Huddled Share Discussion Threads

[garybrandon] 12/11/2024 11:42

Article By Myles; a very good write up on Huddled group, although it’s a little conservative in my view.

I would add the following from the Trading update 30/09/2024

Let's Explore

On 10 May 2024, the Group entered into a strategic partnership with Wicked Vision Limited. Under the terms of the agreement, Wicked Vision initially acquired a 25% stake in the business, with Huddled retaining 75% ownership. The agreement allows Wicked Vision to increase its stake to 50% once Huddled has received a net inflow of circa £400,000, being the value of the working capital in the business at the time the deal was completed. Wicked Vision has taken charge of the day-to-day operations of the Let's Explore business and we have already started to observe encouraging signs of progress.

Post-period end, in July 2024, an updated Vodiac Pro product, which includes a new and improved headset and 100 VR experiences, was launched on QVC USA. The new product was received well with all 6,000 units ordered selling out across two airings. QVC USA has since ordered a further 15,000 units to be delivered in November, and QVC UK some 6,000 units.

In addition to the QVC sales and a number of smaller B2B sales, we have commenced our Q4 B2C, and Amazon sales strategy for the Let's Explore range, including Oceans, Wildlife and Space. In total we hold circa 12,000 units which we plan to sell in Q4 2024 via Amazon and via our website priced at $99.

[bennywin] 12/11/2024 10:37

Seems fair to me .

[hamidahamida] 12/11/2024 10:10

Article By Myles Huddled Group #HUD has been creeping up over the past week, and now sits near the top of the range that it's been trading in for the past 18 months. I think a breakout is imminent.@huddledgroup owns three direct-to-consumer e-commerce businesses, all of which specialize in buying surplus stock from their respective industries of focus at extreme discounts to the retail price, and then selling that stock at (slightly less) deep discounts to their own customers.The businesses acquire stock through taking on items that are approaching their "Best before" dates (that supermarkets would not take on): that are held in large surplus in the supply chain (be it by producers / packagers / wholesalers / retailers); that have incorrect or damaged packaging; that may have undergone a brand change after entering the supply chain, etc.The three businesses are as follows:- Discount Dragon (discountdragon.co.uk) - acquired for £3.95m (100% of consideration paid in shares at 2.64p) in August 2023. Specializes in branded fast-moving-consumer goods (food, alcohol, cleaning products, etc.).- Nutricircle (nutricircle.co.uk) - acquired for up to £0.3m (up to £0.2m cash, £0.1m shares) in April 2024. Focused on foods for healthy and specialized diets.- Boop Beauty (boopbeauty.co.uk) - 75% stake acquired, for a modest undisclosed sum ("roughly equivalent to the value of stock on hand, with a commitment to inject further capital for growth") in July 2024.Discount Dragon is currently the largest of the divisions, accounting for circa 80% of group revenue at the present run-rate. As at end September, that run-rate was circa £1m per month; and the division had just move into a modest operating profit in the last two weeks of that month. DD is growing sales at an extraordinary rate: in August 2022, it recorded sales of only £75k for the month; this had increased to £450k by August 2023.In FY 2023, Nutricircle (formerly known as Food Circle, before HUD rebranded it) recorded revenue of £1.24m, and a net loss of £46k. In just the month of September 2024, the division recorded revenue of £225k and moved into a "modest operating profit".The final division, Boop, was relaunched on 12 September, and recorded £25k in sales in the three weeks to month-end.The approximate annualized revenue run-rates at end-September for the three businesses were therefore: £12m for DD; £2.7m for Nutricircle; £0.5m for Boop; £15.2m for the Group.All three divisions have now been relocated into a single warehouse in Leigh, UK, which will result in significant synergies and resultant margin boost.Presently, the operation can deliver up to 40k parcels per month. Assuming an average order value of £40, that's annual revenue of up to £19.2m pa. Evidently, the combined businesses are rapidly approaching max capacity, and so it is very welcome news that HUD has secured an agreement with its landlord to double the operational space at the warehouse, with expanded operations commencing February 2025.DD and Nutricircle had both achieved subsidiary level profitability (albeit very modest - presumably 1-2% in EBIT margin) by end September. Net cash stood at £2m, and inventory £1.8m. Management was keen to stress that those existing cash resources will be sufficient to take the company through to cash flow positive next year, and that it does not intend to raise further cash via equity for the foreseeable future.Given the recent transitions to profitability at operating level in its larger two subsidiaries, I suspect that HUD would be able to secure access to a sizeable revolving credit facility from a bank, if required to accelerate expansion (notably, purchasing of inventory).[Confidence in the company's future (and in the strength of its balance sheet!) was also strongly demonstrated by the CEO making multiple open market share purchases totaling £177k over the last 12 months, including £103k worth acquired only two weeks ago.]......The value?The doubling of warehouse capacity - which comes online in 2-3 months - and assuming a £40 AOV, could push sales at max capacity to close to £40m pa.Assuming a gross margin (including fulfillment costs, advertising expenses and warehouse personnel) of 12.5% to 15.0% (mgmt's stated target), that'd result in a GP of £5m to £6m. Less circa £3m for G&A and other PLC costs... and suddenly that EBITDA figure of £2m-£3m versus HUD's current mkt cap of £11.2m (and enterprise value of only £9.2m) looks highly appealing!On a relative valuation basis, we must also consider Nordic peer, Motatos. Having launched in 2014, it hit revenues of €68m in 2021, €76m in 2022 and €90m in 2023. In 2022, it raised €38m in equity at a post-new money valuation of over €300m - despite being lossmaking in each of 2021 and 2022.With regards to HUD, we can see that those investors in Motatos were happy to pay upward of 3x NTM Sales.Even if we were to use a multiple of only 2x, that would suggest an enterprise value for HUD of £50m to £70m (I'm assuming sales grow to anywhere between £25m and £35m next year).Clearly, HUD trades at a very substantial discount to this recent precedent transaction.

