Leaner fitter THG on path to profitability

THG made a pre-tax loss of £202.4m on reduced turnover of £1.751.4m in full year results until the end of December 2024.

The doubling of pre-tax losses from £92.3m in 2023 was however buried on page 12 of the release of the results this morning, where the business pointed to a “transformative year, marked by further strategic progress and operational resilience and balance sheet deleveraging”.

THG demerged its technology arm Ingenuity and is now focused on being a cash generative retail business across two divisions, Nutrition and Beauty.

It claimed adjusted EBITDA was “in-line with guidance and consensus” and a robust financial performance with the business delivering pre-demerger adjusted EBITDA of £123.1m.

Exposure to Trump tariffs are anticipated to be no more than £1m but warned in this morning’s statement that market uncertainty and the impact on consumer demand factors may influence the second half of the year.

Any impact of national insurance and minimum wage increases will be offset by in-year savings and further opportunities for operational efficiencies presented by the demerger, the company said.

Matthew Moulding, CEO of THG commented: “2024 was a big year of change and evolution for THG, the highlight of which was the demerger of the Group’s technology division, THG Ingenuity at the end of the year. Following on from the demerger, we immediately undertook the early refinancing of the Group’s debt, reducing gearing and putting in place long-term facilities to the end of 2029, alongside entering the FTSE 250.

“We are now fully focused on THG Beauty and THG Nutrition, and I’m incredibly proud of the progress each business has made. Following extensive efficiency drives, incorporating both automation and AI, THG has become a much leaner, fitter Group that has shown strong resilience in the face of record whey commodity pricing that placed temporary pressure on Nutrition margins. A strong performance across our Beauty business, delivering ahead of its medium-term adjusted EBITDA margin target, helped the Group to deliver a pre-demerger adjusted EBITDA margin ahead of 2023 despite the transitory headwinds in Nutrition.

“Both our businesses have undertaken extensive model changes over the past 24 months. Beauty has focused on more profitable markets and building loyalty schemes, while Myprotein has pressed ahead in undertaking a successful rebrand, underpinning rapid growth across global offline retail and licensing.

“In the first quarter of this year, THG Beauty was up against a comparative period including an early Easter which is a key trading event, and an extra day’s trading. However, in its home UK and US markets, Beauty retail is trading resiliently, with a strong selection of new brand launches planned throughout the year. It’s also been especially pleasing to see Nutrition momentum improving throughout the quarter with February and March back in growth.

“With a capex light and efficient cost base, we are well positioned to return to sustainable growth and cash generation, whilst developing market share.”