THG is advancing plans for the demerger of its technology platform, Ingenuity, to enhance shareholder value.
- The company is exploring potential structures for the demerger but has not yet set a timeline.
- Post-demerger, THG will focus on its beauty and nutrition sectors after a slight rise in profits.
- Sales in the beauty division rose significantly, while Ingenuity also experienced notable growth despite challenges elsewhere.
- THG anticipates increased sales momentum in the coming quarter, particularly in its nutrition arm.
THG, a leading e-commerce entity, is moving forward with the separation of its technology platform, Ingenuity, in a strategic effort to optimise shareholder returns. The company is currently assessing various structural options for this demerger, though a concrete timeline is yet to be determined. This significant move is expected to allow THG to concentrate on its core beauty and nutrition operations.
During the first half of the year ending 30 June, THG reported a modest profit increase of 1.6%. However, this was juxtaposed against a 1.7% decline in overall sales. This mixed performance underscores the strategic need for operational focus and structural realignment.
The beauty division emerged as a standout performer with a 5.7% increase in sales, reaching £531 million. Adjusted EBITDA for this segment hit £32.6 million. Meanwhile, Ingenuity’s sales surged by 14.1% to £80.2 million, with an adjusted EBITDA of £11 million, effectively balancing some of the temporary setbacks faced in the nutrition division following a rebranding initiative.
The strategic alliances fostered by THG, such as the partnership with Frasers Group, have been pivotal. This collaboration includes the integration of the Frasers Plus credit offer into the Ingenuity platform, a move expected to bolster future growth.
Looking ahead, THG remains optimistic about returning to a sales growth trajectory in the third quarter, particularly as it anticipates strengthened performance in the nutrition sector.
THG’s strategic manoeuvres signal a keen focus on capitalising on growth opportunities in its core sectors amidst ongoing structural changes.
