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This is a roadkill stock, now is when you punt, there is risk of course, nibble away build your position, sit tight and wait for the next capital event, good $ to be made if your have patience

I don’t think MM cares a toot about his fellow share holders, I don’t think he has any support left even on this BB and the Chairman is just as bad, he’s beyond a joke

Why should MM bother chasing IR, he’s getting his £400M Rev from Remain, Nutrition and Beauty will be what they will be and he will restructure debt and the II’s get their pants pulled down like everyone else and are toothless

If the TU numbers are very bad then a slim chance the II’s start to push but MM has the BoD in his pocket so where does that go

Personally I am waiting for the next Capital event and maybe 250 inclusion / tracker funds, not banking on a full take out but a part sale to clear debt, I can only dream that MM gets the boot he has to be one of the worst CEO’s ever from a shareholder point of view

If we take the view MM nicks 20% of top line revenue for Ingenuity- I’ve no idea if that is a market rate on nearly £2B business

Then almost 25% of top line revenue for admin / marketing

£900M between the two ,you would think there is some fat in the almost £500M a Year administration line ?

Relative wise it’s a nuts number

I do wonder does MM have a clue on how to manage these costs?

If the numbers are bad on the TU we have to hope the II’s have had enough of him and they grow a pair for once

The market is expecting a car crash, will be interesting to see

Plus THG was always leaky

If it’s worse than anyone expected other than Steve then we have a chance the pressure mounts on MM / TGL

We have to wait till the 16th maybe to find out

Would almost be worth bad numbers for MM to leave the BoD he’s just not good enough, he has to go.

Yesiam

There is risk MM tries to hold both together but does that work for him, especially as he has been weakened within Remain?

He really needs to do something with the debt, some financial engineering with Nutrition that keeps the gravy train payments to Ingenuity going and the lenders / shareholders off his back … and he makes a few quid himself makes sense

Steve, your coming across a wee bit desperate, much better when you focus on the contra argument of the data, don’t get sucked into trivia like other posters

I think you have some valid points when you open up, more helpful if you focus on data

Either way net interest payments are not £70M as you point out but they are £34M not £50M

We had a repayment of debt in October of £22M then give or take its a neat £50M pro rata + of extra cash IF MM can financially engineer a capital event, assuming they repay £20M plus a year of capital

Ok they lose FCF from Nutrition but some of the lease liability goes as well, what’s left is highly cash generating Beauty, I would argue we could see light to £90M maybe even £100M FCF in that operation

If we can see that then MM must have his spread sheet all over it

To me the deal that works is to raise $$ in a shell and purchase Nutrition, Selkirk fits the bill but that’s not nailed on

if it’s not them it will be a.n.other

Page 28 Demerger Doc

Net interest paid of £34.9 million relates to interest payments on the term loans, with interest payments partially offset by interest received on cash balances’

Interest payments are not an issue, but THG has a cool £50M of extra cash without interest and debt repayment, some kind of financial engineering makes sense

Polish

Remain has risk but the reward here is decent, Remain will get restructured to settle debt, it’s a logical assumption

We can now measure the £FCF post that event because they have told us quite recently in RNS’s what the current FCF is and the debt repayments/interest paid etc

and just as importantly the dreaded capex is now just £20M

That’s a gamechanger for THG so deal with debt and they churn cash

The risk / reward is accumulate at these levels, Remain ain’t going bust, sit back await the capital event, switch off from the noise unless your a day trader like Steve

Btw yeah I like to make $ and win

Fair point Rock

My view, if Remain under performs the market markedly -U.K. on line sales estimated up 20% over festive period - then the pressure mounts on MM to step down, the majority of II’s have not supported him moving forward inside Ingenuity

Recent RNS’s they indicated £77M FCF and £20M capex suggest other than margin / sales they are the 2 main data points to watch, everything else is smoke & mirrors with MM

Then value the business on the FCF forget EBITDA that’s just earnings before paying your bills

That’s why Nutrition needs to be restructured via a capital event that takes out the debt in Remain which then becomes Beauty , remove the net £29M interest payments and £22M capital repayments which was the most recent, then all of sudden Beauty heads to £100M FCF with maybe £10M capex

The bunce on top is can the standalone / restructured Nutrition achieve a pro rata valuation to APN and other peers?

Investors position themselves accordingly, do they think the above is feasible and have II’s had enough of the MM jam tomorrow story? I think he’s ran out of runway and the next stage of restructuring is underway behind the scenes in part driven by the need to sort the debt out

Suggest the time to buy a single line road kill stock is when the last bull sells.

