REG - THG PLC - FY 2024 results and Q1 trading statement
Tue 07:00
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RNS Number : 5243G THG PLC 29 April 2025
29 April 2025
THG PLC
Preliminary FY 2024 results and first quarter trading statement
A transformative year, marked by further strategic progress and operational
resilience and balance sheet deleveraging
Key headlines:
· FY 2024 pre-demerger revenue £1,880.2m (+1.1% YoY)
· FY 2024 adjusted EBITDA in-line with guidance and consensus
· Group continuing Q1 2025 revenue of £371.4m (-6.1% CCY),
like-for-like revenue c.-3%. A return to growth in THG Nutrition supporting
full year guidance
· THG Ingenuity demerger completed, FTSE 250 index constituent,
long term capital structure refinanced to December 2029
· FY 2025 guidance unchanged
THG PLC ("THG" or the "Group"), announces its preliminary results for the
financial year ended 31 December 2024 ("FY 2024") and first quarter trading
statement for the period ended 31 March 2025 ("Q1 2025").
Q1 2025 Group trading performance
£m Q1 CCY([ 1 (#_ftn1) ]) YoY([ 2 (#_ftn2) ])
2025 change Change
THG Beauty 223.6 -9.8% -10.0%
THG Nutrition 147.8 +0.1% -2.0%
Group (continuing) revenue 371.4 -6.1%([ 3 (#_ftn3) ]) -7.0%
Discontinued revenue 4.2 -79.9% -79.9%
Total revenue 375.6 -8.0% -10.6%
Matthew Moulding, CEO of THG commented:
"2024 was a big year of change and evolution for THG, the highlight of which
was the demerger of the Group's technology division, THG Ingenuity at the end
of the year. Following on from the demerger, we immediately undertook the
early refinancing of the Group's debt, reducing gearing and putting in place
long-term facilities to the end of 2029, alongside entering the FTSE 250.
"We are now fully focused on THG Beauty and THG Nutrition, and I'm incredibly
proud of the progress each business has made. Following extensive efficiency
drives, incorporating both automation and AI, THG has become a much leaner,
fitter Group that has shown strong resilience in the face of record whey
commodity pricing that placed temporary pressure on Nutrition margins. A
strong performance across our Beauty business, delivering ahead of its
medium-term adjusted EBITDA margin target, helped the Group to deliver a
pre-demerger adjusted EBITDA margin ahead of 2023 despite the transitory
headwinds in Nutrition.
"Both our businesses have undertaken extensive model changes over the past 24
months. Beauty has focused on more profitable markets and building loyalty
schemes, while Myprotein has pressed ahead in undertaking a successful
rebrand, underpinning rapid growth across global offline retail and licensing.
"In the first quarter of this year, THG Beauty was up against a comparative
period including an early Easter which is a key trading event, and an extra
day's trading. However, in its home UK and US markets, Beauty retail is
trading resiliently, with a strong selection of new brand launches planned
throughout the year. It's also been especially pleasing to see Nutrition
momentum improving throughout the quarter with February and March back in
growth.
"With a capex light and efficient cost base, we are well positioned to return
to sustainable growth and cash generation, whilst developing market share."
FY 2024 Group trading performance
£m FY FY YoY Growth CCY Change
2024 2023
THG Beauty 1,108.5 1,073.3 +3.3% +4.6%
THG Nutrition 579.8 657.9 -11.9% -8.7%
Post-demerger revenue 1,688.3 1,731.2 -2.5% -0.4%
THG Ingenuity (external) 191.9 165.5 +16.0% +16.4%
Pre-demerger revenue 1,880.2 1,896.7 -0.9% +1.1%
Discontinued categories revenue 63.1 148.6 -57.5% -56.8%
Total revenue 1,943.3 2,045.4 -5.0% -3.1%
Post-demerger adjusted EBITDA([ 4 (#_ftn4) ]) 92.1 111.3 -17.2%
Post-demerger adjusted EBITDA % 5.5% 6.4% -90bps
Adjusted EBITDA - THG Ingenuity 31.0 11.0 +182.4%
Pre-demerger adjusted EBITDA([ 5 (#_ftn5) ]) 123.1 122.3 +0.7%
Pre-demerger adjusted EBITDA % 6.5% 6.4% +10bps
Adjusted EBITDA from discontinued categories (8.7) (8.2) -6.9%
Adjusted EBITDA 114.4 114.1 +0.3%
Adjusted EBITDA % 5.9% 5.6% 30bps
Adjusted items - cash 24.6 10.4 -136.5%
Adjusted items - non-cash 99.9 21.2 -371.2%
Operating loss (147.9) (39.2) -277.3%
Net debt (215.3)([ 6 (#_ftn6) ]) (218.2)
All comparative figures are continuing CCY unless otherwise
stated, all numbers and tables subject to rounding. Post-demerger and
pre-demerger definitions are included within the Chief Financial Officer's
Review.
FY 2025 outlook and guidance
· Following the completion of the demerger of THG Ingenuity, THG is
a global, cash generative, health and wellness consumer brands group
comprising THG Beauty and THG Nutrition.
· We maintain our Group revenue growth expectations of mid-single
digit for the year, given continued confidence in underlying trading and
prestige beauty demand across our home markets.
· THG Nutrition sales are back in growth in Q1 2025 underpinned by
February and March performance. Offline through retail and licensing is
delivering another very strong performance, building upon the excellent prior
year in this channel. Furthermore, the online channel continues to be
encouraging, with a return to growth in UK customers (+5%), and average
selling prices ("ASPs") recovering to pre-rebrand levels.
· The development and success of the omnichannel strategy has placed
record numbers of Myprotein products in customers hands during the quarter,
delivering wider brand awareness with Myprotein the most 'top-of-mind' sports
nutrition brand (YouGov) in the UK([ 7 (#_ftn7) ]). Notably, the offline
product ranges have a much-reduced exposure to whey, supporting revenue and
margin opportunities.
· As anticipated, new global volumes of high-concentrate whey protein
entered the market during the first quarter, supporting a more normalised
commodity market outlook. A positive impact to margins is expected in H2 2025
and beyond.
· We continue to monitor the changes to US trade policy and
reciprocal actions. Whilst our exposure to tariffs across the Group is
expected to be less than £1.0m pre mitigating actions, market uncertainty and
the impact on consumer demand factors may influence the second half of the
year.
· The impact of national insurance and minimum wage increases will be
offset by in-year savings and further opportunities for operational
efficiencies presented by the demerger.
· As previously indicated, capital expenditure will reduce to
c.£20m p.a., with cash lease payments reducing to c.£22m pa. Cash adjusting
items will be temporarily elevated at c.£15m incorporating costs relating to
the demerger.
· Over the medium term, revenue growth of mid to high-single digit is
anticipated, with Group adjusted EBITDA margins progressing to historical
levels of c.9.0%.
FY 2024 segmental summary
£m THG THG Nutrition Central Post-demerger
Beauty
Total revenue 1,108.5 579.8 - 1,688.3
Adjusted EBITDA 79.8 34.5 (22.2) 92.1
Adjusted EBITDA margin 7.2% 6.0% - 5.5%
FY 2023 segmental summary
£m THG THG Nutrition Central Post-demerger
Beauty
Total revenue 1,073.3 657.9 - 1,731.2
Adjusted EBITDA 44.1 88.9 (21.8) 111.3
Adjusted EBITDA margin 4.1% 13.5% - 6.4%
FY 2024 financial highlights
· Post-demerger Group revenue of £1,688.3m([ 8 (#_ftn8) ]),
representing a reduction of 0.4%. The result was driven by a strong revenue
performance within THG Beauty of +4.6%, offsetting a decrease in THG Nutrition
of -8.7%. The decrease in THG Nutrition was primarily due to a one-off
reduction in ASPs, driven by elevated online promotional activity to clear
legacy branded stock during the rebrand.
· THG Beauty
o THG Beauty delivered on strategy with revenue growth in home markets (UK
and US) and margin accretion which contributed to a 310bps improvement in
adjusted EBITDA margin to 7.2%, an over achievement of our medium-term EBITDA
guidance of >.6.0%.
o Following a further strategic review in the year to exit loss making
discontinued categories, within own brand beauty, the decision was also taken
to withdraw from cosmetics and masstige to focus on growth opportunities in
prestige skincare, spa and specialist products. Subsequently, THG Beauty saw a
strong retail and own brand performance throughout the year with the strategic
pivot towards higher-margin sales now complete.
· THG Nutrition
o THG Nutrition has effectively expanded its omnichannel approach,
leveraging reach from its rebrand to target both online and offline channels,
enabling more customers to buy Myprotein products than ever before.
o Revenue decline was driven by online only, with offline B2B retail and
licensing growth key to growing the total customer base with products
available in over 20,000 retail stores globally.
o Through the rebrand and the omnichannel strategy, Myprotein now addresses
a much wider consumer audience than ever before, including across the
food-to-go (convenience), dairy, frozen food, caffeine and baked goods
sectors, through both its own product and licensing partners such as Müller,
Iceland, Jimmy's Coffee and Bakeaway. Category leading brands partner uniquely
with Myprotein due to its global reach.
o Challenges in the Asia market relating to FX movements continued to weigh
on trading performance. To defend margins, promotional activity was reduced
whilst currency movements and high commodity prices stabilise. Growth
excluding Asia on a 3 year basis was resilient at +17.4%.
o Adjusted EBITDA margin decreased to 6.0% (FY 2023: 13.5%) principally as a
result of the challenging sales performance, compounded by FX and the record
high input whey prices.
· Adjusted distribution costs as a percentage of revenue continued to
decrease to 12.8% (-150bps) driven by basket economics and territory mix
(higher UK participation), warehouse operational efficiencies and an increase
in offline revenues.
· Increased administrative costs as a percentage of revenue reflects
the investment in marketing throughout the year offsetting a managed reduction
in salary and overhead costs. The Group continues to develop and deploy
learnings from an evolved marketing measurement framework including media mix
modelling and brand tracking, which focuses on the short and long term effects
of pricing, promotion and marketing investment. This strategy is enabling the
Group to balance investment with our longer term goals of sustainable revenue
and active customer growth, alongside brand awareness.
· The Group recorded an adjusted EBITDA of £92.1m (FY 2023: £111.3m),
or £123.1m on a continuing basis pre the demerger of THG Ingenuity (FY 2023:
£122.3m) with margins of 5.5% and 6.5% respectively.
· Group operating loss of £147.9m (FY 2023: £39.2m), including the
impact of non-cash adjusting items totalling £99.9m (FY 2023: £21.2m). These
items are one-off, non-cash in nature with losses on disposal of discontinued
categories including impairment of associated assets and onerous contracts.
· Post-demerger capital expenditure was £21.1m (pre-demerger
£101.3m) and finance cost and lease repayments were £57.4m (pre-demerger
£83.2m) leading to neutral free cash generation (£0.4m).
· With the support of our banking partners, in March 2025 we secured
long-term debt facilities including a €445m Term Loan B and £150m undrawn
RCF until December 2029 and May 2029 respectively.
Q1 2025 Group trading performance
· Continuing revenue of £371.4m (-6.1%) with challenging comps in THG
Beauty and a return to growth in THG Nutrition. The impact of an extra days
trading in the prior period, Easter timing and territory pullback in THG
Beauty had an approximate impact of c.300bps on Group YoY performance.
· The Group continues to focus on improving the quality rather than
absolute number of its active customers, and has tailored its investment
towards a more efficient blend of brand, digital and social marketing with
positive earlier indicators on lifetime value and brand perception. Further
increasing app participation is a critical part of this strategy to improve
the profitability and sustainability of the customer base. Q1 2025 online
revenue participation from apps increased to 34% (Q1 2024: 24%).
· Following the transfer to the equity shares (commercial companies)
category in January 2025, THG PLC was admitted to the FTSE 250 index in March
as part of the FTSE Russell quarterly review.
THG Beauty Q1 2025 highlights
· On a 2 year basis THG Beauty growth was +2.7%, increasing by a
further c.360bps on an adjusted basis when factoring in the impact of
de-prioritised European and Asian territories, which materially reduced
revenue and active customers.
· Exit momentum is stronger with UK retail showing month-on-month
improvement. Key home markets (UK and US) now account for c.82% (Q1 2024:
c.79%) of online beauty retail revenue. We continue to monitor the indirect
impact of tariffs on US consumers.
· Retail performance has also been impacted by weaker trading across
the industry of several hugely popular 'trending brands'. We continue to
refresh the brand curation with new launches including Beauty of Joseon, Fenty
Beauty and Dr Barbara Sturm.
· The Lookfantastic UK loyalty programme (LF Beauty+) grew further (now
over 3.0m members), with loyalty customers typically purchasing more
frequently, with an overall higher spend per account (c.+34% vs non-loyalty in
Q1 2025). Loyalty and customer retention is further supported by a refined
Premier Delivery service to encourage spend per account growth.
· Average order values and conversion rates via Apps continue to
increase (vs other channels). There remains significant opportunities to
enhance spend and acquire new customers through improved functionality to
deliver a highly personalised experience.
THG Nutrition Q1 2025 highlights
· Encouraging start to the year, with month-on-month sales
improvement throughout the quarter. The recovery in ASPs to pre rebrand levels
has been achieved whilst supporting a competitive and sustainable pricing
structure.
