The THG PLC (LON: THG) share price has risen 140% since the year started as investor sentiment towards the company turned bullish. Today, the company announced that it had completed the strategic review of its loss-making operations and disposed of some of them.
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The British e-commerce retail company revealed that it had decided to exit THG OnDemand, which had been sold to a NewCo under the leadership of the previous management team and with the financial backing of Gordon Brothers, the advisory and investment firm.
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The company noted that NewCo will remain an ingenuity company despite the spin-off. THG also revealed that it had earned a cash consideration of about £4 million for the sale of OnDemand and specialist provider of cycling equipment ‘ProBikeKit’ to Frasers Group PLC in Q2 2023.
The sale of the two business units has shaved off losses worth £14.6 million incurred during FY 2022 by THG. The company also noted that The FY 2023 financial impact is incorporated into existing market guidance (inclusive of one-off costs), with discontinued revenues non-recurring after Q3 2023.
THG revealed that its free cash generation for the twelve months ended 30 June 2023 was ahead of expectations, having come in at approximately £40 million, including the disposal of and sale of non-core freehold assets.
Given the latest update, it is safe to say that THG is on solid financial footing and that we could see the current rally continue for the foreseeable future.
Matthew Moulding, THG’s CEO, commented: “Through the years, our incubator division OnDemand has cultivated our talent, technology and trading strategies. I am delighted to see management and Gordon Brothers continuing the fantastic work of the OnDemand team, and I have no doubt the ProBikeKit business will continue to thrive under Frasers Group. We will remain close partners with both the OnDemand management team and Frasers Group through continued Ingenuity services.”
*This is not investment advice.
THG share price.
The THG (LON: THG) share price has risen 139.91% since the year started. Will the uptrend continue?
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