Member Info for sj74

Yeah, depending on the figures.. my target is somewhere north of £1.. within 12 months :)

To be conservative (I think) say we have FCF of £52 million. That would give us an EPS of 4p. Gives us a current PE of 10.

To reallign with a peer such as APN the SP would have to be 80-92p.

On the other end, if they hit their mid term targets of 12% EBITDA for nutrition at £600 million revenue-£72 million

6% EBITDA beauty at £1.2 billion- also £72 million.

£144 million EBITDA. now say CAPEX jumped to 44 million leaving £100 million FCF. EPS 7.7p.

That would leave a SP of £1.50-£1.80.. PE of 20-23.

This is assuming stagnant growth.

Even the worst forecasts make 40p look poor right now. Obviously they need to actually show us delivering that EPS before an actual value can be attributed. Anyway, that's why I'm in.

If we can show £70-80 million FCF for an example this year then to be alongside a peer such as APN then the SP would have to rerate by my calcs (as shown before) by 3-4x to a SP of £1.20-1.60..

However the company needs to show that this is now profitable with future updates and figures showing the EPS for this to start it's rerate. No reason why this can't start rerating this year provided we are now in fact 'highly profitable and cash generative'.

Personally I would say Applied nutrition is fairly valued. They have an EPS of roughly 7p based on their £17 million free cashflow.. that gives the stock a PE ratio of roughly 23 which falls inline with a growth company.

THG has based on a £77 million FCF EPS of 6p. On the current share count that would give us a PE ratio at present of 6.6 which is ridiculous if we start producing the FCF numbers. On the above, comparing to APN I would say THG is 3-4x undervalued. Just my opinion, and clearly underlying figures will be the thing that drives the rerate.

Even if nutrition is 6% at 600 million rev and beauty at 6% at 1.2 billion revenue that is still over £100million EBITDA..

Nutrition adjusted EBITDA margin recovery back to medium-term guidance (c.12%) in FY 2025 (FY 2023: 13.5%) will be supported by, normalising ASPs, significant growth in offline retail and licensing sales, and a greater proportion of Japan orders being locally fulfilled and manufactured.

Lol, always the case..

Just looks too cheap to me, for the free cashflow that (hopefully) will be delivered this year.. CAPEX £30 odd million. EBITDA £100+ million. Two companies valued really quite low compared to peers.. obviously the SP could go further down but the reward from here to me is so much greater.

At HY results they guided net debt to be broadly the same as last year at the end of FY24.

On a separate note FY25 should see plenty of free cash flow, and a further small top up from me this morning. :)

They said it will be post H1.

I agree though, I think a return to more frequent trading updates would be welcome especially as we have embedded the new commercial model and to see how the company has performed. I understood them not doing it whilst they were effectively restructuring the business.

Great when it comes together 👍

Good to see..

Back in KBYK?

AGM next week, so presume no update if that comes and goes.. then roll on March lol

Yeah they said to me back in November that it would be post H1, so March time. That's not to say they may not throw an ad-hoc one out of the past month or 2 has been good or vice versa.

If the turnaround doesn't work then so be it, I've not lost everything I have lol.. it won't cause any sleepless nights.

We don't know anything about the markets, we can predict but quite often a curve ball is thrown. You know this.. it wouldn't shock me if we return to growth this year.

Anyway, off out. Good chatting :)

Could be 1 year, 2 years, 5 years.. remember 2021 everyone here thought this was going to go higher and higher.. turned out that was the peak.. it started dropping before the underlying figures started getting worse.

The point is no one knows the exact point this will turn but the company is doing everything it can to position itself.

Have a look at my earlier calculations, that's what I think is achievable. In a great market with a lot of tailwind they could do so much more.. it is a risk, but people buying now know this.. they will either reap or not. The non risk takers will wait until the turn around is fully on with underlying figures improving and the SP being a lot higher.

Will the turnaround happen or not. Who knows.

Mean while posted 21 hours ago:-

'ASOS is driving highest engagement through creator channels'

They are starting to resonate with consumers, which is their strategy for FY25.

https://corq.studio/insights/ootd-analysis-asos-is-driving-highest-engagement-through-creator-channels-and-bright-socks-are-the-accessory-of-q1/

I'm not buying for what the company did in FY24, or the break even for FY25. I'm buying for the turnaround and what the company can do.. it either turns around or it doesn't. Simple.

I said mid term targets, Unless you think this year is mid term that is. That's why it's called a turnaround. That is also why the SP is where it is..

That would give us an EPS of roughly 50p..

At £10 that would be a PE ratio of 20..

However to be more alongside our peers a SP of £20 would give us a PE of 40.. similar to zalando. Not put of the question if the company hits it's mid term targets.

Breakeven company right now.. which is why the SP is where it is. This is where the turnaround comes in:-

ASOS mid term targets are 8% EBITDA margin and capex 3-4% of sales.

3 billion revenue @ 8% EBITDA margin = 240 million

Capex let's say 4% of sales so 120 million.

Interest 35 million.. taxes 25 million

That gives us cashflow £60 million..

7% margin cashflow £30 million..

This is at their higher CAPEX end.