REG - Kelso Group Holdings - THG Update

Kelso groupAnnouncement

12/05/2023 10:30

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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 £200m EBITDA on
c.£2.22bn 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 £3m 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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