Member Info for Okehurst1

Suggest there is not much skin left in the game for them the Risk reward is swinging the other way
A private buy out could see them take s big hit
The upside is small from here

- Personally I don’t have any issues with shorting it’s part of the game, am not brave enough or smart enough to play but they have a role to play in the market and it does allow for longs to buy in at lower prices - from a high

The Quant boys will do what they do because they can in a share with a small free float but that will change once golden share expires

I’ve got my average to 52p and in £higher then planned but tucking these away after today.

Golden share - he ain’t giving that up he’s running it to expire
He knows just on nutrition alone it’s worth 4X sales standalone minimum - market price U.K. higher elsewhere
On £600M that’s £2.4B
Throw in whey prices dropping and they manufacture their own stuff

THG Beauty looks a real steal … growing 20%!
High margin
Expanding in USA

We know ELF is a fraction of the size and worth $2.2B and was
at ATH last night
Even in 4X sales Beauty is worth £4B plus

As such he ain’t letting that Golden Share go … it will expire and someone will buy this up or he loads with debt and takes private

Feels like Sports Direct at 35p time ( today )
You take your chances but gut feel from conf call this will gap up as Investment houses report back

For LTH it’s stick the share in the draw, we are funded ( no rights issue )
Margins on the up / Whey down
Growing 12% to 15%
Big capex coming to end

At £500M m/cap it’s a bargain on a risk reward basis

Phew ! Think the main topics covered
Didn’t touch on Matts final paragraph
He’s human … obviously the criticism of him being a fraud has hurt, he feels the Sunday Times are turning and cutting him some slack as they couldn’t find fraud as it wasn’t there
He doesn’t mention it’s the ST but we all know who it is

Would we agree on below points ?
Have I missed anything ?
Reported wrong numbers to the BB?

Debt / cash

£170M and £44M from freehold sale
Term B loan is covenant light they don’t expect to draw the £500M

Capex

£130M next year, that’s the end of the big spend
Finalising the big distribution centre globally / stocking

Cash flow positive 2024
Capex reducing ( as above )
Margin this year H2 increasing by 200 points

Beauty

20% growth H1

Nutrition

Mid teens growth
Whey price down from €1400 April to €900
Long term it’s €450

Summary

Once they build a distribution centre the next cost is stocking same, they then enjoy the cash as it recycles
This is why the 200 point profit increase is important
Whey prices dropping is key for nutrition
They don’t hedge
Nutrition is valued by the market at just .2 X ( yeah that’s .2 )
4 X to 5X is U.K. valuation elsewhere
Smaller German competitor went for much higher
USA wouid see much higher than x 5
They manufacture for others as well

Beauty is the gem, 20% growth H1
Owning the manufacturing plant in USA
Having the distribution centres over there
USA market now 20% of sales
30% of all sales now outside U.K. and growing as they have global distribution centres

Ingenuity

Looks like they are focusing on ‘ whales ( their speak )
They have 7 out of top 20 brands in sectors
Targeting increasing revenue from these clients adding more of the 13 left of the 20 looks like the plan
Maybe being selective not looking at smaller clients
( that was my take )

No I missed stuff off but that’s the main highlights

That’s my call Blinky

This is diet cheap

Fair doos … the Sunday Times had it in for him but as he says they are now saying privately maybe THG / him is not a fraud

He was asked the question , he had to answer

He used Mike Ashley as an example and he will get there

Fair comments off Matt

Matt chatting openly

Some good questions here

Beauty now …

Key numbers

H2 gross profit

200% profit improvement

Golden share …. He’s going to let it expire

Divisional margins

Onto Beauty

French analyst asking a question

Hard to understand his English …

Capex £130M is funded

Term loan B is covenant lite … but they don’t need it
they discussed the basic terms

Looks like the £170M and £44M sale of freehold is all they need

Some excellent questions off II /banks

Shorts or long need to listen in here

Super strong - Matts words for U.K. market ( THG nutrition)
Australian seeing phenomenal growth ( their words )
USA solid progress
Benefiting from New distribution units these regions

Manufacture nutrition for other people - I didn’t realise

Defo whey going to €1400 hurt nutrition
Now it’s €900 and dropping it’s good news
They don’t hedge - important they ain’t tied in

Usually €460 so they wouldn’t forward buy

200 point upwards on the margin across whole group
2023

110 points saving next year as no need to fly products around the world - as new distribution centres open

Plus savings as automation increases

200 point increase in profit margin

Going quite to be fair up to now

Latest price €900 whey tonne

€1400 was April

Next year they see 200 point margin benefit