THG Losses Reshape Financial Landscape
Manchester-based e-commerce firm THG increased its operating losses because of a £26.2 million charge for the exit of loss-making discontinued categories and non-core assets. Operating losses increased to £99.5 million from £89.2 million.
THG made headlines this summer when it bought the ailing London business newspaper City AM, arguably another non-core asset. The figures show the newspaper was bought for a knockdown £1.5 million.
In the six months to 30 June 2023, revenue fell 9.3% to £969.3 million from £1.07 billion the year before, according to company results.
Strategy Amidst Inflation
“Inflationary pressures provided significant challenges to consumers and businesses alike over the past 18 months. Our strategy of supporting our consumers through 2022, sacrificing margins in the short term, is bearing fruit. This is reflected in the strong H1 results we’ve posted today, across adjusted EBITDA and cash,” says THG CEO Matthew Moulding.
“The cash performance of the Group has been strong in H1, but also over the last 12 months. Group cash flow performance improved by £350m compared to the previous 12 months, reflecting the completion of our global infrastructure roll-out program, with the Group now achieving significant operating leverage from a well-invested, automated, global platform.”
The company generated record Nutrition revenue of £340.7 million, up 2.6%, Beauty revenue fell 10.4% to £538.7 million and Ingenuity revenue slipped 14.9% to £320.0 million.
On the plus side, underlying earnings (EBITDA) from continuing operations of £50.1 million jumped 22.9% from £40.8 million last year, above the top end of guidance which THG had put at £47 million to £50 million, at a margin of 5.3%, up from 4.0%.
The FTSE 250-listed firm left adjusted EBITDA guidance unchanged for the full year.