· Momentum demonstrated in categories outside of the core protein
range, especially in activewear, vitamins, bars and snacks. Myvitamins.com
delivered a record quarter of growth for 3 years at +59.2%. Myvitamins
customer demographics differ vastly to those of Myprotein with c.79% female,
c.68% over the age of 34, and a larger proportion holding Lookfantastic
accounts.
· Global active customers stable with the year-end (LTM 6.1m), with
UK new customers in growth (+5%).
· Japan remains an important region for the business nonetheless our
ability to trade to target levels of revenue and profitability have been
constrained in recent years by the FX impact on price competitiveness and
margins. Our strategy to market is being refined to higher-margin channels and
products, which whilst impacting growth in the near-term, should have a more
meaningful contribution to margin recovery.
· Strong intake in US retail orders with additional listings secured
with regional and national speciality retailers including GNC and Vitamin
Shoppe. Total US doors presence expected to exceed 6,000 by year end.
· New partnership agreement established in South Korea with SG Safety
Corporation, a subsidiary of leading Korean conglomerate CJ Group, as part of
a broader, multi-faceted deal. The partnership enables category coverage
across both offline and new online channels and will extend Myprotein into
fast moving categories such as convenience, RTD, and meal replacements.
Analyst and investor conference call
THG will today host a conference call and webcast for analysts and investors
at 9.00am (UK time) via the following links:
To register for the webcast, please use the below link:
https://stream.brrmedia.co.uk/broadcast/6807b882c26db800122270e6
(https://stream.brrmedia.co.uk/broadcast/6807b882c26db800122270e6)
To ask questions, you must dial in via conference line using the below
details:
· UK dial in: +44 (0) 33 0551 0200
· Password: THG - FY Results
Enquiries to:
Investor enquiries - THG PLC
Kate Grimoldby, Director of Investor Relations and Strategic Projects Investor.Relations@thg.com (mailto:Investor.Relations@thg.com)
Media enquiries:
Sodali & Co - Financial PR adviser Tel: +44 (0) 20 7250 1446
Victoria Palmer-Moore / Russ Lynch thg@sodali.com (mailto:thg@powerscourt-group.com)
THG PLC media-enquiries@thg.com
Notes to editors
THG PLC is a global e-commerce group headquartered in Manchester, UK,
operating through two leading consumer businesses: THG Beauty and THG
Nutrition.
THG Beauty operates prominent online platforms including Lookfantastic,
Dermstore and Cult Beauty, offering a valued route to market for over 1,300
third-party brands, alongside a specialist portfolio of owned brands.
THG Nutrition, led by Myprotein, the world's largest online sports nutrition
brand, spans multiple health and wellness categories, delivering its products
both directly to consumers and through strategic offline partnerships
worldwide.
Cautionary Statement
Certain statements included within this announcement may constitute
"forward-looking statements" in respect of the group's operations,
performance, prospects and/or financial condition. Forward-looking statements
are sometimes, but not always, identified by their use of a date in the future
or such words and words of similar meaning as "anticipates", "aims", "due",
"could", "may", "will", "should", "expects", "believes", "intends", "plans",
"potential", "targets", "goal" or "estimates". By their nature,
forward-looking statements involve a number of risks, uncertainties and
assumptions and actual results or events may differ materially from those
expressed or implied by those statements. Accordingly, no assurance can be
given that any particular expectation will be met and reliance should not be
placed on any forward-looking statement. Additionally, forward-looking
statements regarding past trends or activities should not be taken as a
representation that such trends or activities will continue in the future. No
responsibility or obligation is accepted to update or revise any
forward-looking statement resulting from new information, future events or
otherwise. Nothing in this announcement should be construed as a profit
forecast. This announcement does not constitute or form part of any offer or
invitation to sell, or any solicitation of any offer to purchase any shares or
other securities in the Company, nor shall it or any part of it or the fact of
its distribution form the basis of, or be relied on in connection with, any
contract or commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding the shares or other securities of the
Company. Past performance cannot be relied upon as a guide to future
performance and persons needing advice should consult an independent financial
adviser. Statements in this announcement reflect the knowledge and information
available at the time of its preparation.
Appendix
Quarterly results
£m Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2024 Q1 2025
THG Beauty 222.1 254.0 244.1 353.1 1,073.3 248.4 261.3 250.1 348.6 1,108.5 223.6
THG Nutrition 165.7 171.0 154.8 166.4 657.9 150.8 149.0 134.5 145.4 579.8 147.8
Post-demerger revenue 387.8 425.0 398.9 519.5 1,731.2 399.2 410.4 384.6 494.1 1,688.3 371.4
THG Ingenuity (external) 38.2 38.5 41.0 47.8 165.5 39.7 46.2 47.1 58.9 191.9 -
Pre-demerger revenue 426.0 463.5 440.0 567.3 1,896.7 438.9 456.6 431.7 552.9 1,880.2 -
Discontinued revenue 43.4 36.4 27.2 41.7 148.6 21.0 17.5 11.1 13.5 63.1 4.2
Total revenue 469.4 499.9 467.2 609.0 2,045.4 459.9 474.0 442.8 566.4 1,943.3 375.6
THG Ingenuity (internal) 122.3 126.5 117.4 153.6 519.9 112.6 113.0 98.9 138.3 462.9 -
THG Ingenuity (total) 160.5 165.0 158.5 201.4 685.4 152.3 159.2 146.0 197.3 654.8 -
Quarterly results CCY growth
£m Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2024 Q1 2025
THG Beauty -14.3% -9.6% +0.0% +2.0% -5.1% +13.6% +3.5% +3.2% +0.8% +4.6% -9.8%
THG Nutrition +3.8% +2.0% -1.4% -4.0% +0.0% -5.8% -9.2% -10.5% -9.5% -8.7% +0.1%
Post-demerger revenue -7.4% -5.3% -0.6% +0.0% -3.2% +5.4% -1.5% -2.1% -2.5% -0.4% -6.1%
THG Ingenuity (external) -10.9% -7.8% -1.0% +9.3% -2.5% +5.8% +21.0% +15.2% +22.0% +16.4% -
Pre-demerger revenue -7.8% -5.5% -0.6% +0.7% -3.2% +5.5% +0.4% -0.4% -0.4% +1.1% -
Discontinued revenue -33.1% -44.4% -56.7% -48.0% -45.6% -50.5% -51.5% -58.6% -66.9% -56.8% -79.9%
Total revenue -11.1% -10.1% -7.6% -5.4% -8.5% +0.2% -3.4% -3.9% -5.0% -3.1% -8.0%
THG Ingenuity (internal) -15.5% -17.1% -10.5% -9.0% -13.0% -8.0% -10.6% -13.5% -11.7% -11.0% -
THG Ingenuity (total) -14.4% -15.1% -8.2% -5.3% -10.7% -4.7% -3.3% -6.1% -3.8% -4.4% -
Quarterly reported growth rate
£m Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2024 Q1 2025
THG Beauty -10.1% -8.0% -1.2% +1.9% -3.9% +11.8% +2.9% +2.5% -1.3% +3.3% -10.0%
THG Nutrition +5.7% +1.8% -3.8% -6.0% -0.7% -9.0% -12.8% -13.1% -12.6% -11.9% -2.0%
Post-demerger revenue -3.9% -4.3% -2.2% -0.8% -2.7% +2.9% -3.4% -3.6% -4.9% -2.5% -7.0%
THG Ingenuity (external) -9.4% -7.6% -2.5% +7.1% -2.9% +4.1% +20.0% +14.7% +22.9% +16.0% -
Pre -demerger revenue -4.4% -4.6% -2.2% -0.2% -2.7% +3.0% -1.5% -1.9% -2.6% -0.9% -
Discontinued revenue -36.1% -47.7% -58.8% -51.4% -48.6% -51.6% -52.0% -59.0% -67.5% -57.5% -79.9%
Total revenue -8.6% -10.0% -9.5% -6.9% -8.7% -2.0% -5.2% -5.2% -7.1% -5.0% -10.6%
THG Ingenuity (internal) -15.5% -17.1% -10.5% -9.0% -13.0% -8.0% -10.6% -15.7% -10.0% -11.0% -
THG Ingenuity (total) -14.1% -15.1% -8.6% -5.7% -10.8% -5.1% -3.5% -7.9% -2.2% -4.5% -
Chief Executive Officer's Statement
As we reflect on the last year, I am incredibly proud of what we have achieved
together as an organisation. This year has been transformative, marked by
strategic milestones, operational resilience and financial progress with
revenue diversification and cash generation improvements. I want to take this
opportunity to celebrate our successes, address the challenges and share the
rationale behind key decisions we made.
· We started the year successfully integrating pre-eminent skincare
brand Biossance into our own brand Beauty portfolio. Our prestige beauty
brands are now stocked in over 4,500 stores worldwide, and are renowned for
their innovative ingredient technology and wellness expertise.
· We celebrated 20 years in business - an incredible achievement
when we reflect on our journey and how our brands have evolved. Whilst certain
pressures have abated, new challenges and areas of uncertainty have emerged.
As a business we remain on the front foot to adapt to preserve our financial
health and take advantage of new growth opportunities.
· Throughout 2024, we delivered robust financial discipline, with
our focus on operating efficiencies and investing in markets where we have a
right to win driving these outcomes. We delivered a consistent Adjusted EBITDA
year on year despite the challenging economic conditions.
· Our strategy to simplify and streamline operations led to the sale
of our luxury goods websites, and certain beauty own brands. Our resources
within THG Beauty are now prioritised on those categories and markets which
provide us with more optimal returns aligned to our financial priorities,
demonstrated by the Adjusted EBITDA margin for the year being ahead of our
medium-term target.
· It was a transitional year for THG Nutrition, characterised by a
period of strategic realignment and investment. Whilst this inevitably
resulted in challenges as we contested with rising costs, Myprotein is now
positioned as a leader in quality and value across multiple health and
wellness categories. A long-term partnership with dairy category leader
Müller is testament to the profile of brands we are now standing alongside.
· At the start of the year our group was made up of three leading
businesses and collectively we took the decision to demerge THG Ingenuity
after substantial stakeholder engagement.
· Following the completion of the FCA listing regime review, we took
the appropriate steps to transfer to the ESCC category. We welcomed the output
to simplify the listing regime, and entered the FTSE 250 index in March 2025.
· Our final milestone was to secure a long-term capital structure
relevant for the business size and growth profile. We have materially reduced
gross debt whilst retaining suitable liquidity to continue investing in our
brands to support their growth potential.
THG Beauty: Target Adjusted EBITDA margin achieved
Within our Beauty business the strategy of focusing on higher margin sales and
reducing order volumes that do not deliver target profitability continued,
driving exceptional Adjusted EBITDA margin progress. This performance
underscores our leadership position in the market and commitment to
progressing stakeholder value, including with our brand partners.
THG Nutrition: A transitional year, omnichannel paving the way forward
2024 marked a transitional year for THG Nutrition characterised by the
rebrand. More consumers globally are now buying Myprotein products than ever
before, following the temporary reduction in online customers during the year.
This success has been underpinned by the retail sales value growth through
offline retail and licensing revenues.
Whilst the business reported a decline in total revenue, this was largely
driven by the clearance of old brand product online at lower price points. We
are pleased to see it progressing back into growth in 2025, supported by new
product launches and strengthened customer engagement both online and across
multiple retail locations. This resurgence highlights the strength of our
diversified portfolio and our ability to adapt and innovate in response to
evolving consumer demands.
Strategic partnerships
Partnerships have played a key role in our success this year. By collaborating
with industry leaders and innovative organisations, we have enhanced our
capabilities and expanded our reach. These alliances have enabled us to access
new markets, accelerate product development and strengthen our value
proposition across key sectors. Strategic licensing partnerships underline the
reach of the Myprotein brand, and highlight the growth opportunities in
licensed brand extensions. As we look ahead, we remain committed to fostering
these relationships and building new ones that will further our brand and
create long-term value.
The demerger of THG Ingenuity
This year also saw the pivotal decision to demerge THG Ingenuity. This step
represents a significant milestone in our journey to enhance focus, improve
cash generation and unlock value. By establishing THG Ingenuity as an
independent entity, we have enabled it to pursue its growth ambitions with
greater agility. At the same time, this allows us to dedicate our resources to
our core business areas. The demerger reflects our commitment to delivering
operational excellence, streamlining our priorities and creating greater
transparency for stakeholders. We are confident this move will drive long-term
success for both THG Ingenuity and the Group.
Overcoming challenges
While challenges, including the rebrand transition, commodity pricing and
consumer spend pressures, tested our resilience, our team's ability to adapt
and respond effectively has been instrumental in sustaining our progress.
These efforts have further strengthened our financial foundation, underpinned
by high quality repeat revenues and channel diversification.
Looking ahead
As we enter the second quarter we are excited and thoughtful about the road
ahead. Our strategic priorities remain clear: to drive sustainable, profitable
growth, deepen customer relationships, and lead with innovation. The beauty
and nutrition businesses will remain central to our strategy, as we continue
to build on their strong performance and potential. We are also committed to
supporting Ingenuity through leveraging its market‑leading services as it
embarks on its independent journey. This partnership gives our brands and
customers a best‑in-class ecommerce experience, with value and advancing
performance at the core.
