REG - Kelso Group Holdings - Investment in THG Plc Update

Kelso groupAnnouncement

14/09/2023 16:30

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RNS Number : 5063M  Kelso Group Holdings PLC  14 September 2023

Kelso Group Holdings Plc ("Kelso" or the "Company")

Investment in THG Plc ("THG") Update

 

Kelso, the main market listed investment company, updates its shareholders on
its investment in THG Plc ("THG"). Kelso notes today THG's interim results for
the half-year ended 30 June 2023 ("Interim"), which remains Kelso's main
investment.

We are generally pleased with the operational and financial performance of
THG, however, the lack of strategic update is disappointing. There is no
mention of plans for the medium-term structure of the business or regarding
the move to the Premium Segment of the London Stock Exchange. These matters
are important to shareholders; we think that today's material share price fall
is due to the lack of clarity on these plans. Several comments were made in
the Q&A meeting this morning around the potential future structure of the
business which we believe would have been beneficial to be included in the
Interim results.

It was pleasing to see full year expectations reiterated at c. £120m. For the
period, EBITDA was slightly above market expectations at £50.1m, driven by a
strong performance in THG Nutrition of c.£47m, an increase of 72% year on
year. In our view, THG Nutrition will continue to perform strongly in H2 and
whilst performance in THG Beauty declined year on year, it is encouraging to
note that it has returned to growth at the start of the second half.

Kelso believes the true value of the group will only be realised when THG
Nutrition is divested, albeit supported by Ingenuity, whether majority owned
by THG or not. We have said before that we believe THG Nutrition has a value
significantly more than the current market capitalisation, and plays strongly
into the global trend for large snack companies to diversify into healthier
products. Given the significant recovery in THG Nutrition this year, we
believe that now is the time to be exploring the strategic options around this
business.

Shareholders would appreciate an update regarding the potential move to the
Premium Segment. Most UK active fund managers and index funds are benchmarked
or indexed against the Premium Segment and so do not consider shares listed on
the Standard List, as THG currently is.  Moving to the Premium Segment would
force these funds to consider THG.  As a result, we believe that THG should
embrace the UK stock market and move as quickly as possible to the Premium
Segment, regardless of future potential changes that may be brought by the UK
Listing Authority.

 

For further information please contact:

 Kelso Group Holdings plc                      +44 (0) 75 4033 3933
 John Goold, Chief Executive Officer

 Mark Kirkland, Chief Financial Officer

 Jamie Brooke, Chief Investment Officer
 Zeus (Broker)                                 +44 (0) 20 3829 5000
 Nick Cowles, Ed Beddows (Investment Banking)

 Ben Robertson (Corporate Broking)

 

About Kelso:

Kelso was established in November 2022 to identify, engage and unlock trapped
value in UK listed companies. Through active engagement and alignment with
other stakeholders, Kelso aims to effect change where existing shareholders
are often unable or unwilling to do so themselves. Kelso is run by John Goold
(CEO), Mark Kirkland (CFO and Strategy) and Jamie Brooke (CIO) each of which
have over 25 years of experience in the quoted and unquoted UK small and
mid-cap market.

 

 

 

 

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