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THG PLC (the "Company") announces that it was notified on 27 July 2022 of the purchase by Matthew Moulding, the chief executive officer of the Company, of 1,169,000 ordinary voting shares of £0.005 each ("Ordinary Shares") at a price of 70.2287 pence per ordinary share.
Matthew Moulding immediately gifted 1,169,000 Ordinary Shares to various friends, none of whom are classified as persons closely associated with Matthew Moulding, for nil consideration.
Do these researchers just pluck net debt levels from thin air. Just looked at estimated net debt/cash as of y/e 2022 from latest broker reports
Barc - (478)
Citi - (122)
Numis (148)
What are Barclays smokin?
https://mobile.twitter.com/TheCitySpy/status/1546945953114079232
Ste2000 - does not mention Softbank in the note. The note is weighted heavily on THG Beauty. Basically saying THG Beauty is the leader in the field (by far) and has the strongest competitive position in the market. Beauty brands will push for more D2C leading to more 3rd party distribution going forward - this will lead to higher margins. Other competitors like Feelunique (owned by LVMH) focuses on assortment and Violet Grey (recently bought by Farfetch) focuses on exclusivity whereas Lookfantastic combines both strengths. THG Beauty set to win across both 1P and 3P - It already has the strongest products’ portfolio among competitors and it is well set, thanks to its logistic capabilities (Ingenuity) to expand into the 3P marketplace model
This is the opening page/exec summary:
A Beast in Beauty
CITI'S TAKE
Amid M&A newsflow, commodities/FX driven downgrades, corporate
governance debates and questions over THG Ingenuity, we feel the market
is underestimating the value of THG Beauty division, which is a very strong
player in a very attractive market and, alone, could make up for the total
valuation of the company. Following a period of restriction we are resuming
coverage with a Buy Rating, targeting 220p (c. 200% upside).
A Beast in Beauty — We assess the strategic dynamics of the Beauty online retail
market and we find a very competitive environment where THG Beauty stands out,
with the best assortment in the market at the best price. Beauty brands’ push for more
Direct-to-consumer could imply more 3P (Third-Party) distribution going forward.
Even under this scenario, which should improve margins and lower the capital
intensity of the business, we’d expect THG Beauty to remain a leader, thanks to its
strong relationship with beauty brands and logistics capabilities.
Negative newsflow in the rear view mirror? — THG shares are down > 80% over
the last 12months amid a tech/growth market sell-off and further penalized by
commodities (whey) and currencies (GBP/JPY) driven downgrades. With whey prices
and JPY starting to move in the right direction, we expect gross margin recovery to
drive back margins normalization to 9% by FY25e. In addition, the recent appointment
of a new non-executive Chairman should ease concerns on corporate governance.
Mark-to-market drives 220p TP- c.200% upside — We think the recent M&A
interest in THG highlights the clear value in the shares. Applying peer group multiples
and conservatively overlaying a 30% discount, we derive a SOTP-based target price
of 220p (c. 200% upside, vs 250p before), representing 1.2x FY23E EV/Sales. In our
bull case, analyzing the potential impact of THG’s divisional separation exercise and
considering our view of normalized/FY25E divisional FCF, our DCF-based SOTP
derives 600p/share. Our SOTP implies 2.0x FY23E EV/Sales for Beauty, 2.1x for
Nutrition and 3.1x for Ingenuity, [with the internal separation exercise improving the
capital efficiency of both Beauty and Nutrition]
Isn't it amazing how there is not a single article to mention this director buy in the press (!). However if MM farted and a roof tile fell of the THG HQ you can bet the FT will publish it and a picture of him with his shirt off
Significant drop in the past week..
https://www.clal.it/en/index.php?section=siero_olanda
2 interesting quotes:
'Manchester-based THG did not engage with either party or grant any due diligence access over concerns about the levels of debt in both proposals, according to people with knowledge of the matter.'
'Candy made two fully funded approaches to THG that were also rejected.'
https://www.bloomberg.com/news/articles/2022-06-15/belerion-king-street-said-to-drop-2-1-billion-pursuit-of-thg
Meanwhile whey prices continue to fall…
https://www.clal.it/en/index.php?section=siero_olanda
So it was the Betaville article that causes the spike and forced Candy to make a statement
https://betaville.co.uk/betaville-intelligence/uncooked-alert-thg-group-said-to-part-14/
The Board of THG notes the recent press speculation and confirms that it received a third unsolicited, highly preliminary and indicative non-binding proposal of 170 pence per share from Belerion Capital Group Limited ("Belerion"), together with King Street Capital Management, L.P. ("King Street") (collectively, the "Belerion Consortium") to acquire the entire issued and to be issued share capital of THG (the "Proposal").
The Board of THG considered the Proposal, together with its financial and legal advisers, and concluded that it significantly undervalued the Company and its future prospects, and accordingly unanimously rejected the Proposal.
Following the recent press speculation regarding THG plc ("THG" or the "Company"), Candy Ventures Sarl ("Candy Ventures") confirms that it is in the very early stages of considering a possible offer for the entire issued and to be issued share capital of the Company.
Looks like whey prices have started to flatten/fall as MM alluded too in the results Q&A last week.
https://www.clal.it/en/index.php?section=siero_olanda
Sweet Dutch whey (most appropriate to benchmark for THG according to Jefferies broker note)