Member Info for Okehurst1

Monty, but the acquisitions are going to generate up to £130M EBITA this year, they have been decent bolt to the core units to help generate £2.3B this year
- as on separate post today, provably much higher EBITA profit, Ingenuity holding them back

Ingenuity has 8 of its targeted 20 clients ( Whales) in the can, the business then focus’s on ARPU , all in place to deliver

Monty
Moulding told us in the last conf call he is letting the GS expire
- Sept 2023

Monty, decent post for a debate.

I would argue we are not like for like with Ocado as a business.

From a helicopter view we have 2 distinct businesses in Beauty and Health both with a pretty much vertical model focusing on product development, manufacturing, marketing ,sales via D2C channels, these operations will generate £2.3B of revenue this year and are the largest globally in their sector (D2C) and will generate - we are told - in excess of £100M to £120M EBITA this year
Nb saying in excess because ingenuity losing $$ and reducing our EBITA on costs that are not capex within Ingenuity
The market value these business combined via £EBITA metric’s / DCF

Then we have Ingenuity, it’s enjoyed a £Billion plus of cash invested, £197M this year alone, £132M next year and as a result THG have a global distribution and semi automated network set up to sell the products from the 2 core business’s and to offer same service to others

Ingenuity is valued $Zero by the market today ,it has its own CEO who is tasked with increasing ARPU / average revenue per user, as such they are targeting larger Multi National clients

Fully agree THG is massively undervalued when measured against Ocado but not as a full like for like comparison

Whilst it matters … it doesn’t matter

Debating if it’s 444 or 222 whatever

Ingenuity currently valued at £zero

Discount to £nil

Ingenuity valued at £zero today

All bunce from here if the new (ish) CEO restructuring works

Looks like a decent plan to me…

One big £contract, all we need.

£1.8M worth of shares bought today and we bump 7%

Say 125M shares Short

We should hit £1 at current rate, may only take a few weeks into December

There could still be maybe 110M shares outstanding ( short ) at £1

No way they are getting out of this stock without losing ££ from here - or giving up profit
Some underwater others giving up profit

9% Of total stock - Short

Some questions on shorts % outstanding

If I may bump 1 Pencils excellent research from last week

Just £900,000 worth of shares purchased and up over 7%

No idea how 9% shorts close out

Are we in auction ?

39p looks like it was the bottom ( ish )

Nice trade by Mouldy and his M8’ QAI - worth the Flak for not engaging with the City

M/man
Agree, I don’t care if we don’t get an offer off Mouldy, we should get to £1.20 within next 10 weeks on fundamentals

Guess it’s down to how much Qatar want to pay to get a controlling stake IF it is them who will fund ?

From an allocation of capital point of view - as a PI- personally I don’t want to be out of this at the moment, the trend is up and there is a fair chance Mouldy makes his move within the next 3 months

More than likely after Xmas trading but who knows, he’s a maverick entrepreneur, I don’t want to bet against him.

£EBITA or Mouldy Buy Out, the rerate is ongoing to £1 plus

One or other

9% plus equity Short

Brutal squeeze on the Short trades - must be a tipping point for even the 3:1 funds ( long /short ) where they trim their short position ?

Fair comment Golden - not like for like

THG has the global infrastructure in place, we just need the Ingenuity CEO to land big whale contracts, the heavy lifting has been done with the capex - Ingenuity currently valued at £zero

Meanwhile the ‘ core ‘ business pushes on increasing EBITA

Whilst Ocado not a complete like for like of course, it’s fair to say there are similarities in the way they operate - storage./ automation on behalf 3rd parties

The big short term disconnect for me is THG will generate positive EBITA and Ocado won’t

For THG to valued at close to 10% of Ocado is nuts

EBITA £100M to £120M for 2022
£160M +. 2023

Or

Mouldy / Qatar throw a Bid at shareholders

One or the other sees us past £1 to £1.20 over next 8 to 10 weeks, decent return from these levels from a business with £2.3B revenue - mostly paid up front limited credit given - that has £670M cash in hand, coupled with historically Beauty always doing ok in a down turn plus it could be argued processed Protein / Nutrition is a sub sector of beauty by default

One way … up

Schhh … don’t tell anyone Golden

A/ steel out of interest, what’s the next technical support level to break through ?
And the same to get over the £1 ?

Grey area but interesting to know - thanks in advance

Hi 1pencil, interesting view, I hadn’t thought of ESG targets and THG offering, will read up, thanks for sharing.

From a share price prospective if THG confirm 2022 (and 2023) EBITA as they forecasted 2 weeks ago then we should see the rerate continue

Are we 14X EBITA ? Or higher ? Or lower? No idea
14X looks like the market average for the sector?

If THG confirm £165M EBITA for 2023 then we should be around £1.60 sometime next year - technically we should

Suggest it’s only going to be the market being comfortable with the £EBITA that gets us there outside a Bid ?

We get limited Info off THG so EBITA is as good as it gets, plus the market uses that benchmark to value companies / sectors

If a mixture of 15% growth ( mid teens we were told )
Commodity prices dropping
Cost cutting - head count especially, due to increased automation

If the above helps us get there then we are not that far away from 3X above current share price some time 2023, possibly higher this time next year as the market looks to 2024

Mouldy is going to have to pay more if his target is private, he’s got 1 shot, it had to be attractive, Gambia , Elf demonstrate what the value of THG should be, both decent benchmarks for us PI’s to follow