Updates

THG - Mulls IPO of beauty business or strategic stake sale

May 2024

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

The standout line in THG’s FY23 results showed free cash flow breakeven was achieved vs an outflow of £213.4m in FY’22 and debt should fall from here as capex in the distribution network is largely complete (capex dropped to £46.3m compared to £94.9m). Reflecting the exit from several loss-making categories, sales were down 3% to £2.05bn but delivered EBITDA of £114.1m. THG Beauty and THG Nutrition prioritised higher-margin sales, which led to reduced order volumes. However, this led to stronger margin performance with EBITDA margin of 5.6%. Gross margin increased by 1.5% to 42.8%, overcoming high levels of inflation and currency headwinds. I had already reviewed the results, which had been pre-announced, in the February is ...

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