Member Info for Okehurst1

Thanks Aquae

Any idea of the cost per Tonne ?

From recent RNS below

‘Stock: there was 13.9metric tonne of SlimBiome® taken from stock held by two partners (Maxum and Cambridge Commodities) in 2023 compared to 2022 (up 39%) representing a value of £417K. Stock held by Cambridge Commodities, who supply the UK market including Holland & Barrett and THG, currently stands at 8.5metric tonne of SlimBiome and Maxum, who supply OptiPharm, hold 16.0metric tonne. The Company has commenced manufacture of replacement stock for Cambridge Commodities as it anticipates most of this stock will be used for existing orders planned for delivery in the next few months. Maxum stock use is averaging 1 metric tonne per month. The recent agreement with Costco and the appointment of Ravenswood, a subsidiary of Brenntag, should accelerate usage with the aim of stock replenishment later in 2024. The planned expansion by OptiPharm of its products into Asia and the USA is expected to increase demand for SlimBiome’

We can surmise it costs £30,000 per tonne to produce the core product based on above.

So give or take somewhere near £1M of stock is required as a ball park figure to be able to double sales maybe ?

Rest of the cash as they say on marketing?

With no debt and increased stock then £1.4M raise looks reasonable to fund the planned expansion ?

Any views ?

Big Mike likes his model train set as much as he likes Boo?

Wonder if we get an RNS with a Mike link up with Boo one day?

‘Further to the announcement dated 23 February 2024 giving details of Frasers Group plc ("Frasers") as a strategic shareholder, Mike Ashley has entered into a consultancy agreement with Hornby through Mash Holdings Ltd (a company wholly owned by Mike Ashley). Mike will be available to support Olly Raeburn, CEO of Hornby, and the wider business, particularly in relation to systems, operations, logistics and, where relevant, broader matters of strategy.

This approach is aligned to Fraser Group's policy of partnering with strategic investments in order to add value for the respective shareholders of Hornby and Fraser Group. No remuneration is payable to Mash by Frasers or Hornby for these consultancy services’

Hi Yorek

Still holding, never know with THG, don’t want to be out just in case we get an event but won’t be adding

Hi Golden

Good to see you on the BB again

Opportunity knocks here if you are not already holding but it won’t be a quick buck from when we had the last 2 pops in

2022/2023

Sometime 2025 is my call / guess at best for a buyout

Just what price this drops to in meantime? There is no support or Institutional Investors going to buy in with Matts open hostility to the City and doubtful a 3rd party bid with the £260M of debt at current cost of capital

Throw in no dividend and Matt telling everyone on Friday he’s up for a fight and he holds in excess of 25% with the employees, can’t see any reason to add/ buy just yet but a decent hold if your still in the stock ?

Hi Pearl

What’s you view on the FCF figure , capex and debt ?

We all know that Matt doesn’t like the City and there is no love lost either way.

It’s just a question of when not if Matt bids alongside his concert party partners to buy out the balance of shareholders, as such there is no incentive to promote the share price.

Interest rates are too high for a deal today as THG couldn’t afford servicing the associated debt but maybe sometime 2025 ?Who knows ?

In the meantime he pushes on with running his business and investing the FCF each year

Suggest us Private Investors have to just accept the situation, we can sell and move on or hold and wait for the day, but with £260M of debt, £55M of leases and Matt / employees controlling in excess of 25% of the equity there is no white knight coming to our rescue and Matts post today is a clear message he will fight hard to retain his control

Hi OhhCant/OSG

One thing we can agree on is Matt doesn’t want to be on the market ?Think his views are well broadcast on that point .

MM could form a concert party with the employee trust and long time institutional supporters to attempt to reach a sizeable combined holding

Alongside PE Bid in for the balance they don’t own then attempt to get to 75.1% ,then deal with the balance via the threat of scheme of arrangement? It’s possible

Nb Not sure Kelso have the clout to direct matters

No idea what that price would be but with £260M of debt and capital markets demanding a a high price for risk capital it would need interest rates to drop considerably to make it viable

In the meantime no rush for Matt, he’s in control and can make the move on his timetable, suggest the market worked this out at 90p and it’s telling the Shorts are not at 5% like the past, they know the above is a possible event it’s just when?