In closing, I want to extend my thanks to our employees, whose dedication and
passion are the driving forces behind our achievements. I'm impressed by the
Group's agility and resilience during a year of significant change, and I
would like to thank everyone involved at THG for their immense efforts during
a transformative year for the business.
Chief Financial Officer's Review
Overview of FY 2024 result
A keen focus on cash management against the backdrop of a challenging economic
environment, with the completion of the demerger of THG Ingenuity further
accelerating gross deleveraging.
THG Beauty delivered on strategy with growth in core markets and Adjusted
EBITDA margins above medium-term guidance driven by the focus on more
profitable sales.
Reduction in revenue following completion of portfolio management within THG
Beauty to exit loss‑making discontinued categories driven by the focus
on cash.
THG Nutrition had a challenging online performance alongside record high whey
prices impacting the FY 2024 result. Following the major global rebrand,
decisive action was taken to reposition THG Nutrition for a return to
sustainable revenue growth and margin recovery.
£550m of cash and available facilities at year end (ahead of demerger - with
£89.0m of cash leaving the Group with THG Ingenuity), providing excellent
liquidity and setting a solid foundation for THG's future as a cash-generative
consumer brands Group.
Post year end, successful completion of debt refinancing to 2029.
Total Group overview 9 (#_ftn9)
2024(1) THG THG Post THG Inter-group Pre Discontinued Total
Beauty Nutrition demerger Ingenuity(2) elimination demerger categories FY 2023
£m Central
External revenue 1,108.5 579.8 - 1,688.3 191.9 - 1,880.2 63.1 1,943.3
Internal revenue - - - - 462.9 (462.9) - - -
Total revenue 1,108.5 579.8 - 1,688.3 654.8 (462.9) 1,880.2 63.1 1,943.3
Adjusted EBITDA 79.8 34.5 (22.2) 92.1 31.0 - 123.1 (8.7) 114.4
Margin 7.2% 6.0% - 5.5% 4.7% - 6.5% (13.8%) 5.9%
2023 THG THG Post THG Inter-group Pre Discontinued Total
Beauty Nutrition demerger Ingenuity elimination demerger categories FY 2023
£m Central
External revenue 1,073.3 657.9 - 1,731.2 165.5 - 1,896.7 148.6 2,045.4
Internal revenue - - - - 519.9 (519.9) - - -
Total revenue 1,073.3 657.9 - 1,731.2 685.4 - 1,896.7 148.6 2,045.4
Adjusted EBITDA 44.1 88.9 (21.8) 111.3 11.0 - 122.3 (8.2) 114.1
Margin 4.1% 13.5% - 6.4% 1.6% - 6.4% (5.5%) 5.6%
1. This report includes a number of non-GAAP measures and alternative
performance measures. Adjusted results are consistent with how business
performance is measured internally and presented to aid comparability of
performance. See more information within the glossary and reconciliations to
statutory measures within this report.
2. Following the completion of the demerger, we have concluded that THG
Ingenuity meets the criteria of being classified as a discontinued operation
(IFRS 5: Non-current Assets Held for Sale and Discontinued Operations). See
note 9 for more information. FY 2023 has been restated to reflect certain
leased assets and operational activities of THG Experience within THG
Ingenuity which had previously been reported within THG Beauty.
Reconciliation to statutory revenue
2024 2023
£m £m
THG Beauty 1,108.5 1,073.3
THG Nutrition 579.8 657.9
Post-demerger revenue 1,688.3 1,731.2
THG Ingenuity (external) 191.9 165.5
Pre-demerger revenue 1,880.2 1,896.7
Discontinued categories 63.1 148.6
THG Ingenuity (external) - classified as discontinued operations for statutory (191.9) (165.5)
presentation
Statutory continuing revenue 1,751.4 1,879.9
The demerger completed on 2 January 2025. Therefore, the results of THG PLC
for FY 2024 include THG Beauty, THG Nutrition and THG Ingenuity, reflecting
performance prior to the demerger.
The segmental reporting and categories in this report (and the table above)
are summarised as follows:
Post-demerger - this represents the streamlined Group moving forward,
comprising THG Beauty and THG Nutrition, net of central costs and excluding
THG Ingenuity and discontinued categories, and will constitute the underlying
results of THG PLC reported from FY 2025.
Pre-demerger - includes THG Beauty, THG Nutrition and THG Ingenuity as have
previously been reported in prior years (excluding discontinued categories);
following the completion of the demerger, THG Ingenuity is now a private
company and its results will not be reported within the results of THG PLC
after FY 2024.
Discontinued categories - as part of our focus on continually improving the
business and responding to the economic backdrop, several non‑core brands
and product offerings identified as loss-making or non-cash generative were
exited across FY 2023 and FY 2024 improving the margin potential of the
business. These categories have been removed from the post-demerger and
pre‑demerger result as an adjusted performance measure to provide a
comparable basis going forwards.
Headlines
· Post-demerger Group revenue of £1,688.3m (2023: £1,731.2m) and
Adjusted EBITDA of £92.1m (2023: £111.3m) with a margin of 5.5% (2023:
6.4%). Revenue reduction of 2.5% driven by a revenue performance within THG
Beauty of +3.3%, offset by a decrease in THG Nutrition of -11.9%. Significant
310bps improvement in THG Beauty margin reflecting the continued
prioritisation of more profitable sales and exiting loss-making and low-margin
territories and brands, partially offsetting the challenging trading
environment for THG Nutrition, most notably the record high whey prices.
· Pre-demerger Group revenue of £1,880.2m (2023: £1,896.7m) and
Adjusted EBITDA of £123.1m (2023: £122.3m) with a margin of 6.5% (2023:
6.4%) with both metrics remaining broadly stable.
· THG Beauty result driven by strong performance driven by the UK (with
53% of revenue generated outside of the UK). THG Nutrition by contrast
experienced a more challenging year, primarily as a result of weaker online
sales, a result of the rebrand and lower than expected Asia performance.
· Operating loss of £147.9m (2023: £39.2m) increased due to the
combination of the weaker performance in THG Nutrition combined with increased
costs recognised within adjusting items in the year. These costs primarily
relate to the decision made to exit loss‑making categories which led to
one-off costs for impairment of related assets and an inventory provision and
the clearance of old brand stock following the rebrand within THG Nutrition.
THG Beauty
Standout adjusted EBITDA performance from THG Beauty
Revenue increased by +3.3% to £1,108.5m (2023: £1,073.3m) driven by retail
and own brand performance. Revenue increased in core territories of the UK and
US, offset by strategic reductions in sales across Europe and Asia to ensure a
focus on higher‑margin customers.
Drivers were skincare, cosmetics and fragrance, with fragrance proving in high
demand throughout the year.
Adjusted EBITDA delivered of £79.8m (2023: £44.1m). Adjusted EBITDA margin
of 7.2% (2023: 4.1%) has almost doubled YoY following a return to revenue
growth, the positive impact of the strategy to focus on higher-margin sales
and the normalisation of manufacturing profitability.
THG Nutrition
Continued evolution of strategy following a challenging year
THG Nutrition reported revenue of £579.8m (2023: 657.9m) being a -11.9%
decrease. Whilst the business reported a revenue decline, this has been
primarily driven by the one-time average selling price reduction of 11.0% due
to clearance on old brand product online. Good momentum is being seen in
categories outside of core protein powders, especially in activewear,
vitamins, and bars and snacks alongside the offline market.
Adjusted EBITDA margin of 6.0% (2023: 13.5%) was principally as a result of
the challenging sales performance, heavily influenced by the record high input
whey prices, persistent weakness of the Japanese Yen and increased promotional
activity to clear old brand stock following the rebrand. The strategy
continues to evolve with continued growth in our offline business comprising
manufacturing, retail and licensing, enabled by the rebrand.
Central costs
Central costs relate primarily to the PLC Board remuneration, insurance,
professional services fees, Group finance, M&A and governance costs that
are not recharged to the businesses as they principally relate to the
operations of the PLC holding company. The costs remained largely consistent
with FY 2023.
Geographical review of revenue
The following table provides an analysis of revenue by region (by customer
location):
2024 2023
£'000 £'000
Movement
UK 795.1 773.1 +2.8%
USA 336.6 306.3 +9.9%
Europe 357.9 377.0 -5.1%
Rest of the world 198.7 274.8 -27.7%
Post-demerger revenue 1,688.3 1,731.2
The UK continues to be the largest market for the Group with 47.1% (2023:
44.7%) of revenue generated within the UK. The UK is the biggest market for
the Group in both THG Beauty and THG Nutrition.
The USA is a growing market for the Group with 19.9% of revenue (2023: 17.7%).
Dermstore is our primary beauty fascia in the US and sells over £170m
annually, whilst roughly half of THG Beauty manufacturing sales are generated
in the US from our New Jersey labs facility.
Europe and the rest of the world both saw sales decline year on year in 2024
driven by both the prioritisation of higher margin sales in THG Beauty which
lead to a conscious pull back on some sales activity in Europe and Asia, and
the exchange rate on the Japanese Yen which adversely impacted on our ability
to compete in THG Nutrition in Japan, which is one of Myprotein's biggest
markets.
Discontinued
Discontinued operations - THG Ingenuity
Total revenue of £654.8m (2023: £685.4m), a decrease of -4.5%. This is due
to the reduction in internal revenue of 11.0%, partially offset by the
increase in external revenue of 16.0%.
The investments made across the THG Ingenuity offering over a number of years,
alongside advancing strategic priorities, have positioned THG Ingenuity for
success as a standalone private company. This, combined with the ongoing focus
on higher-value and higher-margin clients, has started to deliver,
particularly across fulfilment services. This enabled THG Ingenuity to deliver
Adjusted EBITDA of £31.0m (2023: £11.0m) with a margin of 4.7% (2023: 1.6%),
an increase of 310bps YoY.
Internal revenue of £462.9m (2023: £519.9m) relates to services provided to
the wider THG Group, including platform infrastructure and services, warehouse
fulfilment, courier services and marketing services. Internal revenue declined
due to the Group exiting loss-making categories and territories along with
lower D2C sales in THG Nutrition, which in turn has generated lower volumes
for THG Ingenuity.
Discontinued categories
During 2023, the Group announced its intention to simplify and streamline its
operations, undertaking a strategic review of loss‑making categories and
territories. Given the size and complexity of the Group, this exercise has
continued during 2024, leaving the continuing Group in a streamlined, strong
market position, driving positive cash flow.
Several small, non-core brands and product offerings were exited during FY
2024. These brands generated £63.1m of revenue (FY 2023: £148.6m) and
contributed an Adjusted EBITDA loss of £8.7m (FY 2023: £8.2m). These losses
will not continue into FY 2025.
The prior year discontinued categories have been restated to include
consistent categories disclosed in FY 2024 to provide a like‑for-like
comparison. (See note 2 within the financial statements.)
Group financial review
Statutory results
Year ended
31 December
2023
(restated)(1)
£m
Year ended
31 December
2024
£m
Continuing operations
Revenue 1,751.4 1,879.9
Cost of sales (1,057.8) (1,082.5)
Gross profit 693.6 797.4
Distribution costs (231.0) (277.3)
Administrative costs (610.5) (559.4)
Operating loss (147.9) (39.2)
Finance income 9.0 12.9
Finance costs (63.6) (65.9)
Loss before tax (202.4) (92.3)
Income tax credit/(charge) 21.9 (15.7)
Loss for the financial year from continuing operations (180.6) (108.0)
Discontinued operations
Loss for the financial year, net of tax (145.6) (140.4)
Loss for the financial year (326.1) (248.4)
1. Restated for the impact of THG Ingenuity being classified as a
discontinued operation.
Adjusted profit measures with reconciliation to statutory result
Management have presented alternative performance measures to provide
stakeholders with additional helpful information on the performance of the
business. These alternative performance measures are consistent with how the
business performance is monitored and reported through internal Management
reporting to the Board. To ensure that stakeholders can reconcile this to the
statutory information presented, the below table has been included:
Year ended 31 December 2024
Amortisation
and
depreciation
£m
Management Adjusted Discontinued Share based
adjusted view items categories payments
£m £m £m £m
Statutory
£m
Revenue 1,688.3 - - 63.1 - 1,751.4
Cost of sales (983.4) (33.6) (0.4) (40.4) - (1,057.8)
Gross profit 704.9 (33.6) (0.4) 22.7 - 693.6
Distribution costs (216.9) (1.3) (0.2) (12.6) - (231.0)
Administrative costs (395.8) (89.6) (89.6) (18.9) (16.6) (610.5)
Operating profit/(loss) 92.2 (124.5) (90.2) (8.8) (16.6) (147.9)
Year ended 31 December 2023
Amortisation
and
depreciation
£m
Management Adjusted Discontinued Share based
adjusted view items categories payments
£m £m £m £m
Statutory
£m
Revenue 1,731.3 - - 148.6 - 1,879.9
Cost of sales (975.9) (15.3) (0.5) (90.8) - (1,082.5)
Gross profit 755.4 (15.3) (0.5) 57.8 - 797.4
Distribution costs (246.7) (2.2) (0.2) (28.2) - (277.3)
Administrative costs (397.3) (14.2) (93.3) (37.9) (16.7) (559.4)
Operating profit/(loss) 111.3 (31.6) (94.0) (8.2) (16.7) (39.2)
Revenue
Group statutory continuing revenue decreased by -6.8% to £1,751.4m
(2023: £1,879.9m). This performance reflects the decrease in THG Nutrition
revenue of -11.9%, offset by a +3.3% increase in THG Beauty revenue plus
discontinued categories. Detailed analysis is included earlier in this report.
