Member Info for Okehurst1

Volume very low, thin trading on just £500k of shares sold

Let’s see what the trading update says, could be a nice squeeze on the shorts if it’s decent

Mouldy ain’t interested Steve - hasn’t been for his own agenda
like him picking up Softboys £600M stake for £38M

Am guessing but let’s assume he can’t nick THG on the cheap and the II’s have rebuffed his offer, he has limited options other than engage the City - don’t get me started on Lord Lucan Allen btw his agenda is very clear, it’s almost comical if it wasn’t so contrived

The Chairman / CEO need to start communicating rather than cryptic photos and reels on Instagram, otherwise someone is going to take THG and them out.

£158,000 worth of shares Sold - that’s it

No volume

Trading update - if it’s good - this jumps in minutes

Notice on the article that A/steel just posted

Sage & Microfocus the only 2 tech stocks in ft100

Just 7 months after that article Microfocus was taken out for $6B
97% offer above the closing share price

https://www.financierworldwide.com/fw-news/2022/8/30/micro-focus-sold-for-6bn

I added a bit more this morning
Could drop who knows but happy to accumulate /hold

2 slugs of £25k and 26,000 shares (100k shares)

Morning Smyths,

Yeah total nuts, Mouldy is going to lose his pride & joy if he doesn’t engage with the City / Investors, the II’s won’t take a paltry bid like £1.25 or something, so with his backers he either raises his stake money or he is exposed to a Bid for the lot.

I am pretty relaxed on the daily movement of the shares
looking forward to the EBITA / capex / margin update and guidance

In a day the market was down -Over Chinese Covid issues - ULTA Beauty hit a new all time high, it’s next results are due December 1st so one to watch

‘ULTA Beauty, Inc. ULTA is likely to register top and bottom-line growth when it reports third-quarter fiscal 2022 earnings on Dec 1. The Zacks Consensus Estimate for quarterly revenues is pegged at $2,185 million, suggesting a rise of 9.9% from the prior-year quarter’s reported figure.’

£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

https://finance.yahoo.com/quote/ULTA/

Steve, understand the frustration but we have just had a 125% jump over a few weeks, volumes are very low, just 1.2M shares sold today, time for patience, no need for THG to advise they had a good weekend of sales

It’s mainly all about the EBITA for 2022 and guidance 2023, ditto margin ,a cut back on Capex for 2023 would be helpful and advise on FCF -,for the year in question - to be neutral after the £44M disposal
Ingenuity whales a helpful bonus

Sit back and let this play out

Re FCF
We should have the benefit of the £44M disposal in 2023
I forgot to add that on the BB post re FCF
Assuming it completes and cash benefit in 2023

Even with £133M capex next year IF the EBITA was £150M
THG would be down to ‘just ‘negative £33M FCF

Drop the Capex to £100M and THG are FCF neutral for 2023

Open for debate on the numbers

Just on the EBITA numbers /margin ( again)

Ste/ Golden any views to below ? What are your Rev / gross margin calcs ?

Point being, Mouldy steered away from the H1 EBITA gross margin and said they can increase by 200pts, I have discounted what he said on that point, as such I’ve built in the following;

2022 Rev should be £2.3B @ 4.5% for the year
Assumed better 2nd half margin
£110M EBITA
Flexed back revenue a wee bit / ditto margin a by a tad

2023 £2.68B @ 5.75%
£154M EBITA

2024 £3B @ 6.5%
Call it £200M EBITA

Golden didn’t explain correctly
Should have said 70% of sales via the App are repeat customers - as per the last conference call

Nb
Gross margin increases
Automated processes removing 25% of workforce
Ingenuity landing material big whale clients not baked in to the £numbers below

70% of sales are repeat orders via the App

It’s a task and half but if you look at country by country you can see the App downloads - downloads looking very healthy

I’ve discounted EBITA 2024 to £210M - £20M FCF

It’s the £130M capex for that year in question, on top of the £133M 2023 - put aside the £197M this year - just can’t see the justification of almost £260M capex in the next 24 months

Ok there has to be some capex but not £1/4 of £Billion when the heavy lifting has been done

Throwing a number at this but IF it was £50M not £350M we would generate £250M FCF over 2023 / 2024

If Mouldy doesn’t do it someone else will once the GS had gone

As we know ,9 months to go Licker and the Golden Share is dust

The 9% II Shorts must be looking at all the data and thinking when to pull their THG position ?

Early doors Data from USA searches

Tech and Beauty leading the way

https://youtu.be/DStflZDl28I

This was my take when I ran through average sales prices per unit per D2C divisions
Posted few weeks before the big jump - based on the COO of posting on linked as reported by SP
Then over laid the average sales price per delivery
Fully appreciate this needs to be taken in context - it’s my calculations and the COO guy may have been wrong

Q4 Rev

09 Nov 2022 15:30

7.44M @ £61. £463M Beauty
4.56. @ £48. £218M. Nutrition

@ 44% GP average

Just on the calendars, take everything on board about Mouldy but for us folk assume they sell 30,000 it’s £6M revenue against potentially £463M for Q4

Nb I think they need the above Rev to hit the £115M plus EBITA ( assume mid point to their £100M to £130M as they advised a few weeks ago )

Golden, not going to defend Mouldy and his motives on the conf call in question, don’t disagree

Hitting the £100M to £130M EBITA number they forecast 3 weeks ago for this year is one of the key £numbers / plus guidance 2023 - bonus would be Capex reduction

Ste, that’s my price target Q1 2023 and we gap up from here depending on the January trading update confirming £115M plus EBITA

If THG guide to £250M EBITA 2024 that would be impressive if along side they advise they can curtail capex until Ingenuity utilises existing capacity

£2.50 a share heading to £3 could be achieved 15 months out

Suggest this is relevant today with 9% shorts on loan, the II investors know all these £numbers, it’s when do they close and get out in front ?

It’s the one part of the business I can’t get my head around