The Hut Group

 

bldm19 Jan '22 - 18:44 - 8823 of 8903 FROM ADVFN

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Bookbroker I agree. I said the same last week. They need to start making money. They need this for 2 reasons. First, the environment in which we are and have been going into does not tolerate growth loss making companies. Second, at the moment, they are losing money per share and the market is not convinced they have IP that is hard to reproduce and hence valuable. There is nothing ingenious about ingenuity despite the name. So you have a retailer who is losing money. Great. I like their growth but revenue in retail is nothing. You can grow an unprofitable retail company very, very quickly. The trick is making profit. Let me give you an analogy. You can grow a financial company very quickly - just start lending money. In no time you'll have a massive book with low quality. Retail is similar - you can grow your revenue very easily, the trick is to grow profitably.

THG at the moment is a bit of a mess. They sell makeup, they sell nutrition, they claim they've got a tech company. At the same time, they've acquired all kinds of random companies along the way - for example they own preloved.co.uk - I'll be surprised if anyone here's heard of this one let alone used it. Understandably, they look like a ball of sellotape that has picked up all kinds of crap along the way and MM is now repackaging the crap and trying to sell it as something useful. Best way out of here in my opinion is for them to reorient the business for profit. Growth does not matter here. We need to see profits.