Member Info for Okehurst1

‘Thg Plc Ord Gbp0.005 is listed on the London Stock Exchange trading with ticker code THG.L. It has a market capitalisation of £556.59m, with approximately 1.32b shares in issue’

So £557M £m/cap

£77M FCF X 8

Monday starts the process for Full Listing, trackers will need 7% of the free float

Happy to be corrected on this but my view is the demerger document gave us a glimpse into how Remain co has performed since the last trading statement and where it would stand once demerger complete ?

£77M FCF , interest included at £35M but interest collected

pretty much covers

Capex of just £20M

Suggest the market has priced in underperformance on Nutrition to an extent

As Steve points out, if MM was off the BoD, Remain would rerate up, he’s got no credibility, either way him down to 10% is helpful

Cheshire .. think your right

He had to ‘ swop’ to get enough of a holding in Ingenuity to force through his usual golden share card trick

Nothing stopping him coming back into the market for Remain as he is kind of exposed at the moment and we know he’s a control freak.

Focus on the voting rights, that’s what matters, as the RNS explained

The 200M shares are now effectively sitting in Treasury , they have no voting rights or £value to any shareholder, of course the BoD could sell those shares down the road without shareholder approval until fully cancelled but they have no economic value as such

Number of shares THG back to where we were Pre demerger announcement, we have shed £295M lease liabilities , a loss making business ,capex down to £20M and generating FCF £77M on £1.9B Rev and the share price is down 20%

The market will work it out eventually.

Hi Crowman

Some fair points off you, don’t think there is an MM supporter left on this BB

I think we have to look at Remain as a risk/ reward punt, it’s churning FCF cash, they sort the debt with a bit of MM financial engineering that suits him and the accumulated tax losses suddenly become a tangible asset

Yeah it’s a flutter but this is the 3rd time in 2 years we have posted about THG whilst 45p and the previous 2 have see almost 200% jumps, with Ingenuity capex out the way I reckon we will see something along the same lines in 2025, not without risk of course but a good time to accumulate

As Steve points out, £35M of annual interest payments plus capital repayments, guess the Banks will want the debt reduced before dividends can be paid out of FCF?

It makes so much sense to sort the debt out next, it’s expensive in its current guise.

Yeah that’s the one Steve.

Think we all we have to try and look at stuff through MM’s mindset, this all works for him.

hi ryan

if iain mc can raise the cash at the numbers he quotes then £500m goes to remain, it pays off debt and they could make a special dividend with a chunk of the balance, back of the *** paper it looks around 40p a share unlocked assuming the £1b m/cap holds plus the special dividend

remain then becomes beauty, has no debt, £1.3b revenue and can utilise the extensive tax losses, what’s that worth ?

80p a share min?

it’s what the market wanted including getting rid of ingenuity, most of all it works for mm, it’s just can iain mc raise the £500m? he appears confident he can ? but is it for nutrition?

Iain Mc said Selkirk wasn’t a shell company but in practical terms it is but he needs to raise the ££ if him and his backers want to enjoy a ‘carry ‘ on any upside and it smoothes the journey for all involved / Remain shareholders

Cant see there being any other way, they can’t just spin out Remain as the holders of the debt may not allow. MM needs to deal with the debt to have control with Iain Mc sitting as Chairman of Selkirk and a hand picked BoD

He’s then in the driving seat of Ingenuity with his super preference share and his £400M of annual revenue from Remain , Iain Mc as Chair of Nutrition, debt sorted and he sits on Beauty generating £1.3B churning the cash,£10M capex, serious tax losses to soak up, he’s liquidated his property portfolio reduced his own personal debt

Moving Nutrition into Selkirk if Iain Mc can raise the cash is the final piece of the jigsaw for MM, many won’t like to see him make money out of all this but it’s a smart bit of business by the boy .

‘But don't look back in anger I heard you say ‘

Look forward now, capex £20M,big lease liabilities gone,cash generative Remain, MM will want to sort the debt out next, maybe before the FTSE 250 inclusion in 12 weeks time, we will find out is Selkirk a stalking horse or another non Bid off Iain Mc?

Will Remain Co become THG Beauty as Nutrition is next to split away?Thats my call, bit of risk but decent chance we bag from the 45p today sometime in 2025.

‘Rock it’s not too hard to understand. Remainco was profitable at ebitda level and profitable at FCF level after paying finance costs

It is not profitable at operating level due to D&A which are very very high. They could address this through financial engineering’

Steve, spot on.

At 45p it’s a good price to accumulate, some sort of financial engineering has to happen to sort out the debt, Iain Mc has been MM’s finance man the last 11 years, good chance we get a capital event before FTSE 250 inclusion end of Q1, in line with Iain’s forecast he anticipates he announces a deal within the same time period

Either way as OSG says Remain Co is a sitting duck, it needs to sort the debt situation, the above squares everything and unlocks potential value, the risk / reward looks good at 45p/50p

We know Iain Mc is a long time friend of MM and made a Bid for £1.70 just 30 months whilst a director of THG, but was it like the Candyman Bid, smoke and mirrors to test the market for other offers?

This time around he has a new quoted PE style vehicle and he is openly discussing a Bid at £1B value for a 49% stake of a business generating cash.

To raise the £cash from Banks/ Funds he would have to have a compelling story and know / understand the business, he knows MP, he’s been on the full journey as MM’s Rainmaker

He offers £500M cash plus £500M Selkirk paper he has his options / Selkirk shares, him and his BoD have a ‘carry’ on the £500M from the Banks , Remain Co pay off their debt, we know Capex is diddly squat going forward, maybe £10M for Beauty

Remain pay a cash dividend / plus the Selkirk shares to Remain holders and they are left with Beauty standalone doing £1.3B, no debt, churning cash

APN is valued at £400M and generating £90M of revenue, the £1B for MP as structured above looks possible ?The Banks funding the £500M of cash are in control with a first charge on the 49% paper in a debt free business and they roll the interest up to be deducted from Selkirk founders ‘Carry’

MM bags another £125M cash and £125M of equity

Plus the 25% of Beauty now debt free churning cash, is that another £250M paper for him? And he’s nicked Ingenuity for £25M

Makes sense for MM?

‘· once the B Share Redesignation has completed, the number of Ordinary Shares in the capital of the Company will be reduced by 204,081,632 Ordinary Shares to 1,322,058,529 Ordinary Shares ‘

Re the number of shares, the above is all that matters

Good riddance

Remain Co moves on

Post share buyback the average £EV value of each business unit is around £425M generating combined revenue of almost £2B and £77M FCF

Put aside inclusion to FTSE 250, Remain Co is looking very cheap at this level

OSG/ 1 pencil, good chat, agree on main points

Know the market is logical.

Did the market just take the cash off the £m/cap that THG handed Ingenuity @ 1.3B ish shares, if that makes sense ?Give or take ?

Remain Co does it’s stuff with cancelling the shares after the 2nd January the market then looks ahead to FTSE 250 and tracker funds buying in

45p for the risk /reward here is a decent punt for PI’s in my view

200M ish shares to be cancelled in Remain Co

Throw in the 7% of total shares towards end of Q1 required for FTSE tracker funds

£77M FCF so no cash issues and potential for further capital events, be that bids for part or whole

This has been a good week for bottom fishers, decent chance we have a bagger from here, can’t quite believe this 3rd opportunity has arose,THG is the gift that keeps giving