Member Info for shandypants2

I have emailed both THG IR and also Ingenuity equivalent to ask about the hotel/THG experience sales last week and chased up yesterday as i have not yet received a response. I will keep chasing and will post any reply here.

Re THG Beauty - UK beauty purchases rose 9.8% in July, so hopefully this would have had some positive impact for THG.

Music and beauty fans helped give a lift to UK retail sales in July. Barclaycard data shows consumer card spending grew 1.4% year-on-year in July, up from -0.1% in June. Habits have formed in an era of higher and stickier inflation of ring-fencing spending around experiences and also splashing out on little treats. The numbers show there were uplifts to purchases around the Oasis tour, with bucket hats and 90's gear likely to have proved popular in shops. Spending on luxury skincare and makeup helped lift sales in pharmacy, health and beauty by 9.8%. This is evidence of the ‘lipstick effect’, with shoppers pampering themselves with small purchases amid economic uncertainty.

Not sure that's true. I'm not a fan of MM but clearly as the largest shareholder he has suffered more than anyone as the SP has continually declined.

He had over 200m shares in 2024 and with the convertible loan will almost double that - the price of those extra shares is fixed so not sure it is in anyone's interest to hold the SP back.

Maybe H1 performance was just not every good and the numbers don't lie

Yes the Claremont sell shows there is value within THG not reflected in the share price.

However, the EBITDA H1 numbers are disappointing (how about reporting operating profit figures).

It appears THG Beauty must be operating on tiny margins which is bizarre in a high margin marketplace.

In 2024 on £1.1bn rev EBITDA for Beauty was reported at £79m. It now appears the whole business will report similar EBITDA for the whole of 2025.

There are about 10 separate brands under the THG Beauty umbrella and they must know the EBITDA performance for each. Surely it would make sense to consider selling a number of non core brands, especially if there performance is great and a decent price can be realised.

This appears to include:

Christophe Robin

Glossybox

Grow Gorgeous

Biossance

Ameliorate

Perricone MD

I would keep Dermstore, Look Fantastic, Cult Beauty and ESPA as they seem to be the core ones.

Have to agree with comments and how poor the CEO is. How Pitcher is still in a job and earning over £500k plus still benefiting from some longer term bonuses is beyond me - the governance is a joke.

The bloke used all the covid era placing money to invest in the revolution bars, which were the worst performers in the portfolio, rather than use it as an opportunity to close the under performing bars, of which there were many.

Then , just when the balance sheet was looking reasonably healthy he then bought Peach pubs for cash using the overdraft facility. This should have been a mainly share deal and if they said no he should have walked away.

His lack of optimism for his own company speaks volumes.

Peach is a great brand and is doing quite well. It was bought for £16m so surely is worth at least this now, if not more. Revolution should be discontinued or at least streamlined - the days of students buying £1 shots are becoming less frequent. De Cuba is ok so i would focus efforts there.

I thought ESPA was c£100m - see below. I think Perricone MD cost £52m. As the whole company is worth less than £500m i guessing the Beauty division is c2/3 of this based on revenues. So these 2 brands alone are c50% of the overall Beauty valuation.

https://cosmeticsbusiness.com/the-hut-group-acquires-espa-for-100m--133434#:~:text=The%20Hut%20Group%20has%20agreed,growing%20portfolio%20of%20beauty%20brands.

Also, another of MM's random purchases is City AM , the online paper bought in 2023. Probably not worth much but is clearly non core

https://www.bbc.co.uk/news/business-66311244

Share reduction from previous RNS is exactly 4.5m shares. Hopefully he will stop now, but who knows.

I did a small top up yesterday and will buy more if this gets to 3.5p. Even back to 5p from there is an increase of over 40%.

Looking at companies house, although it is confusing you can see that THG experience ownership was transferred from THG on 2/1/25 to a company called Hut.Com Ltd on the same day. Interestingly one Matt Moulding is a director for Hut.Com.

In 2023 THG experience made a loss of £1m and in 2022 a loss of £26m.

So it appears all the losses were paid/absorbed by THG and then the assets were transferred out of the company to a MM owned company at an unknown price . MM appears to be the massive beneficiary in this transaction

THG Experience, as per the King St townhouse website, appears to consist of the 2 Manchester hotels and the Hale Country Club and Spa. I suspect these 3 premises will be worth a minimum of £100m

Https://www.manchestereveningnews.co.uk/business/business-news/hut-group-acquires-manchester-hotels-16212360

the 2 hotels in Manchester were bought in 2019 for £50m and over £10m has been spent on refurbishment since. Both are in great locations in manchester so their value would have risen just based on location alone.

Both were bought to host events etc so assume they are part of the Beauty strategy and will still be part of THG. An obvious sell opportunity if so.

To further reduce debt ESPA or Perricone MD on the beauty side seem obvious opportunities if a decent profit can be made on either/both

Yes, that's over 1% of shares in issue, so if it is Myers there will need to be a RNS. I suspect it is a sell over a number of days - only reported when the final amount is filled, so the price is often misleading.

