The THG PLC (LON: THG) share price plunged 19.4% after announcing its interim results for the half-year that ended on 30 June 2023. The e-commerce company revealed that it had generated pretax earnings of £50.1 million, marking a 22.9% improvement from last year. The pre-tax earnings were at the higher end of the company’s guidance of £47m to £50m.
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However, THG’s operating losses ballooned to £99.5 million during the six months compared to £89.2 million in H1 2022, and its margins rose slightly to 5.3% from 4.0% in H1 2022. The company’s disposal of its loss-making OnDemand business influenced the higher operating losses.
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YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
The company’s adjusted pretax earnings were £47.1 million, a 45.7% increase from last year. Still, this figure included the amount raised from selling the loss-making OnDemand business. However, without the charge related to the disposal, the company’s operating losses had improved by £15.9 million compared to last year.
THG noted robust cash performance in the past twelve months, which was ahead of guidance as it incurred a cash outflow of £20.6 million after £163.1 million of capex, mainly in THG Ingenuity. The company also has a strong balance sheet with £563 million cash and available facilities.
The company achieved record revenues in its nutrition business of £340.7 million, with adjusted EBITDA of £47.1 million, representing a 71.9% increase. However, THG Beauty recorded a significant revenue decline from £17.7m in H1 2022 to £10.6m in H1 2023. The decline in THG Beauty was driven by a one-off industry de-stocking in manufacturing.
Matthew Moulding, CEO of THG, commented: “Inflationary pressures provided significant challenges to consumers and businesses alike over the past 18 months. Our strategy of supporting our consumers through 2022, sacrificing margins in the short term, is bearing fruit. This is reflected in the strong H1 results we've posted today across adjusted EBITDA and cash. The cash performance of the Group has been strong in H1, but also over the last 12 months. Group cash flow performance improved by £350m compared to the previous 12 months, reflecting the completion of our global infrastructure roll-out program, with the Group now achieving significant operating leverage from a well-invested, automated, global platform.”
THG share price.
The THG (LON: THG) share price plunged 19.43% to trade at 70.5p, from Wednesday’s closing price of 87.5p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.