THG has successfully raised £95.4 million, surpassing its original target, to facilitate the spin-off of its tech division, Ingenuity.
- CEO Matthew Moulding contributed £10 million to the oversubscribed fundraise, reflecting strong internal and external investor confidence.
- Existing shareholders, including Frasers Group, which invested £10 million, played a crucial role in the equity raise.
- The move to demerge Ingenuity aims to streamline THG’s business model, enhancing its cash generation and financial profile.
- THG’s latest trading statement indicates robust growth in its Beauty and Ingenuity divisions, despite a slight decline in Nutrition.
THG, in a strategic financial manoeuvre, has raised £95.4 million to fund the separation of its technology division, Ingenuity. This capital injection exceeded the company’s initial target of £75 million, highlighting strong investor confidence. Notably, CEO Matthew Moulding personally invested £10 million, underpinning leadership commitment to the company’s strategic realignment.
The fundraising initiative attracted the support of existing shareholders like Frasers Group, which committed an additional £10 million as part of its strategic investment. This commitment aligns with a broader multi-year partnership that includes integrating Frasers Plus, a credit and loyalty platform, into THG’s ecosystem and expanding Myprotein products into Sports Direct stores.
By demerging Ingenuity, THG intends to simplify its organisational structure, allowing the main group to focus as a cash-generative entity within the global beauty and nutrition sectors. The restructuring aims to enhance THG’s balance sheet, as well as its capital expenditure and cash flow profiles, promising a more streamlined and efficient operation.
The decision to make Ingenuity a private company while keeping THG PLC publicly listed was taken to facilitate focused operational efficiency and growth. In a recent trading update, THG reported a 2.3% increase in its Beauty division and a 15% rise in Ingenuity, year-on-year. However, it acknowledged a 13.1% decline in its Nutrition division revenues, though noted recovery signs from July onwards.
Matthew Moulding expressed satisfaction with the positive performance in the Beauty and Ingenuity sectors, noting the operational overhauls undertaken over previous years. He highlighted the company’s sustainability achievements, being recognised among the top 250 companies globally for its efforts towards net-zero goals. Furthermore, Moulding indicated that preparations for the peak trading period are well advanced, with operational efficiencies benefiting Ingenuity clients in customer acquisition efforts.
THG’s strategic financial decisions and operational realignments indicate a forward-thinking approach to enhancing its market position and financial health.