Gross profit
Adjusted gross profit was £704.9m (2023: £755.4m) equating to an adjusted
margin of 41.8% (2023: 43.6%), a reduction of 190bps compared to 2023.
The reduction YoY has been driven by the decrease in the THG Nutrition
margin, largely discounting to clear old stock following
the rebrand rollout. Within THG Nutrition, the challenging top-line
performance was compounded by higher YoY input costs, primarily whey. The
Japanese yen has been particularly challenging in 2024, peaking at 207Y/£ vs
c.181Y/£ at the same point last year, and 135Y/£ at IPO (a c.47% devaluation
since IPO in September 2020). This has all but eliminated profitability in
Myprotein's second largest market and we have had to reduce promotional
activity as a result, impacting Myprotein's competitiveness within
the region.
Gross profit has strengthened in THG Beauty through online retail sales growth
(principally Lookfantastic, Cult Beauty and Dermstore) as previous actions to
prioritise higher-margin sales and promotional strategies have come
to fruition.
Gross profit on a statutory basis totalled £693.6m (2023: £797.4m)
delivering a decreased margin of 39.6% (2023: 42.4%). In addition to the
above, the statutory position was also impacted by the increase in adjusted
items, the loss on disposal of luxury websites, an outcome of the strategic
review and inventory provisions post rebrand.
Distribution costs
Pleasingly, adjusted distribution costs of £216.9m (2023: £246.7m) equate to
12.8% (2023: 14.2%) of revenue. This significant improvement of 140bps is a
result of the exit of those operations that generated lower profits, which
were generally those sales to territories further from our distribution
network (which consequently had a higher distribution cost). Distribution
costs also benefited from improving AOVs in THG Beauty as well as a higher
beauty mix, with THG Beauty distribution costs are lower than THG Nutrition as
a percentage of sales.
Distribution costs on a statutory basis further reduced as a percentage of
sales by 160bps compared to 2023, culminating in a cost of £231.0m
(2023: £277.3m), being 13.2% (2023: 14.8%) of revenue aided by lower
adjusted items than in the prior year.
Administration costs
Adjusted administrative costs as a percentage of revenue totalled 23.4% of
revenue (2023: 22.9%). During H2 2024, the Group focused on cost
rationalisation to right-size the cost base of the business post demerger;
this resulted in reductions across administrative costs where the benefit will
annualise in FY 2025, albeit these will be offset by the national insurance
and national minimum wage changes outlined by the government in the autumn of
2024. Following the exit of the discontinued categories, further cost
reductions have also been implemented. While administrative costs reduced on
an absolute basis, driven by cost savings which more than offset inflationary
pressures, the percentage to sales increased YoY, owing to the challenging
top-line sales performance in THG Nutrition.
Administrative costs on a statutory basis totalled £610.5m (2023: £559.4m),
increasing due to the increase in adjusted items as explained later in this
report.
Adjusted EBITDA and Adjusted EBITDA margin
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Reconciliation from operating loss to Adjusted EBITDA
Operating loss (147.9) (39.2)
Adjustments for:
Amortisation 19.9 21.0
Amortisation of acquired intangibles 45.5 49.0
Depreciation 24.8 24.1
Adjusted items - cash 24.6 10.4
Adjusted items - non-cash 42.4 21.2
Adjusted items - non-cash impairment 57.5 -
Share-based payments 16.6 16.7
EBITDA from discontinued categories 8.7 8.2
Adjusted EBITDA (post-demerger) 92.1 111.4
Adjusted EBITDA (post-demerger) % 5.5% 6.4%
EBITDA from discontinued operations (THG Ingenuity) 31.0 11.0
Adjusted EBITDA (pre-demerger) 123.1 122.3
Adjusted EBITDA (pre-demerger) % 6.5% 6.4%
Depreciation and amortisation
Statutory depreciation and amortisation costs were £24.8m and £65.4m
respectively (2023: £24.1m and £70.0m). Included within amortisation is
£45.5m (2023: £49.0m) of amortisation on acquired intangibles (see below).
Depreciation remained largely consistent, reflective of the current asset
base.
Amortisation on acquired intangibles £45.5m (2023: £49.0m)
When an acquisition is made, the accounting standards (IFRS 3: Business
Combinations) require that an exercise is undertaken to value any brands,
trade names or other intellectual property (such as customer lists). Following
recognition of these assets, they are amortised over a period of 2-20 years.
Given the number of significant acquisitions made in recent years, primarily
within THG Beauty, we consider this amount should be viewed separately to
other amortisation totalling £19.9m (2023: £21.0m) to ensure comparability
to those who undertook fewer or no acquisitions. This is a non-cash cost.
Other amortisation, outside of amortisation on acquired intangibles remained
largely consistent YoY.
Operating profit/(loss)
Adjusted operating profit totals £92.2m (2023: £111.3m). The reduction YoY
is a result of the above-mentioned factors. The actions taken to exit
loss-making categories and territories and an anticipated improvement in
consumer spending are expected to increase the operating profit position in
the medium term, alongside an improvement in the THG Nutrition D2C sales
performance.
The Group incurred an operating loss in the year of £147.9m (2023: £39.2m).
This is primarily driven by adjusted items increasing by £92.9m in FY 2024,
being the one-off costs associated with losses on disposal of discontinued
categories including impairment of associated assets, onerous contracts and
costs related to the completion of the Myprotein rebrand which will
not recur.
Finance costs net of finance income
Finance costs net of finance income have remained stable at £54.5m
(2023: £53.0m) driven principally by higher interest rates, which have been
caused by the higher interest rate environment. Were it not for the
comprehensive hedging programme in place, this increase would have been more
material. The inherent cost increase is offset by a reduction in interest
expense following the partial repayment of bank borrowings in H2 2023.
Loss before tax and tax rate
Reported loss before tax was £202.4m (2023: £92.3m). The effective tax rate
is -0.9% (2023: 1.4%), based on a total tax credit of £21.9m (2023: tax
charge £15.7m). The effective tax rate differs from the average statutory
rate of 25.0% (2023: 23.5%). This is primarily due to amounts not recognised
and a write down of previously recognised deferred tax assets. These items
have both arisen as part of the demerger and reflect the split between
continuing and discontinued operations leading to a change in profile for tax
losses and deferred tax recognition.
Earnings per share
Loss per share on continuing operations was £(0.13) per share (2023: £(0.08)
per share).
Statutory cash flow statement
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Pre-demerger Adjusted EBITDA 123.1 122.3
Adjusted EBITDA - discontinued categories (8.7) (8.2)
Working capital movements 22.0 48.2
Tax paid (0.6) (5.4)
Adjusted items (39.3) (15.0)
Net cash generated from operating activities 96.5 141.8
Purchase of property, plant and equipment (31.7) (46.3)
Purchase of intangible assets (69.6) (79.4)
Proceeds from sale of non-core freehold assets - 55.5
Finance costs and lease repayments (83.2) (84.0)
Free cash flow (88.0) (12.4)
Acquisition of subsidiaries net of cash acquired - (20.3)
Repayments of bank borrowings (23.8) (25.0)
Share placing, net of directly attributable costs 93.3 -
Net decrease in cash and cash equivalents (18.6) (57.6)
Cash and cash equivalents at the beginning of the year 416.2 473.8
Cash held for distribution (THG Ingenuity) (89.0) -
Cash and cash equivalents at the end of the year 308.6 416.2
Free cash flow for the total Group was an outflow of £88.0m (2023: outflow of
£12.4m). This includes £101.3m (2023: £125.7m) of capital expenditure, cash
adjusting item payments of £39.3m (2023: £15.0m) and finance costs and lease
repayments totalling £83.2m (2023: £84.0m).
There was a decrease in cash and cash equivalents for the year of £18.6m
(2023: £57.6m) driven by the above cash outflows which were partially offset
by the equity raise which completed in October 2024 raising proceeds net of
costs of £93.3m (£89.0m of cash left the Group with THG Ingenuity). The
Group ended the period with c.£550m cash and available facilities at the end
of the year, ahead of demerger, being cash and cash equivalents of £397.6m
(including £89.0m within THG Ingenuity) (2023: £416.2m) and the undrawn RCF
totalling £150m.
There has been a reduction in the cash spend of £24.4m on capital expenditure
in 2024, consistent with the large scale investment projects completing in the
year. Finance costs and lease repayments remained consistent YoY.
Cash flows in respect of adjusting items largely relate to the demerger and
onerous contracts which are not expected to recur.
Repayments of the Term Loan A facility in the year totalled £23.8m (2023:
£25.0m). Loans and other borrowings at 2024 were £604.6m (2023: £650.0m).
Details of the post year end refinancing are included on the following page.
Post-demerger cash flow - for illustrative purposes
The table below details the cash flows for the year for THG Beauty and THG
Nutrition only to show the cash flows for the Group excluding THG Ingenuity;
this has been prepared consistently with the information published in the
circular previously released to the market.
2024 2023
£m £m
Post-demerger Adjusted EBITDA 92.1 111.3
Adjusted EBITDA - discontinued categories (8.7) (8.2)
Working capital movements 17.9 75.3
Tax paid (1.3) (5.1)
Adjusted items (21.2) (11.3)
Net cash generated from operating activities 78.8 162.0
Purchase of property, plant and equipment (7.5) (12.5)
Purchase of intangible assets (13.6) (20.9)
Proceeds from sale of non-core freehold assets - 8.5
Finance costs and lease repayments(1) (57.4) (56.9)
Free cash flow(2) 0.4 80.2
Acquisition of subsidiaries net of cash acquired - (16.4)
Repayments of bank borrowings (23.8) (25.0)
Share placing, net of directly attributable costs 93.3 -
Net increase in cash and cash equivalents 79.8 38.8
2. Lease repayments include expected outflows for subleases entered
into on 2 January 2025. This is a per annum cash cost of c.£10m.
3. Free cash flow is defined as cash flow before the impact of
acquisitions, bank borrowings and share placings.
On a post-demerger basis, free cash flow is neutral with an inflow of £0.4m
(2023: inflow of £80.2m) and a net increase in cash and cash equivalents of
£79.8m (2023: £38.8m). Excluding one-off cash adjusted items, a cash inflow
of £21.6m would have been generated.
In the prior year there was a one-off working capital inflow of £75.3m as
inventory levels normalised. In FY 2024, the inflow of £17.9m was lower than
anticipated due to a delay in a VAT payment of over £20m received in January
2025.
The post-demerger cash flows differ to the pre-demerger basis as a result of
reduced capital expenditure totalling £21.1m (2023: £33.4m), lower cash
adjusting items to exclude those relating to THG Ingenuity and lower finance
costs and lease repayments given many of the Group's leases relate to THG
Ingenuity.
Repayments of bank borrowings and share placing proceeds remain the same on a
pre and post-demerger basis.
Adjusted items
In order to understand the underlying performance of the Group, certain costs
included within cost of sales, distribution, administrative and finance costs
have been classified as adjusted items.
The largest category of costs included within adjusted items are those
relating to loss on discontinued categories of £24.7m (2023: £10.5m) along
with the impairment of its associated brands and other intangibles of £57.5m
(2023: £nil) as the Group progressed its strategic review of loss-making
non-core brands and product offerings.
For full details on each category of adjusted item see note 4 to the financial
statements.
Balance sheet
Cash and cash equivalents and net cash before lease liabilities
2024 2023
£m £m
Loans and other borrowings (604.6) (650.0)
Lease liabilities(1) (41.4) (345.0)
Cash and cash equivalents 308.6 416.2
Sub-total (337.3) (578.9)
Adjustments:
Retranslate debt balance at swap rate where hedged by foreign exchange (8.3) 15.7
derivatives
Net debt (345.6) (563.2)
Net debt before lease liabilities - post demerger (304.3) n/a
Net debt before lease liabilities - pre demerger(2) (215.3) (218.2)
1. Following completion of the demerger, subleases were entered into by THG
PLC generating c.£80m of new lease liabilities, therefore we expect the lease
liabilities of THG PLC to increase in FY 2025 reflecting the subleases.
2. Being the net debt less lease liabilities - post demerger of £304.3m
plus the £89.0m of cash that was included within the held for distribution
group.
At 31 December 2024, the Group held £397.6m in cash and cash equivalents
(2023: £416.2m) split between cash of £308.6m within the post-demerger Group
and £89.0m included within the held for distribution group (within THG
Ingenuity and which left the Group following the demerger).
At the year end, the Group held a €600m Term Loan B due to mature in
December 2026 and a £109m Term Loan A facility maturing in Q4 2025. The
undrawn RCF totalled £150m.
Post year end, on 4 April 2025, the Group announced the completion of its debt
refinancing to 2029. As part of a plan to delever, the refinancing reduced the
Term Loan B from €600m to €445m with maturity extended by three years to
December 2029. The Term Loan A was partially repaid with a final stub of £35m
maturing in Q4 2025. The undrawn RCF totals £150m. The reduction in
facilities was partially funded by an equity raise on 28 March 2025, with
gross proceeds of £95.4m. The demerger of THG Ingenuity will materially
reduce the cash outflows of THG PLC with substantial reductions in lease
commitments (of c. £20m cash saving per annum) and capex requirements, which
in turn means that the Group requires smaller banking facilities.
