THG, a global leader in beauty and nutrition, has revealed intentions to separate its THG Ingenuity division. Amid these announcements, the company is thoroughly reviewing potential structures to enable this demerger. Furthermore, the company has indicated that specific timelines remain uncertain despite tax clearances being approved by HMRC.
Meanwhile, the group is also contemplating transferring its listing from the equity shares (transition) category of the Official List maintained by the Financial Conduct Authority to the equity shares (commercial companies) category. This transfer could pave the way for THG’s stock to be eligible for inclusion in the FTSE UK Index Series.
These strategic changes coincide with the publication of THG’s interim results for the half-year ending 30 June 2024, reporting a 2.2% increase in revenue and a 1.6% growth in adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) on a constant currency basis.
Matthew Moulding, CEO of THG, commented: “The group continued to deliver against its strategic priorities through H1, with the performances of both Beauty and Ingenuity particularly strong. Reporting another six-month period of continuing sales and adjusted EBITDA growth was especially pleasing given the FX headwinds suffered within our Nutrition business, which negatively impacted H1 profitability by a further approximately £5 million. Local manufacturing and fulfilment is now live in Japan, which will steadily scale to reduce exposure.”
Moulding further added: “Following the completion of the FCA listing regime review, we are taking the appropriate steps to transfer to the ESCC category. We welcome the output to simplify the listing regime, and expect the Group to be eligible for inclusion in the FTSE UK Index Series.
Finally, after extensive discussions with shareholders over the past 12 months, THG is progressing options to demerge THG Ingenuity, leaving our highly profitable and cash-generative global Beauty and Nutrition businesses within THG PLC. The appropriate tax clearances have been received, while the necessary separation work has previously been undertaken.”
This announcement indicates THG’s strategic direction as it seeks to streamline its operations and potentially bolster its position within the FTSE UK Index Series. While the timelines remain uncertain, the steps being taken highlight THG’s commitment to its strategic priorities and shareholder discussions.