Member Info for Okehurst1

Also …

Make a call on will Whey drop 25% this year from a 100% jump ? MM reckons £40M pro rata of cash on that

Discount the VAT to zero

Could be wrong but can’t see the serious shorts loading up at these levels, what’s the risk / reward for them ?

Steve & co doing buying/selling the pennies ain’t gunna do it

Based on FCF x 11 ish in its current guise, you could argue 45p to 50p is the base price

I’ve worked on £80M FCF less £20M capex everything else covered, don’t think that’s far away

Ovs the market will decide but that looks fair

Ohhha, that’s my point really

They have to move quick before Whey prices drop as it will cost them more, they have a small window

Financially engineered deal where they pay off debt , control Nutrition all of which which drives up the price of debt free

standalone Beauty

Them grabbing Ingenuity was the first of a 3 card trick I think

It’s a punt but as Steve points out these boys are exposed for a hostile bid and they have everything on the line inside Ingenuity

There is only one way out of it and that is to keep control and that starts with Nutrition, MM gave a veiled warning yesterday of what could happen, he’s saying if the market won’t value the assets then stuff will happen

Traders may play with this one to push lower who knows but it’s too risky for the II shorts to go heavy, their job is done, if PI’s can see the above they are always two moves in front, Shorts are the smartest boys in the room

Sit tight job now and wait for the action

Ingenuity has less than £200M of revenue without THG its bust, that’s fair comment

Ok there are contracts in place with THG but standalone and sold Nutrition and Beauty can give the new business to whoever they want and I guess new owners would be pouring over the contract on how to reduce the £400M they hand over to the Ingenuity crew?

Sir Leahy / Iain Mc and others have all been with MM for over 13 years, so they go off and form a ‘shell ‘ to acquire 49% of a business that has $1B of sales, they fund a placing in THG to split off Ingenuity they then give themselves the £75M back to Ingenuity ,we then find out who has rolled with Ingenuity and it’s the same main crew who put together Selkirk

Does MM/Iain Mc / Sir Terry have their eyes firmly placed on the £4B over 10 years and has this all been well worked out and do they move before the drop in Whey price by 25% adds £40M of extra cash to Nutrition or someone moves in now in advance of them ? Ovs make your own mind up as it could be just one big coincidence ?

Can’t see the Shorts risking it at these levels, the upside is limited, as Steve says THG is now basically a sitting duck

Why did the shareholders of Ingenuity set up Selkirk, they have to keep control of that £400M its crucial for them, it’s all been gamed out

‘ The strength of the Myprotein brand is reflected in the successful launch of multiple major brand licensing agreements, as well as strong offline sales growth (c.+29%).

Interesting question from an analyst to the 29% offline growth in Nutrition,

‘ are some customers switching from on line to stores ‘

MM acknowledged there could be, but online interaction is also growing

Average order values (+10% Myprotein UK and +8% on Lookfantastic UK) and conversion rates via Apps continue to increase (vs other channels), with 1.6m new app users in Q4 2024.

‘Average order values (+10% Myprotein UK and +8% on Lookfantastic UK) and conversion rates via Apps continue to increase (vs other channels), with 1.6m new app users in Q4 2024’

Looks to me in my opinion, Whey drops as expected and don’t chase low margin business and Nutrition turns, it’s a simple as that? Ideally with a new team without MM

APN is doing £90M Rev

THG nutrition can bag an £40M extra cash just on the input price of Whey, MM is saying they won’t buy business and was it 24% of all sales are now offline - need to look at my notes on that figure am out at the moment

Mentioned above I wish he would stand aside but he made a logical argument on how MP will turn around, will give him that

YSB

We add back the lost margin due the Whey increases it kind of stacks to what MM is saying

Nutrition is not chasing low margin business, the Whey price drops and it churns the cash, he reckons give or take the first 25% is Nutritions they will give some back over and above ish

Hi KB

That’s the cash element Selkirk raise that will be secured against the 49% equity if that makes sense

Sir Terry is PE player it’s actually simple deal for them, it’s just about cost of capital to buy the 49% and their carry percentage which is usually 20% of the upside

It would also make sense for Sir Terry to become the Chair of Nutrition( Selkirk ) same time.