Net debt before lease liabilities on a pre-demerger basis was consistent year
on year at £215.3m (2023: £218.2m). The small decrease is driven by net
impact of the equity placing less cash spent on repayment of borrowings, lease
repayments, finance costs and cash adjusting items.
Non-current assets
Property, plant and equipment totalled £64.9m (2023: £273.2m) with £177.0m
being held for distribution to THG Ingenuity. Intangible assets totalled
£958.3m (2023: £1,207.4m) with £149.5m being held for distribution.
Decreases in the year are driven by the depreciation and amortisation charge
(see earlier). Following the demerger, the capital expenditure is expected to
reduce significantly given the previous additional costs were primarily in
respect of the platform which belongs to THG Ingenuity.
Consolidated statement of comprehensive income
for the year ended 31 December 2024
2024 2023
Total (restated(1))
£'000 Total
£'000
Note
Continuing operations
Revenue 2 1,751,404 1,879,866
Cost of sales (1,057,809) (1,082,493)
Gross profit 693,595 797,373
Distribution costs (230,957) (277,255)
Administrative costs (610,533) (559,350)
Operating loss 3 (147,895) (39,232)
Finance income 6 9,049 12,878
Finance costs 6 (63,554) (65,898)
Loss before taxation (202,400) (92,252)
Income tax credit/(charge) 21,867 (15,710)
Loss for the financial year from continuing operations (180,533) (107,962)
Discontinued operations
Loss for the financial year from discontinued operations, net of tax 9 (145,607) (140,410)
Loss for the financial year (326,140) (248,372)
Other comprehensive income/(expense)
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translating foreign operations, net of tax 12,175 (46,255)
Net loss in cash flow hedges (7,941) (5,220)
Total comprehensive expense for the financial year (321,906) (299,847)
Basic and diluted loss per share continuing operations (£) 16 (0.13) (0.08)
Basic and diluted loss per share discontinued operations (£) 16 (0.11) (0.11)
Basic and diluted loss per share (£) 16 (0.24) (0.19)
Adjusted EBITDA
2024 2023
Total (restated)
£'000 Total
£'000
Note
Operating loss (147,895) (39,232)
Adjustments for:
Amortisation 7 19,880 21,005
Amortisation of acquired intangibles 7 45,506 48,953
Depreciation 3 24,824 24,059
Adjusted items - cash 4 24,547 10,445
Adjusted items - non-cash 4 42,440 21,162
Adjusted items - non-cash impairment 4 57,466 -
Share-based payments 5 16,579 16,723
EBITDA on discontinued categories 8,739 8,143
Post-demerger Adjusted EBITDA(2) 92,086 111,258
The comprehensive expense is 100% attributable to the owners of the parent
company.
1. Restated for discontinued operations, refer to note 9 for further
detail.
2. Post-demerger Adjusted EBITDA is defined as operating profit before
depreciation, amortisation, share-based payments, adjusted items and
discontinued categories.
Consolidated statement of financial position
as at 31 December 2024
31 December 31 December
2024 2023
£'000 £'000
Note
Non-current assets
Intangible assets 7 958,322 1,207,383
Property, plant and equipment 8 64,890 273,171
Right-of-use assets 15 29,327 303,635
Investments - 1,400
Other financial assets 4,590 7,999
Deferred tax asset 4,072 -
1,061,201 1,793,588
Current assets
Assets held for distribution 9 762,369 -
Inventories 10 265,371 297,143
Trade and other receivables 11 147,272 271,782
Other financial assets 727 1,915
Cash and cash equivalents 12 308,622 416,162
1,484,361 987,002
Total assets 2,545,562 2,780,590
Equity
Ordinary Shares 8,219 7,072
Share premium 2,117,148 2,024,824
Merger reserve 615 615
Capital redemption reserve 523 523
Hedging reserve (36,134) (20,020)
Cost of hedging reserve 33,456 25,283
FX reserve 27,779 15,604
Retained earnings (1,845,779) (1,032,234)
305,827 1,021,667
Non-current liabilities
Borrowings 14 491,782 621,011
Other financial liabilities 35,705 -
Lease liabilities 15 31,077 301,440
Provisions 11,911 22,130
Deferred tax liability 63,701 55,698
634,176 1,000,279
Current liabilities
Liabilities held for distribution 9 589,672 -
Contract liability 15,650 22,864
Trade and other payables 13 342,527 638,350
Borrowings 14 112,785 29,026
Current tax liability 3,568 1,266
Lease liabilities 15 10,293 43,537
Provisions 6,469 3,838
Other financial liabilities 23,264 19,763
Dividend liability 9 501,331 -
1,605,559 758,644
Total liabilities 2,239,735 1,758,923
Total equity and liabilities 2,545,562 2,780,590
Consolidated statement of changes in equity
for the year ended 31 December 2024
Ordinary Share Merger Capital FX Cost of
Shares premium reserve redemption reserve hedging
£'000 £'000 £'000 reserve £'000 reserve
£'000 £'000
Hedging Retained Total
reserve earnings equity
£'000 £'000 £'000
Note
Balance at 1 January 2023 6,903 2,024,452 615 523 61,859 (6,221) 16,704 (803,096) 1,301,739
Loss for the year - - - - - - - (248,372) (248,372)
Other comprehensive expense:
Impact of foreign exchange - - - - (46,255) - - - (46,255)
Movement on hedging instruments - - - - - (13,799) 8,579 - (5,220)
Total comprehensive (expense)/income for the year - - - - (46,255) (13,799) 8,579 (248,372) (299,847)
Issue of Ordinary Share capital 169 372 - - - - - - 541
Share-based payments 5 - - - - - - - 16,723 16,723
Deferred tax in equity - - - - - - - 2,511 2,511
Balance at 31 December 2023 7,072 2,024,824 615 523 15,604 (20,020) 25,283 (1,032,234) 1,021,667
Balance at 1 January 2024 7,072 2,024,824 615 523 15,604 (20,020) 25,283 (1,032,234) 1,021,667
Loss for the year - - - - - - - (326,140) (326,140)
Other comprehensive income:
Impact of foreign exchange - - - - 12,175 - - - 12,175
Movement on hedging instruments - - - - - (16,114) 8,173 - (7,941)
Total comprehensive (expense)/income for the year - - - - 12,175 (16,114) 8,173 (326,140) (321,906)
Issue of Ordinary Share capital 1,147 92,324 - - - - - - 93,471
Share-based payments 5 - - - - - - - 16,579 16,579
Deferred tax in equity - - - - - - - (2,653) (2,653)
Dividend in specie 9 - - - - - - - (501,331) (501,331)
Balance at 31 December 2024 8,219 2,117,148 615 523 27,779 (36,134) 33,456 (1,845,779) 305,827
Consolidated statement of cash flows
for the year ended 31 December 2024
Note 2024 2023
£'000 £'000
Cash flows from operating activities before adjusted cash flows
Cash generated from operations 136,412 162,258
Income tax paid (621) (5,411)
Net cash generated from operating activities before adjusted cash flows 135,791 156,847
Cash flows relating to adjusted items (39,328) (15,040)
Net cash generated from operating activities 96,463 141,807
Cash flows from investing activities
Acquisition of subsidiaries net of cash acquired (23) (20,259)
Proceeds from sale of non-core freehold assets - 55,450
Purchase of property, plant and equipment (31,709) (46,289)
Purchase of intangible assets (69,571) (79,369)
Interest received 6 9,190 13,329
Net cash used in investing activities (92,113) (77,138)
Cash flows from financing activities
Proceeds from issuance of Ordinary Shares net of fees 93,319 -
Interest paid (44,954) (47,803)
Repayment of lease liabilities 15 (47,476) (49,487)
Repayment of bank borrowings and loan fees (23,800) (25,000)
Net cash flow from financing activities (22,911) (122,290)
Net decrease in cash and cash equivalents (18,561) (57,621)
Cash and cash equivalents at the beginning of the year 416,162 473,783
Cash and cash equivalents at the end of the year 12 397,601 416,162
(including cash held in disposal groups)
Cash and cash equivalents held in disposal group presented as held for 9 88,979 -
distribution at the end of the year
Cash and cash equivalents at the end of the year 308,622 416,162
Notes to the consolidated financial statements
1. Basis of Preparation
a. General information
THG PLC (company number 06539496) is a public company limited by shares and
incorporated in England and Wales. It has a standard listing on the London
Stock Exchange and is the holding company of the Group. The address of its
registered office is Icon 1 7-9 Sunbank Lane, Ringway, Altrincham, United
Kingdom, WA15 0AF. The Company is the parent and the ultimate parent of the
Group, the financial statements comprises the results of the Company and its
subsidiaries ("the Group"). The financial period presented here is for the 12
months ending 31 December 2024, and a prior period comparative of the 12
months ending 31 December 2023.
b. Basis of preparation
The consolidated financial statements, have been prepared in accordance with
UK-adopted international accounting standards ("IFRS") and, as regards the
parent company financial statements, as applied in accordance with the
provisions of the Companies Act 2006. The financial statements have been
prepared on the historical cost basis, except for derivatives which are held
at fair value.
The financial information included in this preliminary statement of results
does not constitute statutory accounts within the meaning of section 435 of
the Companies Act (the "Act"). These Condensed Consolidated Financial
Statements of THG PLC and its subsidiaries apply the same accounting policies,
presentation and methods of calculation as those followed in the preparation
of the Group's consolidated financial statements for the year ended 31
December 2022, which were prepared in accordance with International Financial
Reporting Standards ('IFRS') as issued by the International Accounting
Standards Board and were also prepared in accordance with IFRS adopted by the
European Union ('EU'), the Companies Act 2006 and Article 4 of the EU IAS
Regulations.
The statutory accounts for the 12 months ending 31 December 2024 were approved
by the Board of Directors on 28 April 2025. The Auditors of the Group made a
report thereon under Chapter 3 or part 16 of the Act. This report was
unqualified and does not contain a statement under sections 498 (2) or (3) of
the Act.
The statutory accounts for the 12 months ending 31 December 2023 have been
delivered to the registrar of Companies, and the Independent Auditors of the
Group made a report thereon under Chapter 3 or part 16 of the Act. This report
was unqualified and does not contain a statement under sections 498 (2) or (3)
of the Act.
The financial statements are presented in pounds sterling, rounded to the
nearest hundred thousand unless otherwise stated. The Directors consider it
appropriate to adopt the going concern basis of accounting in preparing the
financial statements of the Group.
The accounting policies adopted by the Group in the current year are
consistent with those adopted during the year ended 31 December 2023.
There have been no new or amended accounting standards or interpretations
adopted during the year that have had a significant impact on the Group's
financial statements.
The Group is currently reviewing the likely impact of IFRS 18 on its statutory
reporting as well as any potential impact from the amendments to IFRS 9 and
IFRS 7 in relation to credit and debit card payments made by customers which
are receivable from banks and clear the bank shortly after the transaction
takes place. There are no other standards, interpretations or amendments to
IFRS that have been issued but are not yet effective that are expected to have
a material impact on the Group's financial statements.
2. Segmental reporting and revenue
The Directors have assessed the criteria and considerations under IFRS 8
Operating Segments in order to identify operating segments within the Group.
For the year to 31 December 2023, the Group's activities were divided into the
following segments: THG Beauty, THG Nutrition, THG Ingenuity and Discontinued
categories.
In 2024, following successful completion of the demerger of THG Ingenuity on 2
January 2025, the THG Ingenuity segment has been recognised in line with IFRS
5 Non-current Assets Held for Sale and Discontinued Operations. Refer to note
9 for further detail. On this basis, the Directors have concluded that for
2024, the Group has three operating segments: THG Beauty, THG Nutrition and
Discontinued categories. The prior year segmental analysis has been
re-presented to provide a like-for-like comparison.
The following table describes the main activities for each reportable
operating segment:
Segment Activities
THG Beauty A digital-first brand owner, retailer and manufacturer in the prestige beauty
market, with a portfolio of own brands across skincare, haircare and
cosmetics. Through its retail websites, including Lookfantastic, Dermstore and
Cult Beauty, it is a route to market globally for third-party premium brands.
THG Nutrition A group of digital-first nutrition brands, which includes the world's largest
online sports nutrition brand Myprotein and its family of brands (Myvegan,
Myvitamins, MP Activewear and MyPRO), with a vertically integrated business
model supported by global THG production facilities.
Discontinued categories Discontinued categories are, as previously reported, certain loss-making
categories and territories within THG Beauty and THG Nutrition which following
the ongoing strategic review, has led to the successful exit. These exits do
not meet the criteria under IFRS 5 Discontinued Operations at the balance
sheet date, as these categories and territories are not a major component of
the Group as defined by the accounting standard; however, management report
the financial results of these categories separately in their reporting to the
chief operating decision-maker ("CODM"); as such, the result has also been
shown in the same format within this note.
Central costs relate primarily to the PLC Board remuneration, professional
services fees, Group finance, M&A, risk (insurance) and governance costs
that are not recharged to the divisions as they principally relate to the
operations of the PLC holding company.
The CODM is the executive Board directors, who make key operating decisions
for the business. The CODM receives daily financial information at the
combined Group level, along with monthly information at a business level, and
uses this information to allocate resources, make operating decisions and
monitor the performance of each of the businesses.
