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That should have said definitely NOT the focus going forward

I’m not buying into your posts GTC….. each one ensures there is a dig or an element of doubt in each case.

THG does know best……

Frozen FMCG should not be their main focus (they don’t make any of it after all).

Iceland has turned a corner with their new focus on brand’s initiative….and can’t be that shabby if it’s worth £30m of retail sales just for the THG freezers. Interesting to note that the new Meatza product is made in Poland.

Nice piece of supplementary business for raising brand profile, a springboard for new partnerships worldwide, a threat to existing unhealthy brands…but definitely the focus going forward….in my humble opinion.

“Matt Moulding, chief executive, THG”

“Last year, we completed a huge, multi-year global distribution and automation roll-out, so we’re now much more efficient in servicing consumers, with dramatically improved delivery timings and service. The cost savings and service improvements from these investments are really substantial.”

https://www.retail-week.com/people/research-44-retail-leaders-reveal-strategies-for-2024/7044649.article

Kelso sold well before the update….

Quite a lot of none sense on here today….which probably relates to the swings in sp.

Well it seems that Jodie has had a big birthday recently as Matt has just posted photos of them in Italy with friends on Instagram. Lake Como and Venice it would appear.

I know little about corporate property ownership or clever tax accounting in business terms, but I’m not sure I ever thought this was going to be important to Matt or any plan he may or may not have.

I’ve been watching Moulding Capital on Companies House and as i shared earlier in the year, the 2 directors are now both part of the Moulding Foundation, including Jodie. All THG directors resigned this/last year. The main changes happened in July, with accounts published recently: https://find-and-update.company-information.service.gov.uk/company/13153381/filing-history

Ultimately, naysayer or ramper, you either believe the business will succeed or fail. Clearly, we have posters in opposing camps.

Personally, I believe it will succeed…in what form, I don’t know, but I believe that the challenges it has spoken of, have bought other companies to their knees…and that THG is in the best place we could have expected after recent turmoil. When you compare it to peers, the share price is not where it should be, due largely to shorters and an outspoken CEO.

But I don’t buy into the narrative that they haven’t done what they said they would do…because Covid and the cost of living crisis has ensured that most consumer facing companies have not stayed on the same path that they intended to, 2 or 3 years ago. I work in FMCG and every day is not as it would have been predicted to be then…and every business I know has had to pivot to survive.

So, I am where I am because I still believe that the business is fundamentally strong. That’s my personal opinion, which I accept differs to others.

I genuinely though, would not spend time on a board that I had no interest in buying shares in, as my time is precious.

Wow, I’ve been off line for most of this week….so I’m amazed how the tone has changed in that time.

I’m still here and I’m still waiting for whatever the future holds.

My personal view is, that the quality that was missing from the RNS & the investor call, is because the chairman is missing (very ill I think someone said). These 2 communication opportunities reminded me of THG pre-The Good Lord. Matt has slipped back into his own world/head, which is inevitable when no one is here to challenge him on the path he is taking, or the messages he is sharing. The give-away was Matts attitude to one of the brokers on the call, when he was asked about whether some detail had been stated in the RNS…and he responded by laughing and saying it’s on LinkedIn (or words to that effect). That was a childlike reply, from a boy who’s got his train set back, even temporarily.

I am as frustrated as everyone else, especially as I’m significantly under water again….but I still believe that the future will be bright.

Have a good weekend.

Accessible Link (not via LinkedIn) if interested:

https://www.thg.com/news/thg-confirms-net-zero-targets-validated-by-sb-ti

…and did their consumer base, it matters!:

“We’re proud to announce that the Science Based Targets Initiative (SBTi) has confirmed that THG’s sustainability targets align with the latest climate science, aimed at limiting global warming to 1.5°C above pre-industrial levels.

“THG has taken a significant stride forward as our net-zero targets have been officially validated by the SBTi. Two years ago, we signed a commitment letter with the SBTi stating that we would be aligning our climate mitigation targets with the latest science.

Today, the validation of our net zero targets by the SBTi reaffirms our dedication to achieving a net-zero status as a company, minimizing our climate impact." – Matthew Moulding, CEO of THG.

Learn more here: https://lnkd.in/e3xqgFB4”

Link to the webcast is on the THG website here:

https://www.thg.com/investor-relations/results

“Positive free cash generation expected in H2, resulting in free cash flow breakeven for FY 2023.”

People who have a short term view don’t like Matts methods….and are heading for the door, because they don’t like the risk or see opportunity’s elsewhere that they are comfortable with.

If you take the time to get your head around the information supplied yesterday, it’s clear that huge strategic progress has been made. Even the negative financial points are because of strategic decisions that mean short term pain for long term gain.