THG set up well for yet another good run up on the next capital event, sit back and let the shorts carry your water, sell into them trying to close, works every time with THG, just need patience at these levels.

Can’t see it being Selkirk they would disclose ?

If the stake was too big to accumulate in the market was it someone sitting on 2.99% or below then did a smash & grab to 5% and is using Jersey for (lack of ) disclosure & tax purposes?

Wouldn’t it be illegal for MM hide defacto control of this size as a director of a PLC ?

Obviously the Company will write to the entity to find out who that person is, at which point the Company would have to inform the market if it was MM, plus he risks losing voting rights against same?

Could it be someone under 3% who transferred their shares to the trust then topped up via Jersey ? As it’s a Jersey based Trust they are protected of disclosure until over 5%

As OSG says someone has gone to a lot of trouble of hiding this one from the general market - the company will find out of course in time

Ryan

That’s my personal view, obviously we can hold post event and take the ride, I think we have a 100% to max 180% on the price if … they can do a smart restructure of Nutrition pay off debt

It’s decent risk / reward for us PI’s

Steve, don’t disagree, I just focus on FCF , cash can’t lie stuff

so many adjustments it’s kind of pointless looking at other Metrics

FCF / Debt / capex that’s it for me and we won’t be buying Kong/ Newspapers / hotels etc

They have pretty much told us where we are for 2024 6 weeks ago, we know they repaid £22M debt in October, we have an idea on the FCF etc

We have an idea of capex for 2025

We can estimate interest payments then work out how much FCF we will have with no interest / capital payment and no Nutrition FCF, know it’s a bit opaque in detail but they have put the info out there but within the circular

I only bought back in after considering the above from the demerger circular, so some risk but mitigated somewhat in my opinion

I would just go off the known unknowns if that makes sense?

Some info is in the 28th Nov RNS, other stuff we have to piece together

Kind of like no idea how they got there but we have £77M ish FCF after repaying £22m of Capital in October 2024 and a ballpark of £29M net interest- assume they enjoyed £6M of interest that’s the bit we don’t know

All in though it could be £130M FCF less Nutrition FCF assume that gets restructured/ financial engineering

Ballpark could see Beauty churning somewhere around £100M FCF standalone, that surely has to have a 10X value ?

Nutrition, we only own 50% however that’s structured but that may well be £35M FCF ? Maybe ?

30p to 40p tops for Nutrition ? APN value driving the market value so a bit uncertain

80p Beauty looks conservative assuming they action a capital event is my opinion

The bunce could be a special dividend if there is any spare cash if they restructure Nutrition repay debt but I’ve discounted that to zero

Appreciate below is still grey but we can piece together a 2025 FCF forecast and why sorting debt is attractive

Via the 28/11/2024 RNS

‘PART III INFORMATION ON REMAINCO

RemainCo is a highly cash generative consumer brands group, with category-leading brands. RemainCo is comprised of two businesses: THG Beauty and THG Nutrition. In 2023, RemainCo generated sales of £1.9 billion, adjusted EBITDA of £103.1 million and free cash flow of £80.3 million (after interest costs, and before debt capital payments and acquisitions). Pro-forma for the proposed Demerger, RemainCo FY 2023 capital expenditure would have been reduced by c.£92 million (from c.£126 million for THG to c.£33 million)’

Then they add

‘Capital expenditure is expected to fall to c.£20 million in FY 2024 from £33.4 million in FY 2023’

They also tell us £FCF of £77M after debt repayments / interest costs of £34M but this is partially offset by interest earned

They repaid £22M of debt in October 2024

Assume capex is £20M for 2025

Put the numbers into an alphabet soup and it makes sense for Remain to sort the debt out with a capital event, as such unless online trading for THG who are focused solely in beauty / health sectors, drastically underperform in the festive period in my opinion the market will work out that maybe £80M FCF is decent cash for 2025 but they sort the debt out and it could be £29M ish net saving on interest payments and £22M capital payments pro rata

Takes THG to £130M FCF less …. The FCF they lose from the sale of one of the business units

It’s a no brainer that THG/ MM sort the debt in 2025

It’s not like John Lennon leaving the Beatles

Good riddance

Reckon it was Polish putting his pocket money on his 15p a share put via Robinhood before he got the bus to school

Https://www.bdo.co.uk/en-gb/news/2024/december-sales-boost-fails-to-save-retails-golden-quarter

Be interesting to see did Remain benefit from the 20% increase ?

Good research as usual OSG thanks for sharing