The measure of the Group's profit or loss used by THG's management team is
Adjusted EBITDA comprising operating loss adjusted for interest, tax,
depreciation, amortisation, shared-based payments and adjusted items. This is
reconciled to the nearest IFRS measure (loss before tax) in the below table.
FY 2024
Continuing
Operations
£'000
THG THG Central Post Discontinued
Beauty Nutrition PLC demerger Categories
£'000 £'000 £'000 £'000 £'000
2024
External revenue 1,108,497 579,780 - 1,688,277 63,127 1,751,404
Internal revenue - - - - - -
Total revenue 1,108,497 579,780 - 1,688,277 63,127 1,751,404
Adjusted EBITDA 79,785 34,538 (22,237) 92,086 (8,739) 83,347
Margin % 7.2% 6.0% - 5.5% (13.8%) 4.8%
Depreciation - - - - - (24,824)
Amortisation - - - - - (65,386)
Share-based payments - - - - - (16,579)
Adjusted items - - - - - (124,453)
Operating loss - - - - - (147,895)
Finance income - - - - - 9,049
Finance costs - - - - - (63,554)
Loss before taxation - - - - - (202,400)
Segment assets and liabilities are not disclosed because they are not
regularly reported or reviewed by the Board.
FY 2023
Continuing
Operations
£'000
THG THG Central Post Discontinued
Beauty Nutrition PLC demerger categories
£'000 £'000 £'000 £'000 £'000
2023
External revenue 1,073,304 657,911 - 1,731,215 148,651 1,879,866
Internal revenue - - - - - -
Total revenue 1,073,304 657,911 - 1,731,215 148,651 1,879,866
Adjusted EBITDA 44,086 88,929 (21,757) 111,258 (8,143) 103,115
Margin % 4.1% 13.5% - 6.4% (5.5%) 5.5%
Depreciation - - - - - (24,059)
Amortisation - - - - - (69,958)
Share-based payments - - - - - (16,723)
Adjusted items - - - - - (31,607)
Operating loss - - - - - (39,232)
Finance income - - - - - 12,878
Finance costs - - - - - (65,898)
Loss before taxation - - - - - (92,252)
The segmental result for 2023 has been restated for the following:
· THG Beauty: THG Luxury was previously included in the THG Beauty
segment consistent with management reporting. As it was sold during the year,
it is now reported within discontinued categories. There is no change to the
previously reported total revenue, Adjusted EBITDA, operating loss or loss
before taxation.
The Group has provided an analysis of external continuing revenue by region
(by destination):
2023
(restated(1))
£'000
2024
£'000
UK 820,517 841,943
USA 362,874 343,052
Europe 362,489 401,910
Rest of the world 205,524 292,961
1,751,404 1,879,866
1. Restated for discontinued operations (refer to note 9).
The Group's non-current assets by geography are as follows:
2024 2023
£'000 £'000
UK 624,541 1,189,386
Europe 42,270 120,459
Rest of the world 385,728 475,744
1,052,539 1,785,589
3. Operating loss
2023
(restated(1))
£'000
2024
£'000
Note
Operating loss has been arrived at after charging/(crediting):
Adjusted items - cash 4 24,547 10,445
Adjusted items - non-cash 4 42,440 21,162
Adjusted items - non-cash impairment 4 57,466 -
Employee costs 142,253 123,770
Share-based payments 5 16,579 16,723
Depreciation on fixed assets 8 13,092 14,258
Depreciation on right-of-use assets 15 11,732 9,801
Amortisation 7 19,880 21,005
Amortisation of acquired intangibles 7 45,506 48,953
Net foreign exchange gain (37) (201)
1. Restated for discontinued operations (refer to note 9).
4. Adjusted items
These are items which are material in nature and include, but are not limited
to, costs relating to acquisitions, disposals and significant events or
programmes, some of which span multiple years. These items are excluded from
Adjusted EBITDA as management believe their inclusion distorts the underlying
trading performance. This is consistent with the way that financial
performance is measured by management and reported to the Board.
2023
(restated(1))
£'000
2024
£'000
Within cost of sales
Loss on disposal of discontinued and the exiting of loss-making categories 24,742 10,465
Inventory provision following strategic review and commercial rebrand 8,820 4,786
33,562 15,251
Within distribution costs
Transportation, delivery and fulfilment costs 1,268 1,846
Commissioning - new facilities - 342
1,268 2,188
Within administrative costs
Impairment of assets - THG Experience 14,854 -
Impairment of assets - discontinued categories 57,466 -
Loss on property portfolio restructure 528 6,788
Loss on disposal of (or exit from) discontinued and loss-making categories 259 4,498
Other costs following the outcome of strategic review 172 152
Restructuring costs 5,582 2,184
Acquisitions - restructuring and integration 3,047 346
Onerous contracts 7,075 -
Other legal and professional costs 640 200
89,623 14,168
Total adjusted items before tax 124,453 31,607
Tax impact (5,095) (1,868)
Total adjusted items 119,358 29,739
Cash adjusting items before tax(2) 24,547 10,445
1. Restated for discontinued operations (refer to note 9).
2. Cash adjusting items before tax total £24.5m (2023: £10.5m)
reflecting the total cash before tax expected to be paid.
Impairment of assets - THG Experience
The decision to pause refurbishment work on an asset within THG Experience has
led to an impairment charge in the year of £14.9m, this also includes the
expected cost of returning the property at the end of the term.
Impairment of assets - discontinued categories
Following the decision to discontinue certain beauty brands an impairment has
been charged totalling £57.5m against affected assets.
Loss on disposal of discontinued and the exiting of loss-making categories
Consistent with the Group's ongoing commitment to simplify and streamline
operations as part of the strategic review of loss‑making categories and
territories, several actions concluded in 2024. This includes the sale of its
portfolio of luxury goods websites (previously THG Luxury) along with some
non-core brands and product offerings across THG Beauty and THG Nutrition.
This has resulted in an inventory provision adjustment within cost of sales
and asset impairments within administrative costs to reflect the recoverable
value. These costs are deemed to be one-off losses to enable and complete the
exit of loss-making areas of the business. Associated income in respect of
costs arising for discontinued categories has been set out in note 2. FY 2023
reflects costs of the same nature following the sale of THG OnDemand in July
2023 and commencement of the strategic review.
Inventory provision following strategic review and commercial rebrand
In H2 2023, Myprotein initiated a comprehensive global rebrand, reflecting a
pivotal change in strategy aimed at broadening the accessibility of its
products. The Group's commitment to sustainability, notably reducing waste,
underpinned this phased rebrand which spanned several months. This allowed for
the trade through of old brand packaging and drove minimal disposal of stock.
Where possible, stock was sold through in line with this strategy; however,
for items that could not be sold, primarily clothing, a one-off stock
provision has been recognised for discontinued or obsolete items as part of
adjusting items, as these costs are not indicative of the Group's underlying
trade as discounts and marketing expenses associated with the clearance of
associated stock would typically not be incurred and are not expected to recur
in 2025. The comparative position reflects the strategic review in 2023 for
THG Beauty manufacturing, where efficiencies were identified that would
support long-term cost savings. Consistent with this, a one-off provision was
recognised in the prior year in respect of inventory that is no longer
required to drive forward the operations.
Transportation, delivery and fulfilment costs
The conflict in Israel has resulted in pressures across the international
network and travel routes, with increased costs being experienced as the war
continues, which are not fully passed on to customers. The Group continues to
insulate the customer from the full impact of these rising costs, with the
residual expense therefore being over and above those incurred through the
normal course of business. The Group was severely impacted by high surcharges
from suppliers in respect of travel routes travelling through and into Asia
during the Covid-19 pandemic and extended lockdown periods. The supplier
surcharge has not recurred in 2024.
Commissioning - new facilities
Consistent with its strategic priorities, including warehouse optimisation,
the Group completed the commissioning of its campus at Manchester Airport, UK
("Icon") in 2023. The warehouse is now fully operational and no further costs
were incurred in 2024.
Loss on property portfolio restructure
Following a Group review of properties held within its portfolio, leased
properties no longer in use have been sold or repurposed. Where vacated
properties are retained, unavoidable costs relating to these sites are
incurred over the remaining life of the lease and will continue to be
classified as adjusted items.
Other costs following the outcome of strategic review
As part of the strategic review the Group has consolidated acquired warehouses
into the existing THG network. The costs that have been incurred as part of
this process include costs associated with the dual running of facilities and
other third-party costs such as rent and utilities. All costs recognised
within adjusted items are from the point of management's decision to exit the
acquired warehouse. These costs are considered to be one-off costs and are
incremental to the ongoing trading of the Group. The majority of these costs
have now been incurred.
Restructuring costs
Consistent with the strategic review, the Group continues to explore and
implement corporate restructuring and evolve its internal operations where
sustainable alternatives are identified. The costs incurred are attributable
to employee-related severance as part of specific operational restructuring
projects as efficiencies are implemented across the business. During 2024,
given the nature of the programmes, additional costs in respect of salary
costs for employees within consultation periods and dual running costs were
also included within adjusted items. The costs of the restructuring programme
were offset by the annualised saving within 6 months. These projects, and the
costs attached, are expected to be completed within a 12‑month period.
Acquisitions - restructuring and integration
Costs incurred relate to the integration of Biossance into the existing THG
network which was acquired in December 2023. The nature of these costs is
consistent with those set out under other costs following the outcome of
strategic review but have been incurred from the point of initial acquisition.
Given the nature of these costs, it is not unusual for these to span more than
one accounting period depending on the date of acquisition and the time
required for the integration to be completed. It is expected that the costs
will reduce in 2025.
Onerous contracts
The Group entered into a sponsorship agreement in 2023 with Williams racing
which has not delivered the expected commercial returns, as such, this has
been identified as an onerous contract. Under the terms of the sponsorship
agreement, the Group is contractually obligated to incur annual fees and
termination costs. Notice of termination has been provided, and the contract
will be exited at the earliest available opportunity; 31 December 2025. The
total cost recognised within adjusting items includes the costs incurred from
1 January 2024 plus any unavoidable committed costs to 31 December 2025.
Additionally, the unavoidable costs committed to an aborted implementation of
a Human Resources enterprise reporting platform (ERP) have also been
recognised as an onerous contract. The Group classifies these expenses as
adjusted items, as they do not represent costs incurred in the normal course
of business.
Other legal and professional costs
The Group incurs legal and professional costs that are non-recurring, one-off
in nature and not related to trading activities. These costs are included as
adjusted items and can include, but are not limited to, legal costs for
one-off matters and other fees associated with investor activities. The legal
and professional costs incurred during 2024 relate to the transfer to ESCC
category of the Official List.
5. Share-based payments
Overview
The Group operates a share-based compensation plan, under which the Group
receives services from employees as consideration for equity instruments
(options) of the Company. The fair value of the employee services received in
exchange for the grant of the equity instruments is recognised as an expense
in the Statement of Comprehensive Income with the corresponding increase
to equity.
Previously issued plans
Senior leadership plan
Under the senior leadership plan (SLT Plan), share options of the parent are
granted to senior executives of the Company, including members of key
management personnel. The awards vest in three equal tranches, annually on 31
December over the three years from grant date. Performance conditions and
targets linked to ESG are attached to a small proportion of the awards to a
small number of participants. The fair value of the share options is the
market price of the underlying shares on the grant date. There are no cash
settlement alternatives. The Group does not have a past practice of cash
settlement for these options. The Group accounts for the SLT as an
equity-settled plan.
Employee plan
Under the employee plan, the Group, at its discretion, may grant share options
of the parent to employees other than senior executives. The option awards
will vest in three equal tranches annually on 31 December over the three years
from grant date, provided participants remain in continued employments with
the Company at each date. A small number of shares vested in full on 31
December following issue. The fair value of the share options is the market
price of the underlying shares on the grant date.
The contractual term of the share options is three years and there are no cash
settlement alternatives for the employees. The Group does not have a past
practice of cash settlement for these awards. The Group accounts for the
employee plan as an equity‑settled plan.
Plans issued in the year
A total of 33,574,120 shares were issued in the 12 months to 31 December 2024.
The shares issued during the year are as follows:
· On 7 March 2024 a total of 3,685,598 options were granted with
737,120 of these shares only vesting if targets linked to ESG are met. The
remainder of the shares vest in three equal tranches and are subject to
performance based targets.
· On 15 March 2024 a total of 22,146,794 options were granted. The
vesting conditions are as follows:
· 20,376,943 awards that vest in three equal tranches, with the first
being 31 December following the date of grant. The second and third tranches
for each separate grant will vest on 31 December in the following two years
respectively;
· 1,680,852 awards, 560,284 of which vested on grant date, with the
second tranche vesting on 31 December 2024. The third tranche will vest on 31
December 2025;
· 88,999 awards that vested on 31 December 2024.
· On 1 August 2024 a total of 3,653,846 options were granted with
730,769 of these shares only vesting if targets linked to ESG are met. The
vesting criteria is the same as that of the shares issued on 7 March 2024.
· On 30 August a total of 4,087,882 options were granted. The vesting
conditions are as follows:
· 2,196,973 awards with 137,311 of these shares only vesting if targets
linked to ESG are met. The remainder of the shares vest in three equal
tranches and are subject to performance based targets.
· 1,890,909 awards with 1/24th vesting at the end of each month from
September 2024.