All of the reveals suggest a strong second half for beauty and nutrition, but exiting small ingenuity customers may still drag to year end.

This is no time to sell in my view. It’s clear growth for MP will be in the US and I’m excited to see who we partner with, as I’m convinced that this is what’s on the horizon. If there is an investment in Nutrition or a float, the value of that division will be visible and re-rate would be inevitable. I haven’t waited over 2 years to not see it.

Just my view as always.

Piper, this is worth a read:

https://www.investopedia.com/articles/investing/090715/comparing-spinoffs-splitoffs-and-carveouts.asp

Explains it better than I can…

Bye bye everyone who has chosen to exit.

I guess we won’t be seeing you for a while, so close the door on the way out ….

Yes, that was the bit related to nutrition….

The bit relating to Ingenuity, which implies that capex spend is complete is in 2 places.

First circa 18 minutes in when Matt talks about the divisions. He says:

“Over the last 3 years we have spoken at length on our strategy to build out a global fulfilment network, localising our operational and distribution hubs in key markets. This phase of expansionary investment was concluded with the activation of automation in our New Jersey warehouse in the US in April”.

He then mentions it again in the summary, where he says:

“Other strategic milestones this year have included…..the completion of the global fulfilment expansionary investment underpinning additional capacity for efficiency improvement and operating leverage”.

Having listened to it again this morning, it strikes me that the 5 year self funding timeframe must be related to the time it will take to fill spare capacity sufficiently for the facilities to be operationally break even…as they say they now have huge capacity.

It also strikes me the similarities to Amazon here, including the last mile delivery eco initiative, so I now see why Ingenuity may be an acquisition target, even for Amazon…especially as they have a forward view on self funding.

Unless I’ve read it wrong, It feels like THG are trying to self fund an expensive operation which will be very lucrative post 5 years time. So I feel we are being unfairly treated, when other grocery delivery models have raised funds externally and are still not in great shape.

I would encourage others to re-listen to the recording. It’s made me more bullish, not less. I’ll just have to ignore the Mr Market shenanigans in the near term.

I have re-listened to the Q&A and I’m convinced there is no strategy detail because some sort of nutrition deal is close. I just think Matt answers as truthfully as possible, without giving away any detail, as he’s not allowed to.

MyProtein is definitely not for sale, so it’s either going to be spun off and listed in the US to help with market growth, or there will be a partial sale to a strategic investor, probably with some kind of business interests in the US.

If you remove the anger about the share price reaction today, Matt is actually very informative in my opinion. I feel better for listening to it again.

I will just put my tin hat on again and sit it out…again.

DI - the piece on ingenuity capex was within the main presentation not the Q&A. I can’t remember where though, sorry.

In terms of the food piece…my take is that THG has a strong ambient MyProtein core food business, which lends itself to the ingenuity marketplace in a country (UK) where ambient food distribution/delivery is competitive. This is where THG make money.

They have no manufacturing or distribution capability in chilled or frozen food and the cost to serve is much much higher in these spaces than ambient, so setting it up will not be attractive. It’s also competitive. So, the licencing model is the perfect low risk, potentially high penetration route to raising MyProtein brand awareness and engagement with new “lifestyle” customers, who appear to be their future target market. So, I think Matt is focussed on expanding and delivering their core capabilities to the people he wants to be their future core consumers.

I do however believe that by entering into these new food categories, he is generating interest with prospective investors, as he shows them how new entrants can muscle in.

The US market is completely different. Grocery delivery is difficult due to the scale of the country, so having a physical retail presence will be important for brand recognition and engagement, especially again if they are going after the “lifestyle” market.

So, I think what he said today just makes commercial sense.

I have just re-listened to the Q&A and it does sound as if something will happen with nutrition. If there’s a partnership with an existing food business, they may be interested in driving that side of the MyP portfolio, and leave Matt to the core MyP ambient business. Who knows…

I believe Matt said that the Iceland range would take a £30m share of the market (or something to that effect)…..not that it would be worth £30m to THG. The figure today will be the cash from the licensing deal, the details of which we don’t know.

And yet allegedly the FT has printed this:

“From the FT

https://www.ft.com/content/1d1903b4-1ce9-492f-8ca9-4e6748b5e456

Moulding added that inflationary pressures were still high but recent trading had been encouraging as THG sought to lower costs and streamline operations. THG maintained its forecast for full-year adjusted earnings before interest, taxes, depreciation and amortisation of about £120mn and insisted that it would prioritise “profitable sales”. Wayne Brown, an analyst at Liberum, said this “appears achievable given tailwinds from whey prices, better beauty manufacturing margins, efficiency savings and Ingenuity contract wins”.

The FT are usually one of the most negative….