Kelso Group Holdings PLC THG Update (2582Z)
May 12 2023 - 5:23AM
UK Regulatory
TIDMKLSO
RNS Number : 2582Z
Kelso Group Holdings PLC
12 May 2023
12 May 2023
Kelso Group Holdings Plc ("Kelso" or the "Company")
THG Update
Kelso notes THG's announcement whereby it has terminated
discussions with Apollo. We note the comment about previous views
of the board being on 'public record' which we take to mean the
previous rejection of 170p a share from a year ago.
Kelso is pleased to see that the current positive trading
momentum has continued during 2023 with improved profitability and
cash neutrality in the current year. We note the comments about
cashflow positivity in 2024 and a 9% EBITDA target in the medium
term, which would produce GBP200m EBITDA on c.GBP2.22bn of
sales.
Kelso previously made a clear statement setting out what we
would like to see THG do. This included a focus on cash generation,
a move to the premium index of the LSE from the standard index, a
share buyback which we would urge the company to enact rapidly,
clear shareholder communication and a clear value realisation
plan.
Kelso invested in THG because it believes in its strong
underlying value. We believe more strongly in this view following
this morning's announcements (RNS and LinkedIn) which clearly show
the board of THG and Apollo also share this view. We also note the
tailwinds from reduced whey prices and logistics costs and
reiterate our previous comments about the sum of the parts
valuation of the business being well above the current market
value. We commend Matt Moulding on his open and honest LinkedIn
post and look forward to being able to remain a shareholder of this
exciting company.
For further information please contact:
Kelso Group Holdings Plc +44 (0) 75 4033 3933
John Goold, Chief Executive
Officer
Mark Kirkland, Chief Financial
Officer
Jamie Brooke, Chief Investment
Officer
Zeus (Broker) +44 (0) 20 3829 5000
Nick Cowles, Matt Hogg (Investment
Banking)
Ben Robertson (Corporate Broking)
About Kelso
Kelso was established in 2022 to identify, engage and unlock
trapped value in the UK stock market. Kelso's strategy is to invest
in situations where there is an anomaly between the intrinsic value
and prospects of a company and its stock market valuation. Kelso
will, in particular, look for situations where it believes the sum
of the parts of a business is greater than the current value. The
company completed a fundraising of GBP3m in January 2023. Kelso
believes that the current market conditions are such that there are
situations where UK listed companies' valuations are not
appropriately matched to their underlying intrinsic value. There
may be instances where Kelso itself could be used as a vehicle by
an undervalued company to spin off a subsidiary into its own
listing. Such a transaction would undoubtedly constitute a reverse
takeover for Kelso.
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END
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