LinkedIn post25 Mar 2024 11:14
“Maybe we're not so crazy after all…..
On Friday, Peel Hunt, a UK Investment Bank, published a 79-page research report on THG. To be clear, Peel Hunt has zero connection to THG whatsoever.
You’d need to have spent the past 3 years at a yoga retreat to have missed a steady flow of news towards THG & me. 13 months after a very successful IPO, we encountered a bitter & negative campaign, led by an apparently disgruntled Exec team at Numis (now renamed Deutsche Numis), who'd been paid advisors on THG's IPO. This set the tone for THG on the LSE ever since.
The narrative has been nothing if not consistent – painting me as some sort of charlatan, building a “bag of spanners” company from Manchester. Our response has been to respectfully disagree (sometimes less respectfully 😬), remaining undeterred in building 3 global giants from the UK.
I’m constantly asked to spill the beans on Numis - those involved, their motives/gains, and the FCA's response. It's important people know the truth of the extent of rogue actions on the LSE, but all in good time...
The Peel Hunt report tackles any media issues head on, starting the report by saying senior staff at the bank initially told the research team “don’t touch THG with a barge pole”.
For those genuinely interested in THG, it's a must read. Peel Hunt have also prepared a 15 min audio summary (attached).
This report is the most comprehensive review of THG I’ve seen since IPO. Peel Hunt used multiple analysts to compile the review, from Tech to Consumer Brands - recognising THG has 3 large, global businesses with different specialisms:
1. a very well-invested, Tech, Media & Logistics platform, with c4,000 staff globally
2. the world’s No1 Sports Nutrition brand Myprotein
3. one of the world’s major Beauty groups, encompassing Brands, Retail & Manufacturing
Many banks write research on THG, but it's rare multiple analysts with different specialisms come together like this. But for THG, it's the only way to ensure a true understanding of our group.
Here are some key conclusions from report:
✔ THG & the strategy makes sense
✔ THG is wildly undervalued on the LSE
✔ At 141p, well over 2x today's share price, THG would still be at a 50% discount to global peers
✔ THG shares should be worth 272p within 2 years
✔ As Ingenuity Sales reach £1.2bn (c£700m today), THG shares are worth 383p. If Ingenuity EBITDA margins also reach 15% (low single digit today), the shares are worth 452p
THG's shares were 58p when the report was released.
This may not change THG's journey on the LSE, it's put a smile on the face of some THG stakeholders. It's nice to see some proper research. Numis' "studious" efforts led them to conclude THG was worth 35p, before quietly dropping coverage & disappearing😉
Peel Hunt suggest some increased public disclosures on our 3 businesses, to better educate the world on the story & inherent value. This will be take
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