MyProtein owner THG returns to growth and slashes debts

THG shares rose sharply on Thursday after the e-commerce retailer announced it returned to revenue growth. 

The MyProtein and LookFantastic owner said changes made across its beauty and nutrition arms last year were delivering results, underpinning confidence in its full-year outlook. 

The firm’s beauty arm returned to revenue growth in its third quarter and secured market share gains in the previous quarter, THG said. 

Cash and available facilities came in at £279.4million following a refinancing which ‘substantially’ reduced gross debt. 

THG sold Claremont Ingredients for £103million in cash to Nactarome Group in early August, producing a £51million profit in a bid to reduce its debt levels.

THG spun off loss-making technology platform Ingenuity in January to simplify its operations, revive shareholder value, and bolster its finances, after a bruising first four years as a London-listed company. 

On the up: THG shares rose sharply on Thursday after the group published its interim results

THG’s group revenue for the half-year ending 30 June fell 2.6 per cent to £783.4million year-on-year at constant currency.

Its adjusted EBITDA came in at £24million, against £37.1million at by the same point a year ago. 

The group’s pre-tax loss of £66.7million compared with a pre-tax loss of £56.3million a year ago. 

The company’s gross margin fell to 41.1 per cent, against 42.6 per cent a year ago, due to record whey prices in Nutrition. However, management said they expected margins to improve in the latter half of the year. 

By division, THG Beauty revenue fell 5.9 per cent in the period on a constant currency basis to £479.9million, with the decline largely driven by portfolio rationalisation and the withdrawal from certain European and Asian markets.

THG Nutrition revenue increased by 3.1 per cent at constant currency, with second-half revenue growth forecast at between 10 to 12 per cent. 

Chief executive Matthew Moulding said: ‘I’m really pleased at how THG has gained momentum throughout the first half and into Q3.

‘A slower start to the year in Beauty, alongside record whey prices in Nutrition, initially held back performance, but we saw clear improvement in Q2, in particular supported by Myprotein offline retail and licensing sales.’

Moulding said the first half had been a ‘transformative period which sets us up well for our most profitable and cash generative period in H2.

‘Our momentum is positive and Q3 will be our strongest trading period of the year so far, underpinning our confidence in the outlook.’

THG shares rose 8.16 per cent or 2.34p to 31.00p on Thursday, having fallen over 45 per cent in the last year.  

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