023, push margin to 5.75%
throw in the £44M disposal then take a view on a tweak down on capex and we hit FCF neutral

Back to 2022

2022 H1 was circa 3.5%, EBITA we know Whey price dropped, they buy spot 1 month ahead - so they say - on a good day we may see 4.75% gross EBITA for year end, that’s top end for me.
£2.35B is the forecast revenue, we hit 4.75% we come in with £110M EBITA
We then should enjoy 14X m/cap valuation - we will gap up

2023, 10% growth , 5.75% EBITA margin on £2.6B

It looks to me THG model is to encourage the App download, 70% repeat sales via App users, they can be highly competitive due to their vertical business model and the numbers above stack - they are positioned well

The numbers above are realistic, no need for massive price increases as long as they got that 5.75% gross for 2023 , again 14X and you can see the scope for the share price

I posted below on the 29th Nov - Suggest the investment case is even stronger, genuinely think there are going to be a lot Shorts running for cover when we get the trading update, that’s when we get the squeeze on the share price

‘£20B m/cap on £7B revenue

Not a complete like for like as THG has nutrition ( higher margin business ) and ingenuity THG £2.65B Rev 2023 and £900M m/cap

If we strip out THG Beauty of £1.1B as a standalone Co
on pro rata revenue in same sector -and let’s assume the gross profit is similar margin - that’s £2.85B just for this one THG division

The point is there is no way once that Golden Share expires in the next 40 weeks that Mouldy won’t be exposed with a £900M m/cap

Sit back and be patient, either he engages with the City and it pushes the share price back up or someone comes in or he launches a bid ‘

Wow! Pretty impressive

Like for like for the Qtr up 14.6%
Net income up a whopping $274M from $215.3M

‘ Likewise total sales for the first nine months increased 18.3% to $7 billion. The company attributed the surge to a "favorable impact" from the resilience of the beauty category, retail price increases, the impact of new brands and product innovation, and the easing of Covid-19 restrictions.

Net income soared ?29.5% to $901.7 million, during the nine months.

“Amidst a challenging macro environment, the Ulta Beauty team delivered yet another outstanding quarter, with strong top and bottom-line results and growth across all major categories and channels,” said Dave Kimbell, chief executive officer’

Also raised its guidance

‘Following the stellar results, the company increased its full-year outlook. It now expects annual sales to fall between ?$9.95 billion to $10 billion, compared to prior forecast of $9.65 and $9.75 billion’

Shares at all time high

https://us.fashionnetwork.com/news/Ulta-beauty-updates-full-year-guidance-on-another-strong-quarter,1464552.html

It’s been a good run for the bears in general and especially attacking THG

Mouldy / Qatar caught the bottom with the £38M purchase

100% up since then, nice trade in a few weeks

FT online comment

‘The monthly change in the PCE, which is the Federal Reserve’s preferred inflation gauge, pushed the annual rate down to 5 per cent from 5.1 per cent, still well above the bank’s 2 per cent target.

In a speech on Wednesday, Powell said that “the time for moderating the pace of rate increases may come as soon as the December [13 to 14] meeting,” suggesting officials would “downshift” to a 0.5 percentage point rate rise after increasing rates by 0.75 percentage points at four consecutive meetings’

Steve the volume is very low
If the Shorts thought they could make it work for them they would have a pop - new positions

Problem they have is existing shorts with a profit who want to lock in profit need stock and it’s not there - in volume

Heading to 4% up on just £500k shares sold

These guys need 100M plus shares

No chance are they getting out of this one without pain

Same pattern

II client( Short) to broker to MM , ‘ pay xx on the offer’

Squeeze a few on the Bid by tweaking off the high for day

Weak hands / day traders take the pennies

MM to move the Offer price back up once basket filled
Complete the sale, make the margin and get the commission

Repeat rinse as we move to the £1

Nice bit of business