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THG issues profit warning despite record H1 revenue

By Huw Hughes

15 Sept 2022

Business

Image: THG

Shares in THG plunged Thursday after the British e-commerce giant issued a profit warning.

THG said it expects full-year adjusted EBITDA to be in the range of 100 million pounds and 130 million pounds compared to a previous estimate of EBITDA being flat on the prior year.

Meanwhile, it expects full-year revenue growth of between 10 percent and 15 percent compared to previous guidance of between 22 percent and 25 percent.

The group cited rising inflation and consumers reigning in spending as causes of the lowered guidance.

Shares in the company dropped 10 percent to a record low following the update. Shares in the group plummeted over 80 percent in the past year over concerns about its corporate governance.

To make matters worse, the group announced in July it had ended its investment deal with SB Management, a subsidiary of Japanese investment giant SoftBank, in light of “global macroeconomic conditions”.

THG H1 revenue tops 1 billion pounds

Despite these difficulties, THG reported record revenue of 1.1 billion pounds in the six months to June 30, representing growth of 12.3 percent year-over-year and 64 percent year-over-two-years.

It said its beauty division was the key driver of that, with growth of 20 percent year-on-year, in part thanks to the impact of the recent acquisitions of Cult Beauty and Bentley Labs.

Its active customer count across beauty and nutrition increased by 110 percent compared to pre-pandemic 2019 levels.

Despite the strong revenue growth, adjusted EBITDA for the period dropped to 36.1 million pounds from 81.2 million pounds a year earlier.

The group also announced the appointment of Gillian Kent and Dean Moore as new non-executive directors.

Kent is currently a non-executive director at Ascential plc, Mothercare, Marlowe, and SIG, while Moore is currently the interim CFO of Dignity, a non-executive director of Griffin Mining Limited, and senior independent director at both Cineworld Group and Volex.

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