Member Info for Okehurst1

2Phevs

Thinking of stuff connected to FSA U.K. plus consumer feedback

Especially if it’s novel ranges, guessing they have to run multiple consumer testing programmes / tweaking the ingredients including max the protein same time attempting to control costs

Wonder what input Iceland added to the process ?

https://www.food.gov.uk/

Agree Golden
Just wonder - if any - is there any technical IP that is joint owned ?

If it’s all THG no problem, saves redeveloping - the 3 year thing is not explained - why it took 3 years to develop the range, I’ve no idea why ?

THG tell us very little at the best of times

We don’t know the full T&C’s of the Iceland contract
They have said ‘exclusive’ but surely that is U.K. only ?
Iceland is 2nd in size U.K. for Frozen food, maybe they have took the view the potential contract size is worth the exclusivity ?

Guess work but can THG take the IP they have learnt - via this process - re badge and offer globally to international retailers? I’ve no idea tbh

Semantics to us little PI’s who have no influence on the BoD but interesting debate all the same

Steve
Can we do a new range / same concept with other food retailers in U.K. ?

Hi Golden,

You defo have a good insight into the Nutrition market THG are moving into, a good post/ links yesterday again.

Know you have mentioned this before in passing but what’s your view on the IP with the Iceland range actually being generic - so to speak - and we can rebadge / package to sell to others ?
Not full like for like but the concept so to speak ?

What’s your call ?

Iceland saying they are confidant in this climate, THG go live with their new JV this January, it would be interesting to see some forecasts on THG side?

Iceland CEO bullish

‘The company expects to outperform peers in terms of sales during an economic downturn. In previous recessions, cash-conscious shoppers have traded down to cheaper brands and bought more frozen food — where Iceland is the second-biggest player despite its small overall market share’

https://on.ft.com/3fE7hq7

Nice research as always Golden - thanks for sharing

Looks like European market has decoupled from USA - feels that way on interest rates

Impressive

Nice that THG are expanding in USA - 25% of revenue currently

‘US jobs growth rose at an unexpectedly rapid clip in October, defying expectations for a larger slowdown as the historically tight labour market again showed resilience in the face of the Federal Reserve’s aggressive efforts to curb demand.

The economy added 261,000 positions last month, according to data released by the Bureau of Labor Statistics on Friday, more than consensus forecasts of 200,000. The figure was down from an upwardly revised 315,000 in September and 292,000 in August. On average this year, the economy has added 407,000 jobs each month, compared with a monthly increase of 562,000 in 2021.

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

Nb … wouldn’t bet against a cheeky Bid by Mouldy but would rather we run into Q1 and see what 2023 guidance is

Wouldn’t bet against this guy though pulling a rabbit out of the hat

Hi Golden
It’s a good point and was thinking same - disruption

With CEO’s / Management teams in each distinct division was thinking does it matter to the operational side ?

Am not sure it’s material? Customers use the Apps and the majority will have no idea who THG actually are?

Q1 2023 he pays more - let’s say his backer pay more, guess it’s down to their appetite to go Q4

# 2023

Surely it has be Q4 - this month - if him and his backers are going to do an equity cash offer ?

Come Q1 2023 and assuming £160M EBITA coupled with the market turning then he has a small window to go for it ?

We should be £1 plus by Q1 2023 with 2022 EBITA confirmed / guidance for 2023 EBITA as anticipated

We could get to £1.40 on hitting 2022 EBITA and the market having confidence we can achieve 2023 EBITA target

It’s almost now or never IF that’s his game plan, if he leaves it till Q1 2013 this runs away from him

Starting to toy with the idea I may prefer he doesn’t Bid ?

Jury out on Ingenuity but if the CEO running this unit can deliver, THG can squeeze the gross margin back to 9% at group and growth is say 15% and we get that cost cutting the £numbers could be looking awesome down the road

Lots of ifs and buts … does kind of show the opportunity here at 58p

Just on cost cutting etc

Touched base before ,there was a paper from an analyst that THG had said they can cut 25% of the workforce within 2 years as they increase automated orders - currently globally at 30% - Golden touched on this the other day

2,500 staff @ £30,000 average cost with NI/ pension contribution is a whopping £75,000,000
Mouth watering and material £number, pure bottom line level

If they are at 30% automated now maybe it’s possible?

Knowbody, agree it’s been an opportunity to acquire stock at levels that make the risk / reward attractive

Will be interesting to see the market reaction to the 2022 EBITA level - £100M to £130M
that puts on 8X today at bottom of the range

IF … same time they also forecast £160M + for 2023
that puts us on 5X today for next year at bottom of range

If the market is at 14X it does focus the mind on how cheap to the market in general we currently sit.

We either gap up, Mouldy shows his hand with a Bid or the Golden share expires and Mouldy is exposed

As you say patience, that’s the key word, I am quite relaxed after last weeks RNS.

Is Ste2k ok today ?

Suggest the market is working out in real time that interest rates in the U.K. / EU / Canada / OZ and NZ won’t be materially above current levels, yes they are going up but we are getting close

If the BOE raise too much it could drive the £ lower by default by a creating systematic risk

USA can cope - 30 year mortgages

We could have a continued period of food producers securing higher margins / price increases as commodities continue to drop and none essential goods under pressure as the public prioritise.

Suggest that suits the THG model, Nutrition and Beauty

Blue …

Market digesting news ?

Think your right 2Phevs Ex USA is decoupling policy

Don’t think the market has digested that possibility just yet