Revenues fall but THG’s Moulding focuses on cash generation in trading update

THG is claiming its best ever quarterly revenue performance for the quarter ending September 2023, as revenues appeared to drop by 4.4% to £466.5 million with falls in all areas of the business.
The highlights in the brief statement include a return to growth for THG Beauty in September due to the strategy of focusing on higher margin sales.
The statement also claims that THG Nutrition delivered “a record Q3 adjusted EBITDA”.
The market will be relieved at the reassurances in the statement that revenue, adjusted EBITDA and cash generation guidance remains unchanged for FY 2023 to be announced in early January.
The company Successful completion of the Group’s three-year global infrastructure roll-out, and the strong efficiencies these investments are delivering, means we now anticipate FY 2024 capex spend will be c.£30m less than previously guided at £100m to £110m (FY 2023 guidance c.£135m).
Activist investor Kelso has advised Moulding to seek a move to the Premium segment of the stock market to give the stock greater visibility.
Moulding appears to have acted on that advice and said: “In addition, we continue to monitor the FCA listing regime review in respect of the move to the Premium segment, with our preparation and focus on the implementation of the outcome when the conclusion is announced.”
Moulding’s full statement this morning said: “Q3 has been another strong quarter of progress across the Group, with each division delivering improved performances. The pivots made within each division to ensure they thrive in a high inflation global environment are bearing fruit.
“The momentum with which we exited Q3 was especially pleasing, with the Group returning to positive constant currency revenue growth of +3.2% in September, driven by a strong performance across our Beauty division.
“We remain focussed on restoring margins to pre-inflation levels while continuing to focus on cash generation. This is reflected in a best ever Q3 profit performance from our Nutrition division. Our cash discipline has been excellent, reflected in delivering positive free cash flow of £5m, despite making c.£140m of capex investments, over the last twelve-month period. The steps we have taken will further underpin the future cash generation of the Group.
“Both our operations and inventory are well positioned ahead of peak trading, with the benefits of our investment in UK and US automated fulfilment centres enhancing the customer proposition through accelerated delivery times, positively influencing customer contact rates and overall satisfaction.
“The Group is exceptionally well invested with a strong balance sheet, with each division well positioned to grow market share in any market conditions.”
If he adds anything on one of his LinkedIn posts, this story will be updated.