Member Info for Okehurst1

Would we say below is fair comment?

THG EBITA currently dropped to 6% plus, BoD tactics to keep their returning customers happy - short term but as with all commodities eventually input costs will fall back, whenever that will be?

THG need $$$ to grow Ingenuity and gut feel MM doesn't want to sell the Group in its entirety hence he has held on to his golden share for the the short term to control events - fair comment ?

So the only way forward has to be to sell Nutrition , be that PE or trade, who will pay the highest X Rev ?
I suggest Trade, THG Nutrition is the largest D2C in its sector, Nestle and others buy on 2X maybe 2.5X and enjoy a 3X to 5X on their share price
PE will want to grow the business to IPO on the next bull run but Trade gets an uplift plus the enterprise value day 1

Sell Nutrition and Beauty ends up with no debt ,£1B War chest and heading to £2B rev 2023
Ingenuity spins off on to Nasdaq - serious rerate and MM is vindicated

THG short term - 3 months - is now a play on them selling Nutrition, without that happening the shares will be in a tight range, its too risky for shorts

To round up, can MM afford not to sell Nutrition ? Personally I don't think can, he needs to let it go to fund the future otherwise the market starts to look at the short term 6% EBITA and that's not helpful for a serial deal maker , equity /cash is his oxygen, not ticking over for years.

Nutrition has the sale sign up, my call , its gone ,the next big announcement

WPP are selling marketing PR services not Robotic Fulfilment centres storing clients goods and delivering the ‘ last mile ‘
They take photographs, manage websites, advertising, social media marketing, stuff THG do but there is more chance of GO DADDY Websites entering this game than WPP investing £1B plus in infrastructure tomorrow morning to replicate Ingenuity.

Another non story off the Sunday Times for whatever agenda the persons paying a PR company to get on the front page of The ST
- probably a WPP PR division

As per Captains post below

It’s been a painful lesson for me, lost over £40,000, live and learn stuff.
I don’t trust a word from any AIM Co via social media, even RNS’s are discounted until I can see the cash flow in the audited accounts

Just one point on the last accounts - mentioned this before

The Food Tolerance business generates £3M a year profit , PLC costs are £1M - all in the accounts

CD 4 / Covid with Alva , burnt the cash away
Remove PLC status as well as above and the
FT division is a nice standalone business, just the muppet BoD have no skin in the game and their agenda is not aligned with the owners

TW,
Same thought process my side.

There may be however one more play within Omega, they sell CD4 as they have intimated and surprise on the upside £value , then sell the remaining assets , however that’s structured

The BoD don’t have the capital to trade their way out of this one and maintain their £packages, hence they are so quiet, something is afoot

Not without risk but breakup value could be north of 10p a share

Suggest linking BOO to THG is not apples to apples ,think we can all agree on that point.

3no operational differences - put aside the sectors

- BOO ( as does ASOS) has to currently deal with 40% returns
that’s steep

- SHEIN , say no more

- USA Fulfilment Centres

The above will get sorted over time but there is no compelling reason today for PE to Bid up BOO and then sort the above.

THG has its own issue's, predominately it needs ££ to keep the aggressive growth plan moving especially Ingenuity
Selling Nutrition opens the door to executing the next stage
Spin off Ingenuity, war chest Beauty

BOO doesn’t have those options so needs to use all it’s free cash flow to fund their next level restructuring over the next few years - I am sure they will be back up there within 3 years

Nb the market as a whole is waking up to the binary trade
It’s estimated over 6% of the shares are short

83M shares is some volume to close, shooting fish in a barrel at them moment

Hippo - fair point
Suggest the investment case at current levels is based on sum of the parts

We know the BoD are going to break up the group and potentially sell off a division and Direct List Ingenuity / repay debt ? Fund Beauty? - speculating

It’s that or they sell the group as a whole as/ when/ if the bids increase

Thanks for highlighting 2ph

Within 8 weeks the BoD will break up The Hut Group
each of the parts will be valued independently.

The market can then value each business peer to peer

Nutrition being sold off has to be the catalyst

Repay £500M debt , drop £500M cash into Beauty which then has
£1B war chest and heading to £1.5B a year sales
Beauty achieves a full listing / indexed

THG need the £cash to ensure they can do a direct listing of Ingenuity on Nasdaq and same time renegotiate a ‘ fair ‘ deal with SoftBank who participate in this one transaction

There is no commercial logic to keep the current structure on the LSE, London just won’t ‘ever get ‘the business

Obviously the BoD are aware and hence it’s happening within weeks

The BoD must think the sum of the parts as above are worth more than £3.50 assuming that was the highest bid to date

As SP says, watch for the Red Dot each morning news on above inbound

Posted 4 hours ago

Lists the headline £numbers

Adds

‘ somethings speak for themselves ‘

THG Chairman today ;

How much is Nutrition worth on a sale ? More than the current m/cap today ?

Ditto Beauty Standalone

‘THG Beauty, the global number one pure play online prestige beauty retailer, saw significant growth over the year, active customers around the world rose by 2.3 million to 9.2 million. THG Nutrition, the world's largest online D2C sports nutrition brand, grew its active customers from 6.3 million to 7.2 million around the globe’

Is Bant’s related to Pete Best ?

Almost feel for them ..

At the current growth rate they will be approaching
£3B Revenue pro rata 2023 @ 10% EBITA
£500M cash in bank

Enterprise value just £750M !!

No wonder they are getting bids for the lot

They had a good run mind …

SP

Thanks for updates , appreciated

Nutrition holds the key …

Sell that , fund Ingenuity to list Nasdaq , pay off debt
£1B in bank for Beauty

That’s where this is going

Ingenuity moves to Nasdaq ?
£100M £ARR x 10 ?
Forward guidance for 2023 at current growth rate could be £200M ARR end of 2023 , serious £value in this division

Nutrition gets sold , they have had the numerous approaches

Beauty retains quote

‘As part of the announcement, we set out our intention to commence a separation of THG's key business units and we are on track to complete this during H1 2022. The separation will simplify the corporate divisional structure and provide the Group with material optionality and the flexibility to enter into future strategic partnerships to generate value accretion for our stakeholders’

Jcb

Spot on … it’s the boggy man for the shorts