Four years ago, Matt Moulding brought his loss-making The Hut Group to the market, raising a total of £1.88bn in the process, valuing the business at £5.4bn.
The 376.27m shares were offered at 500p each, with some £920m worth of new money going into the group’s coffers, and the balance paid to vending shareholders, including Moulding.
The group’s shares went up to 818p early in 2021 – just a couple of months before Covid struck.
That was the good part.
And The Business Now
The group was renamed as THG plc, with its shares quoted on the Main Market (LON:THG).
The group describes itself as a leading vertically integrated, global ecommerce technology group and brand owner, powered by its proprietary technology platform, Ingenuity, through which it also provides end-to-end e-commerce solutions for brands to reach a global e-commerce consumer base.
It operates under three core businesses – THG Beauty, THG Nutrition and THG Ingenuity – each operating in resilient, growing markets and each scaled from the UK to hold global leading positions in their respective sectors.
THG Beauty is a digital-first brand owner, retailer and manufacturer in the prestige beauty market, with a portfolio of own-brands across skincare, haircare and cosmetics.
THG Nutrition is a group of digital-first Nutrition brands, which includes the world’s largest online sports nutrition brand Myprotein and its family of brands, with a vertically integrated business model supported by global THG production facilities.
THG Ingenuity provides a complete digital commerce solution for consumer brand owners across its three pillars of technology, digital marketing and operations.
Why Invest In THG?
When asked the question ‘why invest in THG?’ the group responds by stating that:
“We are a global digital innovator revolutionising how brands connect to a worldwide consumer base.
We are transforming how consumer brands go to market in the digital age.
Through our proprietary platform Ingenuity, we are providing a simpler, integrated and frictionless retail experience for consumers and brand owners.
We are democratising online retail – overcoming its structural technology barriers by enabling brands and retailers to have direct relationships with consumers, improving accessibility.”
Recent Performance
The group is still loss-making.
In the last five years, it has turned over some £9,218m in revenues and recorded losses of £1,565m.
Results Due Next Week
Today the whole group is capitalised at just £801m, with its shares trading at around the 61.5p level.
They rose 4.5p yesterday, ahead of the group announcing its Interim Results, for the six months to end-June, next Tuesday morning, 17th September.
Toward the end of June, the group issued an AGM Trading Statement which declared that:
“The group has made further progress in H1 2024 in line with previous revenue guidance, and Q2 will represent the third consecutive quarter of year-on-year revenue growth.
The group’s performance is underpinned by positive trading within the Beauty, external Ingenuity and offline Nutrition businesses, which have helped offset continuing FX headwinds within Asia.”
At that time, the group stated that its guidance to the market for 2024 remained unchanged, with adjusted EBITDA expected to range in the £133.8m to £156.5m range.
In My View
It will be very interesting to see just what publicity is built up before and after the Interims are revealed – will they point the way to the group breaking into profitability and, if so, by how much?
There are some 10 analysts that follow the group, with an average consensus for a 110.6p Price Objective on the shares.
In my opinion, this group’s shares, which bottomed at around 35p two years ago, and are now trading at 61.5p, will take quite some time to break back up through the 100p level again – it really would take a string of good corporate news items to bolster to such an equity value.
Stand back and just watch before making a move.