2024 2023
£'000 £'000
Expense arising from equity-settled share-based payment transactions 16,579 16,723
The following table shows the shares granted and outstanding at the beginning
and end of the year:
2024 2023
Weighted Weighted
average average
exercise price exercise price
2024 2023
Number Number
of shares of shares
As at 1 January 68,718,060 £0.04 41,796,012 £0.06
Granted during the year 33,574,120 £0.02 35,529,824 £0.01
Forfeited during the year (3,854,758) £0.00 (5,324,678) £0.00
Exercised during the year (9,982,528) £0.00 (3,283,098) £0.00
As at 31 December 88,454,894 £0.04 68,718,060 £0.03
Exercisable as at 31 December 6,072,570 £0.00 19,975,803 £0.00
The key inputs to calculate the charge are the share price at the date of
grant and an assumption around those not remaining in continued employment,
spread across the vesting period. Achievement of performance conditions has
been considered where appropriate. The range of exercise prices are £0.00 to
£0.16, and the weighted average remaining contractual life is 8.3 years.
The weighted average share price at date of exercise of shares exercised
during the year was £0.60.
6. Finance income and cost
2023
(restated(1))
£'000
2024
£'000
Finance income
Bank interest receivable 9,049 12,878
Finance costs
Bank interest payable and charges 61,968 64,672
Interest on lease liabilities 1,586 1,226
63,554 65,898
1. Restated for discontinued operations (refer to Note 9).
7. Intangible assets
Platform
development
costs
£'000
Intellectual New product
property development
£'000 £'000
Goodwill Brands Total
£'000 £'000 £'000
Cost or valuation
At 1 January 2023 790,977 268,249 223,972 640,756 13,213 1,937,167
Transfers - - (1,627) 103 1,524 -
Additions - 60,775 19,988 83 798 81,644
Business combinations 2,318 - 1,816 4,329 - 8,463
Currency translation (18,901) (199) (8,730) (17,606) (8) (45,444)
Disposals (1,175) (31,226) (24,078) (376) (310) (57,165)
At 31 December 2023 773,219 297,599 211,341 627,289 15,217 1,924,665
At 1 January 2024 773,219 297,599 211,341 627,289 15,217 1,924,665
Transfers - (1,278) 137 - 528 (613)
Additions - 50,046 14,474 591 3,043 68,154
Currency translation 1,266 19 1,663 1,941 (12) 4,877
Disposals (439) (18,285) (21,119) (1,499) (15) (41,357)
Transfers to assets held for distribution (86,896) (324,782) (33,343) (14,913) (4,893) (464,827)
At 31 December 2024 687,150 3,319 173,153 613,409 13,868 1,490,899
Accumulated amortisation
At 1 January 2023 304,632 168,332 95,323 87,953 5,165 661,405
Transfers - 97 (130) 33 - -
Amortisation - 38,520 26,893 52,474 1,485 119,372
Impairment loss - 240 - - - 240
Currency translation (1,651) 766 (5,418) (2,437) (2) (8,742)
Disposals - (30,853) (23,468) (362) (310) (54,993)
At 31 December 2023 302,981 177,102 93,200 137,661 6,338 717,282
At 1 January 2024 302,981 177,102 93,200 137,661 6,338 717,282
Amortisation - 43,725 29,555 36,661 2,558 112,499
Currency translation 392 (4) 1,086 370 (14) 1,830
Reclassification - - 15,468 (15,468) - -
Disposals (428) (17,684) (19,762) (2,099) (15) (39,988)
Impairment loss (net) 40,521 - - 15,770 - 56,291
Transfers to assets held for distribution (85,483) (199,925) (24,620) (3,235) (2,074) (315,337)
At 31 December 2024 257,983 3,214 94,927 169,660 6,793 532,577
Net book value
At 1 January 2023 486,345 99,917 128,649 552,803 8,048 1,275,762
At 31 December 2023 470,238 120,497 118,141 489,628 8,879 1,207,383
At 31 December 2024 429,167 105 78,226 443,749 7,075 958,322
The reclassification line relates to the reclass of amortisation charges
between appropriate intangible asset categories.
The impairment charge has been explained within note 4 and the CFO Report.
8. Property, plant and equipment
Leasehold
freehold
improvements
and buildings
£'000
Computer
Motor Plant and Fixtures equipment
vehicles machinery
£'000 £'000
and fittings and software Total
£'000 £'000 £'000
Cost
At 1 January 2023 2,317 143,100 141,393 118,719 123,719 529,248
Additions 111 11,209 6,707 12,224 2,829 33,080
Business combinations - - 8 11 19 38
Transfers - 5,430 (37,869) 3,009 29,430 -
Currency translation differences - (302) 743 (532) (515) (606)
Disposals (165) (6,474) (4,117) (281) (45,875) (56,912)
At 31 December 2023 2,263 152,963 106,865 133,150 109,607 504,848
At 1 January 2024 2,263 152,963 106,865 133,150 109,607 504,848
Additions 137 11,935 8,712 7,053 2,474 30,311
Transfers 39 1,878 (3,698) 2,289 1,041 1,549
Currency translation differences - (332) (783) 142 (33) (1,006)
Disposals (116) (2,349) (1,345) (780) (874) (5,464)
Transfer to assets held for distribution (1,893) (109,492) (83,062) (124,692) (42,431) (361,570)
At 31 December 2024 430 54,603 26,689 17,162 69,784 168,668
Accumulated depreciation
At 1 January 2023 1,587 43,103 36,399 54,881 33,237 169,207
Depreciation (note 3) 340 14,494 13,489 21,310 6,058 55,691
Impairment loss - 1,064 987 115 10,950 13,116
Currency translation differences - (342) 232 (581) (187) (878)
Disposals (170) (1,949) (51) (257) (3,032) (5,459)
At 31 December 2023 1,757 56,370 51,056 75,468 47,026 231,677
At 1 January 2024 1,757 56,370 51,056 75,468 47,026 231,677
Depreciation (note 3) 178 17,857 13,984 18,134 4,155 54,308
Transfers - 8 (8) - - -
Impairment loss - 7,328 - - 155 7,483
Currency translation differences - (92) (224) 100 (50) (266)
Disposals - (2,347) (1,212) (780) (494) (4,833)
Transfer to asset held for distribution (1,773) (47,492) (42,213) (83,675) (9,438) (184,591)
At 31 December 2024 162 31,632 21,383 9,247 41,354 103,778
Net book value
At 1 January 2023 730 99,997 104,994 63,838 90,482 360,041
At 31 December 2023 506 96,593 55,809 57,682 62,581 273,171
At 31 December 2024 268 22,971 5,306 7,915 28,430 64,890
9. Discontinued operations
On 17 September 2024, the Group announced its intention to demerge THG
Ingenuity from THG PLC into an independent private company. Shareholder
approval was obtained on 27 December 2024 and, therefore, the Group believed
that it was highly probable that the transaction would complete within 12
months from the date of the announcement. Therefore, THG Ingenuity was
classified as a disposal group held for distribution and discontinued
operations from that date. Upon demerger, THG Ingenuity included THG
Experience, which had previously been reported as part of the THG Beauty
segment. The demerger successfully completed on 2 January 2025.
The results of THG Ingenuity for the year are presented below:
2024 2023
£'000 £'000
Total revenue 654,768 685,383
Internal revenue(1) (462,858) (519,871)
External revenue 191,910 165,512
Cost of sales (142,392) (122,595)
Gross profit 49,518 42,917
Administrative costs (155,949) (171,414)
Other operating expense - (17,664)
Operating loss (106,431) (146,161)
Finance income 141 451
Finance costs (14,550) (14,002)
Loss before taxation (120,840) (159,712)
Income tax (charge)/credit (24,767) 19,302
Loss for the financial year (145,607) (140,410)
1. Internal revenue is eliminated at Group level in the current year
but will be recognised as external revenue within THG Ingenuity from the next
financial year, following the demerger on 2 January 2025.
THG Ingenuity - Adjusted EBITDA
2024 2023
Notes £'000 £'000
Operating loss (106,431) (146,161)
Adjustments for:
Amortisation 7 44,703 47,824
Amortisation of acquired intangibles 7 2,411 1,590
Depreciation 8,15 68,407 71,054
Adjusted items - cash A 19,211 5,346
Adjusted items - non-cash a 2,736 13,674
Other operating expense - non-cash loss on disposal of freehold assets - 17,664
Adjusted EBITDA 31,037 10,991
a. THG Ingenuity - Adjusted items
2024 2023
£'000 £'000
Within administrative costs
Transportation, delivery and fulfilment costs 160 609
Commissioning - new facilities 273 2,263
Restructuring costs 10,694 524
Loss on property portfolio restructure 956 12,433
Loss on disposal of (or exit from) discontinued and loss-making categories - 1,504
Other costs following the outcome of strategic review 932 1,329
Acquisitions - restructuring and integration 1,064 358
Onerous contracts 7,868 -
Total adjusted items before tax 21,947 19,020
Tax impact (2,574) (1,140)
Total adjusted items 19,373 17,880
Cash adjusting items before tax 19,211 5,346
Transportation, delivery and fulfilment costs
The conflict in Israel has resulted in pressures across the international
network and travel routes, with increased costs being experienced as the war
continues, which are not fully passed on to customers. The Group continues to
insulate the customer from the full impact of these rising costs, with the
residual expense therefore being over and above those incurred through the
normal course of business.
Commissioning - new facilities
Consistent with strategic priorities, the Group has completed its
commissioning of its campus in New Jersey, US. The 2024 costs relate to the
final stages of commissioning that were required to enable the warehouse to be
fully operational and work at optimised levels. No further costs are expected
to be incurred.
Restructuring costs
Consistent with the strategic review, the Group continues to explore and
implement corporate restructuring and evolve its internal operations where
sustainable alternatives are identified. As part of this, the costs incurred
are attributable to employee‑related severance as part of specific
operational restructuring projects as efficiencies are implemented across the
business. During 2024, given the nature of the programmes, additional costs in
respect of salary costs for employees within consultation periods and dual
running costs were also included within adjusted items.
Additionally, costs were incurred in executing the demerger of THG Ingenuity,
which left the Group on 2 January 2025. These projects, and the costs
attached, are expected to be completed within a 12-month period.
Loss on property portfolio restructure
Following a Group review of properties held within its portfolio, leased
properties no longer in use have been sold or repurposed. Where vacated
properties are retained, unavoidable costs relating to these sites are
incurred over the remaining life of the lease and will continue to be
classified as adjusted items.
Loss on disposal of discontinued and the exiting of loss-making categories
The comparative position reflects adjustments following the sale of THG
OnDemand in July 2023.
Other costs following the outcome of strategic review
As part of the strategic review the Group has consolidated acquired warehouses
into the existing THG network. The costs that have been incurred as part of
this process, include:
· Those incurred to relocate the stock across the fulfilment network.
· Restructuring costs associated with the dual running of facilities,
severance payments and other third-party costs such as rent and utilities.
All costs recognised within adjusted items are from the point of management's
decision to exit the acquired warehouse. These costs are considered to be
one-off costs and are incremental to the ongoing trading of the Group. The
majority of these costs have now been incurred.
Acquisitions - restructuring and integration
The costs during the year relate to pre-acquisition settlement costs that
arose before the acquisition of a subsidiary and has been classified as an
adjusted item as they relate to legacy matters predating the Group's
ownership. These costs are considered non-recurring in nature and do not form
part of the Group's underlying operating performance. The settlement was
finalised in 2024 and no further related costs are expected to be incurred in
2025.
The 2023 costs are in relation to the integration of City AM that was acquired
in July 2023.
Onerous contracts
The Group entered into a sponsorship agreement in 2023 with Williams racing
which has not delivered the expected commercial returns, as such, this has
been identified as an onerous contract. Under the terms of the sponsorship
agreement, the Group is contractually obligated to incur annual fees and
termination costs. Notice of termination has been provided, and the contract
will be exited at the earliest available opportunity; 31 December 2025. The
total cost recognised within adjusting items includes the costs incurred from
1 January 2024 plus any unavoidable committed costs to 31 December 2025.
The major classes of assets and liabilities classified as held for
distribution as at 31 December are as follows:
31 December
2024
£'000
Assets
Intangible assets 149,490
Property, plant and equipment 176,979
Right-of-use assets 232,222
Investments 1,400
Deferred tax asset 2,705
Inventories 8,370
Trade and other receivables 101,924
Other financial assets 300
Cash and cash equivalents 88,979
Total assets held for distribution 762,369
Liabilities
Lease liabilities 267,929
Provisions 21,795
Deferred tax liability 503
Contract liability 12,236
Current tax liability 219
Trade and other payables 286,990
Total liabilities held for distribution 589,672
Net assets directly associated with distribution group 172,697
Amounts included in reserves directly associated with disposal group (3,155)
The net cash flows incurred by discontinued operations were as follows:
2024 2023
£'000 £'000
Operating 18,113 (20,201)
Investing (80,290) (49,257)
Financing (35,785) (27,099)
Net cash outflow (97,962) (96,557)
b. THG Ingenuity - Related party transactions
The amounts recognised within the major classes of assets and liabilities
classified as held for distribution in relation to the leases with Propco for
discontinued operations in the year are as follows:
2024
£'000
Right-of-use asset 18,784
Lease liability 23,920
The amounts recognised within the results of THG Ingenuity in relation to the
leases with Propco for discontinued operations in the year are as follows:
2024 2023
£'000 £'000
Depreciation arising on right-of-use assets 7,117 7,780
Expense recognised in financing costs 5,274 6,145
Impairment arising on property plant and equipment - 9,663
The table below gives further detail around the leases in place for
discontinued operations:
Residual lease 2024
term date Rent
Number of properties divestment £'000
10 0-4 years 8,383
2 18-24 years 1,700
12 10,083
Fair value assessment of dividend liability
Under IFRIC 17 'Distributions of Non-cash Assets to Owners', a liability to
pay a non-cash dividend is measured at the fair value of the assets and
liabilities to be distributed when the dividend is appropriately authorised
and it is no longer at the entity's discretion. The assets and liabilities to
be distributed are the THG Ingenuity business.
