Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Thanks sp28. This is an interesting piece. Hopefully the H1 results will reflect these efficiency improvements and ROI.
Miajer, I agree and was going to post something similar.
In terms of mindset, we are looking at a completely different company compared with eighteen months ago. I think the market sees this too, hence the change in fortunes with the share price.
Owning this share over the past eighteen months has changed my thinking.
Call me naive but I used to think markets are fairly rational, not any more!
If forcing the share price down to 33p was irrational from a valuation standpoint, and I think it was, then it begs the question, what does irrational look like on the upside?
Maybe the £5 valuation at IPO and the £8 it subsequently increased to were also both irrational valuations but wouldn’t it be great if we saw these again!
Now that’s something to ponder!
It seems to be the lowest price for over six years!
If that’s right margins should be excellent in H2.
I often read this board with interest but rarely comment. About 18 months ago I started buying THG and now have 127k at an average of £1.015.
As we all know, since then the price has been as low as 34 pence meaning at one point I was in the red to the tune of £85k. It’s been a horrendous nightmare and for many others also on here I’m sure.
It’s my birthday at the weekend 🎉🍾
It would be unbelievable timing if I could celebrate with a profit. (I didn’t sell a couple of months or so ago when it hit £1.17)
Good luck everyone. Hopefully we will all prosper 😊
I think a deal between MM and Apollo will be done. Just my hunch, that’s all.
It’s been many painful months but I’ve finally turned a profit.
And I sincerely hope everyone here is able to say the same at some point, if not already.
Now when do I bale out, that’s the question?
I’m no expert but I’m trying to understand the protection available to PIs in the event of a low value offer.
Presumably the takeover code requires all shareholders to be treated equally and fairly and therefore it follows we must all be offered the same deal.
Therefore, if the offer is low, say £1.00 to £1.25 because the major holders have agreed to participate in the new company, then surely all small PIs must be offered the same opportunity.
I personally would not be too keen to hold shares in an unlisted company but it might be better than accepting a low offer.
Are these thoughts correct or am I way off the mark?
1.8% of THG stock now held by short positions, being the sum of all those declared positions greater than 0.5%.
I think this represents quite a reduction.
And 127,000 here in sunny Algarve.
What gives me particular encouragement is the recent involvement of activist investors, Kelso and Sparta.
Their advice to the BoD may seem obvious to many here but unlike the majority of PIs they can communicate their ideas to the wider market and therefore make it less likely that a low valuation can be accepted. Well, that’s my hope anyway.
Coupled with the FTs valuation THG may well sell for a fair price. Not that I know anything more than anyone else here.
3% of £14bn is £420m
I cannot believe this BoD would commit hundreds of £millions to Ingenuity without a firm understanding of how commercial returns would be achieved. Why would anyone do this?
I have no knowledge of their plans but given the huge investment I do expect good commercial returns to be communicated at some point, hopefully sooner rather than later.
A fourth piece of good news seems to be the continuing fall in wholesale whey prices.
There appear to be many different prices and I’m not sure which is most relevant but the trend across them is certainly down.
This is cruising now! What a change in sentiment!
Well done. Congratulations to you. At one stage I was almost 70% down. Now I’m ‘only’ 30% down. And I have a bag full of these. Way too many!
But I’m much more hopeful now of breaking even!
I’m still under water but I’m beginning to smell fresh air! Lord, what a journey this continues to be!
I’ve been a holder here since the failed takeover episode. This is the first time since then that I feel I have a genuine chance of recouping my investment, maybe even making a profit.
In particular, I like the strengthening of the balance sheet which might, just might, help to initiate a different method of valuation. If Q4 sales hold up and margins begin to improve we may well be re-rated.
There are some things I still don’t like, for example, the peripheral investments e.g., the hotels, which convey a lack of focus.
But my losses are now less than 45%, at one stage they were 70%. What a nightmare it’s been! But there is now some light at the end of this awful tunnel!
GLA
Firstly, apologies for using this chat to ask a very specific question but I thought some of you here might have some views.
I’m trying to understand how important the whey price is to THG’s profitability. Reading the accounts it’s difficult to know as there’s no segmental reporting to help with the numbers.
So I’ll start by making some assumptions.
1. THG Nutrition has 2022 annual sales of about £700m (based on H1 sales of £330m and a 10% uplift in H2)
2. Group gross margin of 42% is the same for THG Nutrition. Could be more or less but who knows?
3. Cost of sales for THG Nutrition of £406m (1-0.42=0.58 or 58% CoS)
So my question is; by how much will this £406m be reduced if whey prices have fallen from 1400 to 900 (a 35% reduction) as stated?
If whey constitutes 10% of CoS, then a 35% saving on £40.6m will save THG £14.2m annually.
If it’s 20%, then the saving is double, and so on.
Does anyone have any idea about this?
What proportion of THG Nutrition’s CoS is made up of whey as a raw material?
The ability to generate cash is crucial. When I looked at the accounts here I thought THG was quite strong in this respect given its current phase of development.
They are EBITDA positive, from memory it’s £161m for the previous full year at 7.4% of revenue.
Admittedly this percentage has reduced and they need to restore it to circa 9% but what this means is that provided cash management stays unchanged THG can largely control its cash burn by controlling cap ex.
So provided EBITDA doesn’t deteriorate further, and maybe this is where the market has concerns due to the macro environment, THG should be ok for cash. Cap ex should also be easy to delay if needed. Just my thoughts.