Member Info for Okehurst1

Steve, agree it’s down to the players you list below , throw Iain Mc in with the Candyman, BS Charlie the 2nd

SP , logical post

Coldspy, I’ve switched off that Iain Mc and the Candy man made serious bids, both were funded by debt - THG couldn’t carry equity debt, this had to be a pure equity play

“Don’t forget he used to be an investment banker so he’ll have a financial strategy. And QIA believe that is the best way to increase the value of their shareholding they’ll back him rather than the markets.”

Think the poster calling it last time weeks before it became official gives them a dash of credibility - but it could be a ruse of course

There is a chance conversations are being had, it would make sense from recent events

City Spy called it last time, it appears the poster has someone
close to THG

Hardly any volume going through and on bad day for sentiment we drop less than a penny.

Looks like he has been warned off

Anyone looking in ….the Tweet said just as below

‘Apologies - cease and desist.

Cheers guys! all the best’

https://twitter.com/thecityspy/status/1593347604196343817?s=42&t=JqGUzx042rNChgcjFFgL_w

Thanks for response Ste, been a good debate
I needed my numbers to be scrutinised tbh

Dalcon, do THG need to spend let’s say another £250M next 24 months ?

I’ve got no idea but gut feel that’s going into Ingenuity to gear up for big contracts there rather than support the 2 main divisions? - ok there is an upside to spending on automation but that’s already in place for Beauty / Nutrition, heavy lifting capex already been sunk ?

Nb you can see why mouldy wants to let the GS expire
an activist group turn off the capex tap and this is spewing out some nice cash 2024

Musings ..:

Suggest we have to look at Capex
2022 £197M
2023 £133M
2024. £110M ( this could be higher )

It’s £440M over 36 months - I could be lite for 2024

That’s the part of the jigsaw I just don’t get, why drop close on to £1/2B on Ingenuity - am assuming it’s ingenuity btw
for 9% of total revenue ?

If a chunk of cash was for automation and they confirm the 25% head count reduction post spend that’s worth £90M a year but we don’t get detail of where / why we will spend £440M over 36 months

We can assume the Bank like the future numbers, ditto Mould and Lord Charles ‘Lucan ‘and Qatar

Just be nice of them to share with us

Ste, thanks for engaging, good to debate

I don’t we are that far apart on the £numbers, see what you think below ; I’ve tweaked EBITA down and lumped working cap/ cash exceptional’s / tax / interest / leases to show net operating cash flow

2023 £155M EBITA
£60M Net operating cash
Less. £133M Capex

FCF minus £75M

2024. EBITA. £210M

Net operating cash £145M
Capex £110M

FCF £35M positive

Don’t think you and I will be far out with those numbers ? - materially

What do you think ?

Ste, assume the £100M to £130M for 2022 comes in, what’s your call on the share price? Ditto the confirm guidance for 2023 EBITA ?

Any thoughts / detail ?

Always good to get other views with a breakdown

Ste, spot on ‘ gift from the gods ‘

That’s why it’s not a Short at these levels it’s just too risky, much better targets out there

Don’t disagree with the gist of your comments below BTW

The issue for the shorts is without doubt Mouldy could at anytime throw a Bid into the ring or as Moniman mentions QIA produce a TR1 increasing their stake

Moniman, that’s my tactics, Mouldy could strike anytime we just don’t know, I don’t want to lose the opportunity

If he has started conversations with the City the shorts will eventually start to get wind - THG is very leaky

The shorts will want out in advance

Appreciate there is some risk but feel the £100m to £115M EBITA offers support to the share price Q1 2023 at the £1 range

Then we are back to what is THG worth if he bids Q1 2023?

The only number we can go on / more importantly the II’s can relate to is EBITA, if THG say £165M 2023 and he offers a full 14X -in the bag for Q1

That’s £1.65p a share, he may have to sweeten but the market would say it’s fully valued at that level if paid upfront

The market redeploys the capital if it likes the sector and gets a full year ride somewhere else ?

It’s just will Qatar fund the buyout via equity ? It can’t be debt as THG can’t fund and grow Ingenuity

If Qatar won’t fund at that level where is the share price ?We should icome in with £100M to £115M EBITA and hit the £1 to £1.15p but we need a bullish statement on 2023 £EBITA to accompany the 2022 confirmation RNS

For what’s it’s worth, am with Golden on this one, let’s look at what we know capex wise

- £197K capex this year
- £130M capex next year
- 5% of Rev targeted for capex moving forward
- Capex focused on Ingenuity - in the main
- Ingenuity is generating just 7% of revenues this Qtr, it’s not performing vs the core businesses as yet

Let’s say Nutrition sold for £1.5B , there would be tax to pay as a capital gain not a trading gain so THG wouldn’t collect full $$

THG are currently only utilising 15% of Ingenuity space, remove Nutrition and Ingenuity goes backwards, they would need to attach a supply contract with the disposal, maybe 5 years - as part of the SPA ( sales purchase agreement)

So they Repay debt and fund Ingenuity for next X years, maybe spin out Ingenuity when market improves

Capital into Beauty for acquisition?

Maybe a special divided but is that Mouldy’s MO? Am not sure it is ?

It just feels messy, MM likes control, gut feel an MBO a makes more sense before the Golden Share expires, he seems fixated on capex to Ingenuity, he has his vision, doubtful he will get the support of the London public market funding the above?

It’s just when does he make his move if that’s his plan ?

Q1 2023 ?

Agree it looks dumb but El Salvador owes $21B and his
‘ punt ‘ on BTC was $109M worth $40M now

SoftBank dropped almost 10X that on THG shares

SoftBank make El Salvador look like Switzerland

Assets are there Ste, just need to unlock value - to get past the £1.20 level

Either Mouldy does or others will, tricky one to short