Member Info for Okehurst1

Rock,

There is serious relative value within THG, being fair I don’t think it’s Zero for shareholders, it’s who gets the upside us PI’s or Moulding and his cronies ?And what can they £pay to buy us out and will all the II’s roll with him ? I doubt that .

This is all about Mouldings agenda at the moment, he’s holding the cards ( and the joker being the Golden Share)

If he plays it and loses then he’s exposed, he’s just weighing up when to move, if he doesn’t then the GS expires.

What’s Mouldings agenda ?

If he makes a move for a cheap ‘take private ‘and tries to roll the II’s and pay off the PI’s would he get away with it and he funds himself ? When I say cheap like 60p as a figure

Personally I don’t think he would pull it off and his problem is if he loses -as he likely would -he’s then exposed for an EGM and he gets kicked off the BoD - II driven

The new BoD start the process to restructure / trim the Fat/ dump the vanity projects / sell Nutrition and create shareholder value
His GS is gone next September the process could start next year in advance

Gut feel we have 8 months before Moulding pulls the rabbit out the hat or he’s toast and a new BoD steps up to the plate, there is so much value within THG Moulding is just trying to manipulate so he can grab more of the upside from the hands of us little PI’s but I can’t see it happening for him.

Headline - Private Equity on pause as shell shocked banks pull back

Gist - the banks who have been funding PE are taking big hits as yields rise, Asda, Morrisons, Citrix

They show a graph where CCC paper is now 14% yield
even B grade is heading to 10%

There lays the problem for THG with a PE deal and why we are down to 35p, the £1.70 just wouldn’t have been viable and the THG were correct to turn it down from a fiduciary point of view, come next year THG would have had £2B of debt with at best 8% EBITA - 6% now - on £2.5B Rev requiring 5% Rev CAPEX investment

They would have struggled to have enough ££ coming in to service the debt

The £1.70 was a non starter

https://www.thetimes.co.uk/article/f0158e6c-470a-11ed-a9bf-432f673b24aa?shareToken=bcff9c6718bc43fe72da20041e0b2b1f

Thanks Jazz, v helpful snap shot.

New to MaB BB

Looks like the market has issues with the debt on the balance sheet , from last financial report

‘The Group continues to make pension deficit payments as agreed as part of the triennial pension's valuation with the schemes' Trustees at 31 March 2019, which showed an actuarial deficit of £293m. At the time it was agreed that the deficit would continue to be funded by cash contributions of c.£45m per annum indexed with RPI from 2016 to 2023. In 2024 an additional payment of £13m will be made into escrow, should such further funding be required at that time.

Debt

Following the adoption of IFRS16 in FY 2020, leases are now included in net debt. Net debt at the period end was £1,736m, comprised of £1,253m non-lease liabilities and lease liabilities of £483m (HY 2021 £2,013m comprised of £1,472m non-lease liabilities and lease liabilities of £541m)’

If we discount the lease liabilities / pension circa £3/4B

The net debt is £1.3B

Interim profits £50M

Energy costs up £150M

Anyone think this is a Buy ?

Appreciate any comments

Thanks

RAH, know your in THG so thought it was relevant example - this post is not about THG as such it’s just an example

The THG Form 8 disclosures earlier this year were an eye opener for me, seeing II LTH’s of THG go both Long & Short in the same day, with a rule of thumb ratio 3:1
Nb the Form 8 was helpful as it showed us the shenanigans the II’s get up to when under 3% long /.5%, short , not going to go there in detail that one of the Bidding entities via a 3rd party were going long / short as well in the same day, that was shocking it’s actually allowed.

Point being ,us little PI’s are cannon fodder to be ‘closed out’ if your in via a ‘synthetic ‘ position and many other games that the whales play to nick our money, we have no idea what’s going on below the surface of sub 3%/.5% and do II’s in Avacta lend stock to themselves in affect to drive the price down to make a margin whilst they wait for news? Am guessing they do looking at how they operated in THG/Form 8’s? Look at the multiple 40% plus swing moves in Avacta the last 6 months ?

Not too long to go now of course and any shorts out there will supercharge the share price for us as they close out

Dg, don’t think these broker targets have any real weight either way

The market has done its sums and we are where we are from an operational point of view unless we get a disposal/ full blown agreed takeover

Fair analysis

The market is waiting in the meantime - to hit your numbers below - and short /medium time line LTH Pi’s are hoping for a disposal of nutrition

Agree Steve, interesting point you make on the £250M EBITA

Assume they can push gross margin by 200pts as per conf call
then we need £3B plus revenue to hit the £250M EBITA so on £1.1B H1 and mid teen growth the market has made the calculation / time line

In the meantime we need a disposal event to super charge the share price

Steve/ Monty

By the end of 2023 THG will have around £350M of Company debt - give or take
There was no way they could have added more debt via PE @ £1.70, put aside who would want to stay behind and hold all that debt - even if 50% had to be bought out the debt levels would be heading to £1.5B on £2B plus total revenue generating 6% EBITA and the business model requiring 5% of revenue being invested via Capex, it was impossible to make those numbers stack.