THG pays off debt with the cash, maybe a tad to Beauty and who knows a special divi alongside shares in Selkirk

Iain Mc gave the market a £number without saying THG nutrition so it could 2+2 = 5 but there is a decent chance it’s as above, that’s my personal call

Interesting MM basically saying the market either values the group higher or/ and insinuating something will happen

Hi YIB

Like everyone am critical of MM and I wish he would resign his executive powers, however I thought he was quite candid in response to the analysts questions regarding nutrition

He’s flagged the extra cash that will be pure bottom line once Whey prices dropped and Tbf he explained why they would fall back and he explained about global capacity , it made sense

Ok so he’s told the market the £number is an extra £40M from the fall in price of Whey of 25% having jumped 100% last 12 months, we know from past calls that Whey makes up 33% of their gross costs , work it back on the numbers and it looks about right

Put this into prospective, Nutrition can bag an extra £40M vs APN who only generate £90M in sales but are £350M m/cap

They might try and nick nutrition for £750M as a number but they need a number that stops another bidder, £1B cash and paper should do it?

This all about the Ingenuity crew enjoying a ‘carry’ on the upside inside Selkirk and protecting their £400M a year, same time Debt sorted for Remain, it’s a win, win, win for these boys

Ovs just my opinion

Writing is on the wall … they will restructure Nutrition into another vehicle

Gist from today

‘Whey prices 100% increase, only seen twice in last what 13 years , expected drop of 25% in cost which goes to bottom line on top of additional manufacturers of whey coming in line locations including Poland etc

£40M of cash to be had in affect just based on raw material cost

The same boys who now control Ingenuity with MM are going to enjoy the ‘ carry ‘ on the 49% equity in Selkirk plus their initial stake money and whatever bunce they get from options

It’s coming ….they need to action before whey price drops

They are going to do a deal around Nutrition, it’s coming.

The ‘ fifth column ‘ was sent forward led by Iain Mc who has set up Selkirk with Sir Terry Leahy and others who are also involved with Ingenuity, many of the same faces

Writing is in the wall here, reverse Nutrition into Selkirk, check out Sir Terry’s background of raising ££, they square Debt, Beauty re-rates and the same players ensure the £400M flows to Ingenuity

It’s a smart deal

Good point Kbyk

It does highlight they have to split away Nutrition one way or another, it’s coming as it’s the only way MM can retain control with no debt and make sure that £400M flows into Ingenuity

We have the FTSE listing coming within 8 weeks or so, trackers / passive funds will need 7% of the total stock that adds £ liquidity coming into the share price

Beauty is looking a decent business, capex of £10M a business unit is welcome, the financial engineering away of the debt around Nutrition is coming.

You have to hand it to Cube their model worked a treat with THG, they called the bottom and made ££, the risk / reward has gone for them

That same risk/ reward is now set up the other side for Longs

If Beauty was stand-alone suggest it would be worth 80p a share

Structural event with Nutrition has to be a consideration

Of interest

0% UK VAT protein powders Tribunal judgement, 9 January 2025

· The Group notes the First Tier Tribunal decision in Global By Nature Limited, selling protein products under the 'Sunwarrior' brand. The Tribunal ruled that protein powder products sold by Sunwarrior should be subject to 0% UK VAT, and accordingly, Sunwarrior was eligible for a retrospective VAT repayment.

· Since the VAT rules in relation to Sports Drinks were implemented in 2012, THG has paid UK VAT against its powdered products in line with market practice and HMRC guidance relating to the VAT treatment of protein powders. In the event that THG can make a successful claim by leveraging the arguments in the recent case, a 4-year retrospective repayment claim for two key Myprotein powdered products - Impact Whey Protein and Impact Whey Isolate - is estimated to be worth c. £30m.

· The decision in its current form does not automatically entitle THG to a VAT repayment. An update will be communicated as and when relevant.

I have more faith in the shorts voting with their wallet

Is there an investor left who trusts a word out of the mouth of MM never mind the useless Chairman, they are both a disgrace to the London market

Glad to hear GB

That’s right Cong , kind of doesn’t matter but

sold and shared the data ,made money and on this occasion so did others

We are all here to make money not lose it