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Errm spoke in detail with my relative who has been loyal my protein customer for years.
Two factors at play for him.
1) quality of product and brand confidence. He thinks many competitor products are poor, which is why he has stayed loyal to thg
2) he is acutely aware of cost escalation. He is at the point where he can’t really absorb more cost escalation. He is loyal but probably is at a tipping point.
Listening to him I don’t think he can stop buying the product, so he may trade Down to what he perceives as lower quality product.
3) i think THG need to think very carefully. If much of the trade off in my relatives head is qualitative rather than substantive then many customers could be permanently lost if they are forced to switch simply due to price and then find alternatives are not too bad / comparable in quality terms
I still expect no RNS in 6 mins. If one does come more than likely no bid received but will keep market informed. One reason is tiny drop at close friday.
I do like alternate views especially to reduce confirmation bias.
Lets see whats transpires shortly!
Insider k. I am here to try a get a better return than the building society. I am small guy with the odds stacked against me. You can dig all you want, but the only way to get anything out of these boards is to learn to take the rough with the smooth. Part of what empowers me is knowing and regularly reminding myself just how weak the position i have is. I am sure there are many small PI exactly the same as me. I know this is gambling. Sure if you have greater capital, more knowledge, more experience it probably not so much of a gamble.
For me my posts are not to claim any great belief or knowledge or wisdom, usually i am simply try to figure out what the next move should he.
Fwiw it is worth i was looking at a day trade on this when this hit lows, but i had no idea that a bid might come. In the end i was too fearful to put more funds in. Of course post hoc you can say the price was so low a bid speculation was inevitable, but like i say i don’t spend my life pandering or pondering to Or on shares.
In the end i looked at where i was and was starting to think about leaving this for 2/3 years, having got into speculatively in the first place. Now even that looks old hat and i will be forced to watch closely over the next week to see where the speculation might go
If that makes me a muppet in your view or any one elses, i can live with that
Soleman1 Nope I stayed in. I did not extend my risk though. Thats why i would be still over the moon at a bid.
Some would say I was foolish as i broke my own limit. I said i would sell at £1.40 which was 25% loss, but stayed in.
must admit its hard not to be excited at the possibility of a bid, but as you can tell i try not to get over excited on speculation.
My plan was to wait for a storming Q4 trading update 18/1 and watch it rerate, but we know where that plan ended up
Each to their own. I set my stop loss at £1.40.
I thought long and hard for two reasons
1) my stop loss had been breached at £1.40 from buy in at £1.87
2) whether to double down at £1.20
Decision was to not sell out, but equally not double down. It would have me too far to climb.
I can see logic of averaging down but wasn’t worth it for me. Will be very happy to get back above my stop loss level of £1.40 and apply same decision process.
Insider could you articulate why
Whey prices are bound to drop as mm and co believe.
If they stay high there are questions over nutritions ability to pass on costs increase and improve margins.
Surely the way to go is to keep costs down. Look at how unilever have responded to their abandoned gsk bid.
Nothing from thg at the moment. Anything might help
Thanks
Billy bleach ..... “it don’t normally do that”
https://youtu.be/YZYMnmHgIks
My view is this aint going private
what would I do???
1) initiate cost reduction programme circa 20% of current head count. May be not feasible but surely there are savings to be squeezed out
2) invest in further head count for digital data and technology to accelerate ingenuity
3) advise market that MM to into non exec chair role on appointment of new chief executive.
4) initiate review of currency hedging strategy
But I don’t know much about anything really, but thats what i would try if i were a billionaire owner...gotta be Better than shouting at the moon which is my plan B
I still can’t work out what they are really doing, so grateful if i could be set straight
I am a bit unsure regarding EBITDA forecasts in yesterdays update
Market expectation was 7.9% EBITDA. THG says revised range is 7.4-7.7%. Fine
Two key variables i picked up were
1) record input prices in Nutrition
2) adverse currency hedging ie 90bps
The 90bps speaks to a governance concern around their hedging strategy.
Can anyone advise whether THG outsource their currency hedging. Presumably this is a responsibility of board risk committee? It would have been nice to understand better what they propose to do about it.
Secondly how much of the difference between the revised lower & market expectation ie 7.4 - 7.9% was due to the 90bps vs increased input costs? Ie 0.5% lower forecast breaks down as
20% due to higher costs
80% due to adverse currency movements
Or other way round
Happy to be told its a daft question if it is
Largest contraction is household uk discretionary spend budgets in a decade -ve news todays
Sainsburies report falling sales, but issue profit upgrade +ve news
My guess is thg trading will be slightly below average expectations. There were one off costs I saw in previous updates but head count has been growing. Would love some sense of the direction regards profitability or whether cost growth will weigh on profitability? What is expected on this front??
Btw should read 6 months ahead not what happened in December. They are talking about significant headwinds into 2022..
The positive i see is Ingenuity. Perhaps with retailers under such pressure, the case for ingenuity is getting stronger by the day and we see a flood of clients in H1 2022...this is what i am looking for pointers from the update
This is nuts. Look at the report. Only area of online that showed growth was footwear.
Barclaycard spending growth of 13.7% in December almost entirely driven by food and essential spending ie higher petrol costs.
I think it clear why the drop away from recent highs occurred and its not shorters.
Why...there is nothing to suggest targets will be massively exceeded. You can see the uppper and lower range of the forecasts.
The risk here is either on target but low end of expectations, or worse below.
Shorters would have a field day.
I got my hard cash in this just as much as the next guy, but the same line was being taken ahead of last update ie this is sure to be above £4 after update.. held my nerve and got in at £1.87. I really do want this above £4 and soon..but I am realistic too