[garybrandon] 06/11/2024 21:46

Some good buying today, Boop Beauty is flying, Discount Dragon is working at full capacity with Nutricircle and Let’s Explore VR contributing massively to the bottom line in the Nee Year!

I’ve no worries holding HUD for at least 2 years to treble my investment.
No extra funds needed with lots finance in the bank, very easy hold from here !

[garybrandon] 05/11/2024 07:29

Read other BBs not your own ego!!

Easy to out the multi account holders !

[johnyee 7] 28/10/2024 11:22

Some very big trades

[yump] 16/10/2024 13:16

If you’re 100% certain of your facts, then simply name the string of profitable businesses and what shareholders got out of them.

Very strange if your’re 100% certain about the future and yet can’t back it up with the objective facts.

Perhaps just having a punt and feeling lucky.

But please don’t post false “history”;. It looks daft and its deceptive.

[garybrandon] 16/10/2024 13:09

Due to trolls posting ridicules comments, I’ve now double checked my research,

I believe I’m 100% correct on my beliefs that huddled group are going to be a £100m company given time and current progress.

I’ve not bought in here to listen to trolls looking for a cheaper entry !!!

[garybrandon] 13/10/2024 08:59

Trolls had to arrive sooner or later, just read the RNSs, filtered!

[yump] 11/10/2024 07:27

I noticed this comment earlier: “ the BoD have a successful proven track record in build up businesses to be sold at multiple profits”. Is that from a bit of PR prose ?

Utter nonsense. Also it doesn’t make sense anyway.

They chickened out of a much more interesting business, just when it looked like it was recovering after Covid. (And kept a stake I think after selling it cheaply). That wasn’t the first time some of them crystallized shareholders paper losses.

There is no record of developing a business into a permanently profitable and growing business.

If that’s what you’re expecting here, good luck, you’ll need it.

[johnyee 7] 10/10/2024 08:19

youtube.com/watch?v=D8BXgivCkWg

Boop Beauty ad

[garybrandon] 10/10/2024 07:49

Added more this morning that is showing as a sell, my biggest holding £ wise by far, stockbroker comments early next year will be very interesting giving more clarity going forward!
Gla

[ted1066] 01/10/2024 09:34

Distruption

[ted1066] 01/10/2024 09:33

Not new premises, their landlord agreeing to increase their capacity at the current location, so avoiding the distribution of moving to new premises.

[garybrandon] 30/9/2024 15:06

Much better results than expected, orders held back due to warehousing capacity issues not being big enough, we move to new premises next month.

Only get stronger from here as 4th quarter is our busiest period of the year !

[johnyee 7] 30/9/2024 14:55

Don't forget the Q&a interview at 5.30 today at investor meet

[garybrandon] 30/9/2024 06:54

If that’s all you’ve got then it’s confirmed that you are !

[garybrandon] 30/9/2024 06:53

You’ll know all about IPhone pretex won’t you Benny Hill !!

[bennywin] 30/9/2024 06:51

Maybe you should learn to spell before you accuse someone of being clueless.
Doh !

[garybrandon] 30/9/2024 06:47

Ppl with nothing better to do than troll BBs spreading negativity for their ends !

Early stage growth business for fs !!!

[garybrandon] 30/9/2024 06:45

Very early days into the business model with fantastic growth, typical comments from none investors without a clue !