Clearly EAAS is now massively undervalued if 2025 numbers come in as guided, however, the issues over the last few years have damaged this share and sentiment.

I did think after H1 numbers we would need to see some positive RNSs else the SP could slip e.g. get those 2 big contracts that the CEO alluded to over the line. August is often a quiet month so hopefully these will hit in Sept.

In terms of a seller in the background (Myers) there is not much the company can do really. We just have to sit it out. The CEO has over 20m shares so he clearly will benefit from a higher SP.

The last holding RNS was a few months ago when Myers reduced his holding to 8.98% (so sold c2%). He does not have to inform of any further reduction until he goes below 8% - so that's another 370k shares he can sell with no one knowing.

However, at today's low SP surely it will benefit all parties to sit on their hands until maybe early 2026 when the YE numbers are announced and hopefully we can get back to 6p plus.

Incidentally the CEO mentioned in the Q&As that he thought the current SP should be c8p.

Well they've said they've allocated £1m to buybacks over the next 12 months.

Currently they are averaging about 1 purchase a week at c£1k value, sometimes less. So that's c£50k a year. About 1/20 of the allocated amount.

So they are clearly not buying 'as many shares as possible' they are barely buying any.

Also by definition as the share buyback increases the EPS as there are less shares, so this should lead to the share price increasing. There is no point announcing a share buyback and then bemoaning any SP increase, as surely that's the whole point.

The whole RNS raises a number of questions. As you say the whey price was known for some time and not previously mentioned so why has it suddenly impacted EBITDA (i'd like to say profit, but we have no idea if THG make one).

The Claremont disposal looks good if it is non essential, however, what is the strategy here, will THG dispose of more? To get c25% of the market value for a non essential add on surely (hopefully) indicates how undervalued this is.

The biggie for me is that Beauty represents 2/3s of revenues, yet it got one line at the end of the RNS. Seems odd to me

Https://www.bbc.co.uk/news/articles/cly8ynegwn4o

well this should at least keep the price we receive at a healthy level, and higher than 2024.

This last traded above NAV in 2022. Not expecting a return any time soon, however, a single digit discount seems about right IMHO. So low 130s

Whilst disappointed with the reduction in NAV (again) this does allow us to see the range this share should trade in.

Usually this trades c10% discount to NAV although recently this has been nearer 20%. So that's c130p down to 115p.

Based on this if it dips below 115p i'll be topping up.

Clearly this doesn't help those who bought in the 140s when the NAV was c160p but the divi yield is double the current base rate and this could should increase further if the base rate predicted cuts are realised.

If we can continue to sell some assets at NAV, plus the share buyback, then hopefully this should support a price in the mid to high 120s.

With the NAV being reduced again and the blame on less wind i wondered if things were more complex than that.

Maybe the issue is partly less wind, but also where our farms are located and how efficient they are.

This article is from 2016 but clearly shows how wind speed varies across the country. Clearly Scotland and around the edges are the highest average speeds. Based on this you would wonder why there are any in land southern based farms.

https://www.carbonbrief.org/factcheck-which-parts-of-the-uk-are-windy-enough-for-windfarms/

Not sure i agree. The bid/offer spread is quite wide and the offer is usually right on the lowest value possible. Similarly, when i put in small test sells i often don't even get offered a price (by HL) as the quantity is too high.

As there is a buyer - the company - they could improve liquidity by closing the bid/offer spread and requesting the broker tries to buy larger amounts in the open market.

This would have minimal effect on the SP - although surely the whole point of a share buyback is to increase the price.

TRU also have a share buyback and the broker is clearly being a lot more proactive. There are alternatives.

Just watch yesterday's Investor Meets presentation and the comment that revenues are not heavily reliant on Medicaid is very much incorrect.

Based on the slide they showed current sales are split 44% commercial, 28% Medicaid and 25% consignment. As consignment is essentially given away for free or at cost for a limited time to help adoption, the revenue is generated from commercials and Medicaid. Therefore Medicaid represents c 40% of revenue generating sales.

Therefore as Medicaid funding is being significantly cut i suspect there will be an impact on STX. Unfortunately no one asked this question on the Q&A and the presentation didn't seem to mention it.

Supposedly cash was down as he predicted - well as we acquired 2 companies in H1 for c £14m, who would have thought that cash might be down by a similar amount.

Presentation was ok - nothing we didn't already know, clearly a difficult environment ATM but certainly not all doom and gloom either.

Yes, a good meeting today. They appear more positive and the H2 2025 slide breaking down revenue opportunities was very good.

CFO appears very switched on - i particularly liked his comment that no tender goes out without him reviewing and approving the numbers.

It's taken a while to turn this around, but with a solid balance sheet, no debt and a growing pipeline things are clearly a lot better. Now we just need to SP to respond.