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THG PLC on Thursday said results were in line with its expectations last year, as it completed the spin-off of its technology arm and positioned itself for inclusion in the FTSE 250 index.
Manchester, England-based THG, formerly known as The Hut Group, is an online retailer of beauty and nutrition products. At the start of January, it completed the demerger of its Ingenuity business, which offers the THG e-commerce platform to other retailers.
Also this month, THG changed its listing category on the London Main Market to ’equity shares (commercial companies)’, which makes it eligible for FTSE UK index inclusion.
THG shares were down 4.5% to 37.73 pence early Thursday. It has a £499.4 million market capitalisation, This likely will allow it to join the FTSE 250 index of mid-cap stocks at the next quarterly review, which will be effective in March.
Turning to 2024 results, THG said adjusted earnings before interest, tax, depreciation and amortisation are expected to be in line with market consensus, excluding discontinued categories. The second half of the year brought improving underlying trends for the Nutrition business, particularly in the UK, THG said. In the Beauty business, THG said ‘promotional discipline’ led to expansion of profit margins.
Looking ahead to 2025, the Nutrition and Beauty businesses - what THG called ’RemainCo’ - is expected to see mid-single-digit revenue growth.
Total 2024 revenue was £1.94 billion, down 5.0% on 2023, or 3.1% at constant currency. Within this, Beauty contributed £1.11 billion, up 3.3% at actual currency, and Nutrition £579.6 million, down 12%. Ingenuity revenue was £191.8 million, up 16%.
In the fourth quarter alone, total revenue was £565.9 million, down 7.1% at actual currency rates and 5.0% at constant currency. Beauty contributed £348.4 million, down 1.3% at actual currency rates, Nutrition £145.2 million, down 13%, and Ingenuity £58.8 million, up 23%.
Founder & Chief Executive Officer Matthew Moulding highlighted the performance of THG’s largest division in 2024. ‘Our Beauty business had a standout year, underpinned by strong performances in the UK and US. The continued success of our customer loyalty and reward program, and the opening of our first-ever Lookfantastic physical store, further cement our leadership position in the global Beauty market. These achievements demonstrated significant progress against our strategic priorities and set the stage for an even more remarkable 2025.’
THG also noted that a UK ruling on value-added tax for protein powders could provide an annual adjusted Ebitda upside of about £10 million.
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