Ste, you and I had differing opposing views in December 2022 - we kept it civil -when we sat at 38p, the rest is history on the price action

15 months on and based on current known info I agree with your overall gist today

Not sure how PI’s make money short to medium term on THG as it stands, MM has strengthened his control via issuing shares to the employees, he wont allow a premium listing and he can’t sell a division without the banks wanting the £260M repaid and THG has £55M of annual rent to pay put aside £125M of so called capex to fund

Worth noting THG group debt was almost 50% less 15 months ago, it’s helped MM that THG has increased its debt pile as it deters any 3rd party restructuring plans

So with in excess of 25% of the equity under MM’s control he can run THG as he feels fit, it would require a concert party of considerable size to oust him off the BoD and who would organise/ action that ?

Matts game plan could well be let the shares settle to a price that when the private equity markets fully open that long suffering shareholders are more receptive to low ball bid from him ? It’s just how it takes to get to that point and what price ?

THG doesn’t make a pre tax profit as such but generates £120M FCF before capex which is predominantly on software for the platform.

We had the same conversation 12 months ago, could THG strip back capex? Even by £60M a year as a figure ?

Pay down towards the £260M debt pile ?

Our FCF had been heading to £140M last year

Any views?

Thanks Ste

Looks to me like the rent is major factor, assume its market rent the issue must be the servicing of the debt on the other side for Matt?

From his point of view pulling in that £48M is paramount.?

Hi Ste

What’s current rent ? How much to Matt ?

Is that £48M direct to his property arm ?

Thanks Magnum / 404

So Matt collects £49M in rent a year but he has debt against the commercial properties so he has liabilities ?

Any other views on this amount ?

Just trying to figure out what Matts agenda is ?

Point being … does Matt ideally need to sell the real estate and reduce his liabilities to remove the risk of private equity / others restructuring the leases if THG was taken private ? If that was possible ?

We know there is SOTP here but is that the catalyst, Matt sells the real estate repays his loans ?

Until then we limp on ?

Genuine question

Does anyone know how much p/a rent THG pay in total and how much of the total is paid to companies controlled by Matt

Any ideas what the breakdown is?

Well balanced post Sieveco

Point 4.

Has anyone got an idea on the cost of phase 3 ?

Suggest that a key point for us PI’s as Avacta may need a raise again in 24 months time ?

Any views anyone ?

Assume we need to raise Q1 2026 in advance of the Audit sign off, we know now that we can’t leave it till the day the cash has run out being June 2016?

What do we think the cash that will be required to fund

Phase 3 ?

Trying to gauges estimate what this will be ?

Nb minor point may have to chip the EV of Rev B noticed it’s down to £90M mcap

Few thoughts, with all the bull of many quoted Plc’s reporting adjusted EBITDA it becomes a minefield for us little Pi’s

Suggest we also have to look at EV valuation to FCF ratio as well

So in BOO’s case £500M EV and FCF at last results was a cash outflow of £12M in 6 month period and this period didn’t include ramping up USA stock / new centre opening

Forecast EBITDA average £63M less capex £75M which we are told hasn’t changed ? But we also have to add cost of finance so overall negative FCF could be £40M to £45M ?

Some analysts think £60M, but if we go with £45M negative FCF vs £500M EV

Rev B has an EV value around £125M and £12M EBITDA less capex £5M less finance £2M , FCF of £5M vs £125M EV

Appreciate the above is a grey area to measure 100% but its something to think about when we know it’s difficult/ costly to raise finance, ideally we want to see positive FCF in Boo or at least breakeven

Frasers don’t need to Bid once they hit 29.99%

Not saying it’s a day 1 event but they can obtain a ‘whitewash’ if they underwrite a fund raise and assuming they have some control of the BoD - that’s not a given mind

Frasers could of course buy the debt facility off the existing banks as another option and put pressure that way, with one eye on credit insurance as well.

Few moving parts and of course speculating but an ASOS/BOO merger, eradicating joint debt or a good chunk of same with Frasers Corner Stoning new funds has merits?

Assume there must be decent cost saving with a merger ?