Shares I looked at this week (26 May 2025)
Celebrus, THG, and MONY (#CLBS, #THG, #MONY) - I'm really excited about one of them, and barge-poling another.
Celebrus #CLBS $CLBS.L
This is a B2B software company that specialises in Customer Data Platform (CDP) software for large enterprises. A CDP is a critical part of any marketing and customer data tech stack, allowing companies to store, manage, and activate on customer data to maximise business value. A CDP is what drives many marketing activities, as well as personalisation enhancements on websites, apps, and emails. Also can be used for things like Billing, and creating personalised upgrade offers (ie the sort you get from your Broadband or Mobile company).
Personalisation and the “unlocking of first party customer data” is very much in vogue at the moment in Marketing and Digital teams in almost every company. So CDP is a fast growing subsector of SaaS software.
Celebrus has a focus in the Financial Services and Insurance industries, and has a wide geographic spread of clients globally.
They recently announced a revenue warning, albeit profit was good. However, two more shocks were included in the announcement - changing how they recognise revenue, and also a potential revenue drop from one of their largest clients.
The revenue recognition change is often a red flag, as companies in trouble will do this to mask their underperformance in the short-term. Here, it seems sensible; changing from recognising the revenue at the date of sale, to over the lifetime of the contract.
The potential large customer revenue drop later this year also seems sensible. It seems like Celebrus has been a reseller of third party software to the client for years. Now it is changing the scope to just Celebrus software. Makes sense, focus on the core. But it seems like the third party reselling activity was profitable (otherwise they would mention that it wasn’t), so we will likely see a revenue and profit headwind later this year.
Both of these are not quantified at all, which is very bad form from management. At least give a range to work with! Brokers have withdrawn their future forecasts… so we’re swimming a bit blind here.
On top of this, the ARR growth rate is now only +14% YoY as of Mar25. Even after the change in the revenue recognition policy. Which is low for a high-growth SaaS company, that is sub-$50m/yr revenues.
So how to value? We have no idea of profit and revenue for FY26 onwards at this moment. Could be significantly lower given the accounting change, and large customer renegotiation. The market cap is currently trading at ~2x Sales, which is low for a SaaS company. When you strip out the $31m net cash, then it is barely ~1.4x Sales, which is a bargain.
ARR is currently less than half of Sales, which means the company is still heavily dependent on one-off license sales still. They are, slowly, transitioning to fully recurring model instead.
Given the geographic footprint and stronghold in certain industries, it is probably only a matter of time before a USA-based SaaS business at a much higher valuation comes bidding for Celebrus.
So what price to buy? I’ve done some calculations - assuming the worse case of a 15% revenue drop, and think that if this drifts to below 148p (currently 168p) then the risk-reward balance is way too skewed. At such a low price, a strategic buyer could easily justify offering a 40-60% premium to secure a takeover.
THG #THG $THG.L
I last wrote about THG in Aug24, when it was trading at 60p+. Back then, I decided to keep it on the watchlist. That was a smart decision, as the shares are now at 25p.
However, the company has gone through some major changes since then. It has spun off the Ingenuity business, which was heavily loss-making and cash-burning. It has raised quite a bit of equity financing, at 49p in Oct24 and 32.5p in Mar25, to pay down debt. Currently, debt is 2.2x adj EBITDA; not comfortable but also not bad either.
Clearly, there are many investors barge-poling THG, and for good reason. However, as a contrarian investor, I love these situations where there is barge-poling happening, YET the company is in a very different place now than it was 6 months ago.
What has changed? Probably three major things in my mind:
Debt paydown, now just 2.2x adj EBITDA, and likely to reduce further for the next two reasons…
Hiving off Ingenuity and now focused on just two mature, profitable divisions: Beauty and Nutrition. Very easy to understand. Capex much reduced, focused on cash generation, and profit generation.
Nutrition had a horrid 2024 as it went through a rebranding exercised that really hit revenues and profits. On top of that, Whey input prices saw a massive spike. All these are now in the rear-view mirror, as evidenced in the latest trading update. On top of that, their licensing activities globally for the MyProtein brand, as well as distribution through offline partners (eg grocery stores) are accelerating.
And Beauty is doing OK? Highly profitable, and somewhat of a stronghold in the UK market.
THG is still not pink in health, but could the current share price be too low? When I do a conservative scenario of only +10% revenue growth and a modest 7.5% EBITDA margin, and then assume a fire-sale bargain 5x EBITDA to EV valuation, that gives me a 23-24p share price which is not far off the 25p it currently trades at.
Then if you take the £400-£600m bid approach for Nutrition recently by Selkirk, whose CEO used to be on the board of THG until 2024…
Nutrition was only a third of the revenues in FY24, Beauty was the other two thirds. Both can get to roughly the same margins IMO in the medium-term, so the bid is roughly valuing the whole group at a £800-£1200m EV, compared to the current £350m market cap + £200m net debt (£550m EV). So clearly value here.
Frasers last bought in early April to up their stake to 11.1%, but haven’t bought more to cross 12% since the FY results and trading update at the end of April. Why? Either they see something bad in that release. Or maybe they are in negotiation for a bid, and of course can’t buy now?
I’m very tempted to buy, so might actually pick up some this week and could be a holder by the time you read this!
MONY #MONY $MONY.L
This used to be Moneysupermarket, but they decided to do a name-change, which is sensible given the range of websites they now own.
There’s a recent AGM Trading Update, but what got my attention was the flurry of director selling. Lets see who has been selling….
CEO - Receives vested shares in Mar25, sells only to cover taxes, retains £121k worth. Did the same last year, so no change in behaviour.
CFO - No activity
Chief Risk Officer - Receives vested shares, sells ALL £153k worth at 201p. Last year, he only sold to cover taxes. He has also done sales in Feb25 (£24k worth) and Oct24 (£30k worth).
For a company that is in regulated industries (telco, energy, insurance, etc) then the CRO is quite important in the company.
Chief Commercial Officer - same, sells ALL his vested shares, £328k worth. Last year only sold to cover taxes.
Chief People Officer - sells only to cover taxes, retains the rest of vested shares.
Editor of Moneysavingexpert - Sells all his vested shares in two tranches, and then sells even more (£43k worth) in May25.
Chief Data Officer - also sells all his vested shares, £162k worth. Last year only sold to cover taxes.
Chief Technology Officer - same here, sells all £59k of vested shares, didn’t do this last year.
Chief Customer Officer - sells all vested shares, £204k worth. Didn’t get any vesting last year.
General Counsel - same, sells all £165k worth, no vesting last year. Along with the CRO selling, this is worrying given the role the General Counsel will play in the regulated nature of their business lines.
So really, the only 2 people doing positive Vesting trades this year was the CEO as well as the Chief People Officer. Compared that to 8 of the C-suite choosing to get rid of all their Vested shares, many of whom last year only sold to cover taxes.
And this is not because the share price is high either; MONY was trading slightly below the price at the Vesting Period in 2024!
So I take this as a barge-poling signal, and while I quite like the company as a whole, I’m going to avoid for at least the next 12 months, to get through a full cycle of HY and FY results, before evaluating again.
#MONY
That is excellent detective work there Boon.
Thank you