The £1.70 was a non bid that had no chance of getting off the ground, suggest we have to switch off that the shares had a market value at the time of £1.70, it was never going to happen - hindsight being a wonderful thing

It appears the market is now waiting for the margin to increase and hold / or they dispose of Nutrition as an example and they pay off debt and focus on Beauty and Ingenuity

Suggest it’s put these in a draw until one of the above events happen

Good post SP, if I may add, Moulding appears to be a good employer as well and I think he genuinely cares about his staff and the Company, the latter is as demonstrated by him not loading the business with PE debt.

Think it’s fair to to say he doesn’t care ( anymore ) about the current share price, he’s focused on delivering his goals/ agenda and running the businesses.

The Molecatcher has to be the groundsman

Steve,
Think any of us on that conf call thought it was strange how they spent more time discussing a Xmas calendar rather than a quick helicopter view of the near £400M of Capex that will be spent this year / next and the subsequent return on capital on that investment vs the cost of that capital

The Iceland deal hardly got a look in for discussion ditto lots of other examples of where they should have spent on advising the market in more detail / if ever there was an opportunity it was then

Goes back to Moulding having an agenda which we don’t know about as yet

Top post Icecool

Just read article, the writer is upfront and is shorting Avacta
I was expecting some amazing dossier/ expose but there is nothing there other than;

Put aside the LFT fiasco / history of Avacta

The writer questions the LG deal and is that it for the cash ?
We know it’s stage payments based on performance and it’s been extended by LG - alongside milestone payments

South Korean JV, what was it worth? - we know that / ditto the cash value that the business just enjoyed but the writer didn’t research the amount , nor mention the equity held

Discounted Point deal to zero

Discounted FDA Orphan deal saying the market is ‘ only’
200,000 people for the Avacta treatment, no research on the value of the size of the market or mention of the 7 year exclusivity period / it’s doxorubicin / they may get a grant as well , just complete discount to £Zero

Then onto Ava6000, no debate on the success of the trial to date, up to 200mg/m2 ,attendees at this weeks opening at White City - relevant stuff in a confirmation way
The £17M in the bank end of June
No caveat that they burn £1M a month - so no raise

Ava3996 etc … Nada

I like to be open minded and listen to all sides of a debate and I think it’s good to be challenged on any trade I have, in fact I encourage it ,as my posting history demonstrates, also have no problem with anyone shorting if am on the opposite side to their trade.

For what it’s worth, the writer has gone Short - it’s not TW in this case - and I suggest the article is poorly researched and it looks desperate,gut feel they are underwater.

Just saw headline - no detail

‘ New Avacta Bear Dossier ‘

These boys must be in knees deep

AGL appear to have cutting edge tech to identify cancer cells - their RNS this week
Agree with PAH ,logic would say we need to see via the tumour rather than liquid but interesting development either way

‘The ground-breaking first ever FDA product clearance in metastatic breast cancer heralds a new era for personalised cancer care and provides the platform for ANGLE to work with our collaborators and customers to support further FDA submissions and the establishment of numerous specific clinical uses across different cancer types. By making the Parsortix system widely available, we intend to support the entire industry in its adoption of liquid biopsy solutions for repeat non-invasive diagnostics for personalised cancer care’

Not a side ramp -not a holder - but any AGL holders on this BB will know all about this new science, it’s fair to say AGL have a proven platform in this field - liquid biopsies - and have FCA approval/ authentication of the system

Forget to add, let’s not forget blood biopsies

Liquid biopsy. Testing a blood sample for cancer is called a liquid biopsy. You give a small sample of blood, and it is sent to the lab for specific tests. It can also show how cancer is responding to treatment. A liquid biopsy has less risk than taking a sample of tissue, and your doctor can do it multiple times. However, this type of biopsy is still new and it is not done for most types of cancer. There is a lot of research ongoing to expand usage of this technique

Mr A , good points

Agree option 3

As you say it depends on the organ in question, Bowl tumour is quite simple, pancreatic of course more complicated - I know this from personal experience

The NHS explain as below

a punch biopsy – a special instrument punches a small hole in the skin to obtain a skin sample to investigate a skin condition
a needle biopsy – a special hollow needle, guided by X-ray, ultrasound, CT scan or MRI scan, is used to obtain tissue from an organ or from tissue underneath the skin
an endoscopic biopsy – an endoscope is used to remove tissue, such as from the stomach during a gastroscopy
an excision biopsy – surgery is used to remove a larger section of tissue
perioperative biopsy – if consent has been given, a perioperative biopsy can be carried out during surgery; in certain circumstances, the sample may be tested straightaway to help guide the surgery or further treatment

It takes 2 weeks max for a biopsy report, am speculating they may well have tested bowl tumour cells post Ava6000 , it’s quite simple to obtain with no discomfort of note for patient.