Member Info for Okehurst1

On a pure Commercial basis , he only has 52 weeks then he’s toast

That’s the time horizon

At £500M m/cap are we going to £400M or £350M ?
I can’t see that level holding but are we going to 85p like where the Chairman bought in 2 months ago ? Can’t see that either without a deal of sorts

Moulding needs a deal and the City knows it

Fully on board with sentiment, feel the same, us little PI’s don’t matter in his game plan, he’s demonstrated that point - he does appear to have genuine passion for the Staff / Employees in the business

What we do know though is MM can pull off deals and he only has 52 weeks to pull something off that suits him.

I don’t think we can write off a deal happening out of nowhere, MM has form.

Thought it was telling City Spy popped his head up again, from experience he tends to communicate short term trend /momentum

My read across is the ‘ City ‘ had made its $$ on Shorting THG and it now sees THG at £500M m/cap as either a full blown takeover target / it will sell Nutrition, as such the risk to Short has increased on a risk/reward ratio

Throw in the £ is extremely weak think we can assume with the sum of parts worth so much more than the £m/cap then a rabbit out the hat deal is not off the cards - one that MM finds attractive

Think we can all agree his £800M SoftBank deal was a Gem, he negotiated his own £800M bonus post IPO, throw in the £Billions he has secured to put THG together, no two ways about it he’s a hustler and deal maker and he has got 52 weeks to be in control of the outcome, after that he’s exposed.

No idea on exact time deal happens but after yesterdays Conf call feel some big event will be announced within the next 6 months or so.

…. The shorters must be planning to go long, we know he only tweets when the City moves direction

He’s like the canary in the coal mine

One sniff of a serious Bid and MM likes the terms and this is gone, tricky one to be out of and not much head room for the shorts

https://twitter.com/thecityspy/status/1570482055204737026?s=42&t=m1byk8EZOUQgqIA4kX2Nlg

Was just about to post that coldspy

I guess it’s the rabbit out the hat with ££ so battered and going lower THG gets a complete takeout Bid that the BoD recommend

Thanks Golden

So that’s a chunk of the £100M p/a banking costs they mentioned and the £550M is just sitting in their account generating 1%

Is that your take ? I’ve been trying to work out where that £100M is generated

Putting this all to one side … it was a good job Softbank wrote that cheque, it as one heck of a trade when you look back
valuing Ingenuity at what they paid in at?

THG wouldn’t have been able to throw these global distribution centres up at the rate they have been without that extra £cash - Cult / Bentley etc was from IPO cash

Golden … apologies not explained myself very well
they are not paying interest on the loan ? And they won’t use the £500M plus but it their covenant lite just in case
That’s my take from today ?

I need to re listen to the web cast

They said they won’t need the term B and it’s un used
Much smaller scale but from experience you don’t pay till you draw , in effect you don’t draw from their account to your account but pay a ‘ fee’

They said they will £100M a year for banking / funding I need to re listen was that when funds drawn down

No way £2.7B Rev for 2022

Based on the call today it’s £1.2B H1 , same plus mid teens growth H2
£2.5B /£2.6B that’s what directed to

Golden
They have secured the term b loan but have not drawn as they won’t require it’s there just in case that what they said
Other wise they would be paying high finance on £550M not be used

It’s a term B loan … you draw as you need, will be higher margin though

They would just sell Nutrition/ factory / web sites / clients n App as part of saie , if the buyer wanted to use ingenuity for a while fair enough

Tbf that’s not a problem to stop a sale

Ingenuity - I think it’s smoke and mirrors personally
they build the distribution units for their goods/ ditto robotics
- which will be Ocados by the way not theirs
and store / deliver from same, personally I’ve switched off re Ingenuity

They have the £funding to complete the big stuff capex wise is what they said - £130M 2023 and basically they are there

Let’s say mid teens growth from now to then - what they said

2024 they doing £3B plus @ 9% - they reckon they are 200 points up H2 this year

£270M gross cash EBITA level

That’s if Nutrition not sold meantime

Decent that …

80% of all is sales is from existing customers on their App
20% sales Beauty are USA

Golden, I was satisfied today, it was a 3 hour call
I understand stuff much better as a result , including the cash
we have no worries there
Ditto capex they complete the big roll out in 2023 spending £130M which is all funded
They have £170M plus the £44M
They say they won’t need the term B note £550M it’s just there all covenant light

Sit back wait for nutrition to get sold / not that bothered if the share price is 35p or 60p am in till the big event happens - probably around Nutrition disposal

The shorts won’t over push this one it’s getting into dangerous territory for them but it is a traders share at the moment within ranges for anyone into that

Agree Steve

Whey to go down - it’s well past it’s highs and dropping
Sell nutrition £2.4B

Whales - keep bagging them for Ingenuity bin chasing small companies, although after today I don’t care that much either way with this division

Beauty - the Golden Goose , this is becoming a serious asset

Nb Golden don’t disagree with your comments re IPO / tech

They built the tech for their use and now sell the service to others , is it unique ? Is any tech ?

It adds to the efficiencies of both main divisions, which if the said we shutting it down tomorrow and just focusing on nutrition / beauty I wouldn’t care

Golden
I’ve switched off about ingenuity, it’s not worth trying to fathom it out - growth wise

These guys will sell Nutrition, after today am more focused on Sweet Whey price, that continues to drop - its down from €1400 tonne to €900 last 6 months, they don’t hedge as they think it will head back to average £450 then the bunce profit gets made , hence H2 profit is up 200 basis points from the fall in whey above

If they get 4X then happy days, pay off debt , drop £whatever into ingenuity and spin off, £500M for Beauty - what would that be worth standalone ? Serious ££

Think you put £zero value on Ingenuity after today, if the above happens then it’s a bonus if it’s worth anything

Think you have to listen to the conf call, will help understand the business
It’s defo not a tech business but it uses tech to become more productive and then offers those skills / infrastructure

Good example is 30% of all orders are fully automated/ robotic and growing

70% of all orders globally delivered within 24hrs

Manufacturing Nutrition products so vertical model

Same with Beauty, they own their factory, R&D , manufacturing / marketing / sales / distribution all in house
Eventually these guys will majority robotic / automation it’s cost ££ to set this up , they are number 1 in the world D2C in both beauty / nutrition

If it was possible to buy the whole business for £500M it would be cheaper than trying to replicate

Re the buy out
Following the Conf Call I’ve changed my mind, it’s not happening with Matt

On one hand they said the offers were fully funded and then said but it would have been too much debt at this time for THG.to deal with, they actually made that point / their advisors said same

They then laboured the point over Nutrition standalone value and went through the market valuation

Think anyone on the call could surmise their game plan is to dispose on Nutrition as their target

That’s my take away on strategy, they will pull that off before the Golden Share expires not take this private

Gapping up

HH
You make a good point gist re retain beauty but they may be open to offers for nutrition
It’s out there now

Imagine if they would have done yet same value comparison for Beauty btw , Nutrition worth 4X at low end and £2.4B is a joke heavens knows Beauty is worth at £1.2B and 20% annual growth

Sell nutrition for right price even £2B
Pay off debt

Beauty - Move listing to USA £500M in bank no debt

Direct list ingenuity USA drop it £500M
Special dividend £500M

Hence the shorts will scale back here