The dividend liability was considered to be appropriately authorised on 27
December 2024 following shareholder approval and has been recognised within
the statement of financial position at 31 December 2024. The settlement of the
dividend liability took place on the date of the demerger on 2 January 2025.
The resulting gain on demerger will therefore be recognised within the FY 2025
financial statements. This gain is calculated as the difference between the
fair value and the book value of the attributable net assets. As this is a
material, non-recurring transaction, it will be recognised within adjusted
items.
We have determined the fair value of the THG Ingenuity business by considering
the requirements within IFRS 13 'Fair value measurement'. We concluded that
there was not an observable market price available for the stand-alone THG
Ingenuity business on the basis that it was part of a larger listed Group
prior to demerger and became a private limited company post-demerger.
The uncertainties over future cashflows meant that this was best achieved by
considering the underlying assets and liabilities as a basis for then
comparing to similar market transactions and valuations. Therefore, the fair
value of THG Ingenuity has instead been derived using a combination of the
valuation techniques outlined in IFRS 13 being; the market approach, the cost
approach and the income approach. The measurement of the dividend liability
is a level 3 fair value measurement. The material assets and liabilities which
were valued to assess the overall value of the business are as follows:
Asset/ liability Method Key assumptions Hierarchy
Intangible assets Primarily relating to the capitalised platform development costs · Total hours and number of developers to rebuild the platform Level 3
Valued on a replacement cost basis (using the cost approach) · Rates per hour If the total hours to or number of developers to rebuild the platform, or the
rate per hour increased / decreased by +5% / -5% the fair value would change
by +/- c.£17m respectively.
Property, plant and equipment Primarily relating to fit-out of fulfilment centres including specialist · Benchmarking of cost to similar fit outs and specialist equipment Level 2
automation equipment.
· Condition and location of assets
· Useful economic lives
Valued on a market approach
Right-of-use assets Valued on a market approach · Market rents for similar properties Level 2
Working capital assets and liabilities Valued on a line by line basis · Recoverability of trade and other receivables Level 2
· Net realisable value of inventories
· Completeness of trade and other payables
· Cash and cash equivalents were considered to be carried at their
fair value given the nature of the balance
In determining the fair value, significant judgement exists in relation to the
valuation techniques used and significant estimation exists in relation to the
key inputs into the models. Therefore, a fair value range was calculated. This
range is sensitive to changes made to the key inputs described above.
When concluding on an appropriate fair value within that range we considered
the valuation derived in the context of alternative data sources, such as
relevant multiples on revenue and earnings. This resulted in the following
transaction values:
£'000
Fair value of THG Ingenuity 501,331
Carrying value of net assets and liabilities distributed (note 9) 172,697
Intercompany receivable due from THG plc(1) 121,457
Gain to be recognised on 2 January 2025 within THG PLC 207,177
1. The carrying value of the net assets and liabilities held for
distribution excludes intergroup balances that are eliminated on
consolidation. The carrying value of assets distributed as part of the THG
Ingenuity business will also include £121m of intergroup receivables.
It is important to highlight that this fair value has been prepared on a
different basis to the valuation of THG Ingenuity reported in the Shareholder
Circular. The valuation reported in the Board-approved Shareholder Circular
was based on a pro-rata of the market capitalisation of the listed Group,
resulting in an £88 million valuation. This valuation is not an observable
market price and as such, was not in line with the requirements of IFRS 13.
These two valuations are prepared on different bases and therefore are not
comparable.
10. Inventories
2024 2023
£'000 £'000
Goods held for resale 200,533 225,600
Raw materials 60,301 67,427
Goods in transit 4,537 4,116
265,371 297,143
Goods in transit relate to goods whose control is still to be transferred to
the customers as of the reporting date. The cost of inventories recognised as
an expense and included in cost of sales amounted to £1,017.1m (2023:
£1,015.5m). The value of inventories written down and recognised as an
expense in the statement of comprehensive income in the year was £38.5m
(2023: £20.4m) including adjusted items. Within goods held for resale is a
£1.3m (2023: £2.4m) right to recover asset which represents the carrying
value of inventory expected to be received back from customers as returns.
11. Trade and other receivables
2024 2023
£'000 £'000
Trade receivables 34,578 110,912
Less: loss allowance (1,122) (2,056)
Net trade receivables 33,456 108,856
Prepayments 13,253 28,483
Accrued income 22,875 36,428
Other taxation and social security 40,374 59,185
Other receivables 37,314 38,830
147,272 271,782
Trade and other receivables are principally denominated in sterling.
12. Cash and cash equivalents
2024 2023
£'000 £'000
Cash and cash equivalents 308,622 416,162
Cash and cash equivalents of £89.0m that left the Group on demerger have been
classified as held for distribution at 31 December 2024. See note 9 for more
information.
Cash and cash equivalents includes amounts receivable of £1.8m (2023: £3.5m)
from banks and £9.9m (2023: £16.7m) from payment providers, for credit and
debit card transactions. Such amounts clear the bank shortly after the
transaction takes place.
13. Trade and other payables
2024 2023
£'000 £'000
Trade payables 246,035 368,855
Accruals 69,007 182,922
Other taxation and social security 27,485 82,351
Government grants - 2,343
Contingent consideration on acquisitions - 1,879
342,527 638,350
14. Interest-bearing loans and borrowings
2024 2023
£'000 £'000
Current
Bank borrowings 112,785 29,026
Lease liabilities 10,293 43,537
123,078 72,563
Non-current
Bank borrowings 491,782 621,011
Lease liabilities 31,077 301,440
522,859 922,451
Bank borrowings relate predominantly to the seven-year euro term loan B,
undrawn five-year revolving credit facility and an incremental facility. The
revolving credit facility is provided by Barclays, HSBC, Santander, Citibank,
NatWest and JPM. The term loan B carried an interest rate of 4.50% plus
EURIBOR and the revolving credit facility's interest rate is SONIA. This loan
is provided by the Group's existing lenders and carries a base rate of Daily
RFR (SONIA). The floating element of the term loan B is hedged by interest
rate derivatives. Management note that EURIBOR is being reformed as a
benchmark rate and are in dialogue with its lending and hedging partners to
minimise the impact on the Group as transition occurs. If interest rates moved
by 100bps, the Group's loss before tax would be c.£5.1m higher/lower (2023:
c.£7.3m) and the subsequent move on the derivative valuation would cause
equity to be c.£7.3m higher/lower (2023: c.£15.5m) as a result of the same
move. Post year end, the Group refinanced its facilities.
Net debt consists of loans and lease liabilities, less cash and cash
equivalents. For the purpose of the Group's net debt calculation, loans that
are denominated in foreign currency are translated at the effective hedged
rate where applicable. Net debt is an alternative performance measure and is
not defined under IFRS. A reconciliation to the most directly comparable IFRS
measure is included below:
2024 2023
£'000 £'000
Loans and other borrowings (604,567) (650,037)
Lease liabilities (41,370) (344,977)
Cash and cash equivalents 308,622 416,162
Sub-total (337,315) (578,852)
Adjustments:
Retranslate debt balance at swap rate where hedged by foreign exchange (8,306) 15,653
derivatives
Net debt (345,621) (563,199)
Net debt before lease liabilities (304,251) (218,222)
15. Leases
Set out below are the carrying amounts of the right-of-use assets recognised
and movements during the period:
Motor Plant and Land and
vehicles machinery buildings Total
£'000 £'000 £'000 £'000
As at 1 January 2023 210 164 293,935 294,309
Additions 1,920 (3) 59,475 61,392
Depreciation (note 3) (568) (45) (38,809) (39,422)
Lease modifications 98 - (10,377) (10,279)
Currency translation differences (4) (3) (2,358) (2,365)
As at 31 December 2023 1,656 113 301,866 303,635
As at 1 January 2024 1,656 113 301,866 303,635
Additions - - 25,057 25,057
Depreciation (note 3) (614) (45) (38,263) (38,922)
Lease modifications (3) - (18,531) (18,534)
Disposals - - (213) (213)
Transfers - - (950) (950)
Currency translation differences (4) (1) (1,147) (1,152)
Impairment - - (7,372) (7,372)
Transfer to assets held for distribution (807) (35) (231,380) (232,222)
As at 31 December 2024 228 32 29,067 29,327
Set out below are the carrying amounts of lease liabilities and the movements
during the period:
2024 2023
£'000 £'000
As at 1 January 344,977 334,376
Additions 15,950 56,708
Accretion of interest 15,867 14,641
Payments (47,476) (49,487)
Lease modifications (17,864) (8,864)
Disposals (213) -
Currency translation differences (1,942) (2,397)
Transfer to liabilities held for distribution (267,929) -
As at 31 December 41,370 344,977
Current 10,293 43,537
Non-current 31,077 301,440
The Group had total cash outflows for leases of £47.5m in 2024 (2023:
£49.5m).
The following are the amounts recognised in the year in the consolidated
statement of comprehensive income:
2023
2024 (Restated)(1)
£'000 £'000
Depreciation expense on right-of-use assets 11,732 9,801
Interest expense on lease liabilities 1,558 1,226
13,290 11,027
1. Restated for discontinued operations (refer to note 9).
16. Earnings per share
The following table reflects the income and share data used in the basic and
diluted EPS calculations:
2023
2024 (Restated)(1)
Loss for the financial year - continuing operations (£'000) (180,533) (107,962)
Loss for the financial year - discontinued operations (£'000) (145,607) (140,410)
Total loss for the financial year (£'000) (326,140) (248,372)
Weighted average number of Ordinary Shares for basic EPS 1,368,632,773 1,296,925,602
Basic and diluted EPS (£'s) (0.24) (0.19)
Basic and diluted EPS - continuing operations (£'s) (0.13) (0.08)
Basic and diluted EPS - discontinued operations (£'s) (0.11) (0.11)
1. Restated for discontinued operations (refer to note 9).
In 2024, if the impact of impairment charges in the year was removed, the
Basic and Diluted EPS would have been £(0.19).
The basic loss per share has been calculated by dividing the loss attributable
to the Group by the weighted average number of Ordinary Shares in issue.
Earnings per share has been calculated with respect to total loss for the year
for the Group, including both continuing and discontinued operations (see note
9).
The diluted loss per share has been calculated by adjusting the weighted
average number of shares for the effects of the D, E, F and G Shares assuming
full vesting of all potentially dilutive shares.
Basic and diluted earnings per share are equal since the effect of all
potentially dilutive shares outstanding was anti-dilutive.
17. Related Party Transactions
The Directors' interests in the Ordinary Share capital of the Company at the
balance sheet date are detailed below:
Ordinary Ordinary
Shares Shares
2024 2023
£ per share Number Number
M J Moulding 0.005 269,702,708 249,294,545
M J Moulding 1.000 360 360
J A Gallemore 0.005 4,216,826 4,216,826
J A Gallemore 1.000 3,174 3,174
D Sanders 0.005 487,487 21,926
C Allen 0.005 2,942,000 2,400,000
G Kent 0.005 53,600 -
D Moore 0.005 53,143 -
S Farr 0.005 171,743 67,397
H Jones 0.005 134,084 -
I McDonald(1) 0.005 2,691,419 2,505,943
280,456,544 258,510,171
1. I McDonald stepped down from the Board on 31 March 2024.
In addition to the shareholdings noted above, the Directors had the following
interests in vested shares issued under previous incentive arrangements at the
balance sheet date. These shares carry no voting rights.
2024 2023
Subscription/ Subscription/
Date of exercise price exercise price 2024 2023
award £ £ Number Number
M J Moulding Dec-19 0.23 0.23 43,641,266 43,641,266
M J Moulding Aug-20 0.33 0.33 20,197,808 20,197,808
M J Moulding Aug-20 0.28 0.28 7,733,792 7,733,792
J A Gallemore Dec-19 0.23 0.23 185,476 185,476
J A Gallemore Aug-20 0.33 0.33 2,666,963 2,666,963
J A Gallemore Aug-20 0.28 0.28 4,000,537 4,000,537
I McDonald(1) Dec-19 0.23 0.23 - 185,476
78,425,842 78,611,318
1. I McDonald stepped down from the Board on 31 March 2024.
Details of unvested awards granted to the Directors under the 2024 LTIP scheme
are provided in the Directors' Remuneration Report.
In 2024, the Group has provided interest free loans to the Directors of £0.6m
(2023: none) for them to subscribe for shares as part of the employee benefit
scheme which remain outstanding at the balance sheet date. A further £0.3m of
interest-free loans provided in previous years for the same purpose also
remains outstanding at the balance sheet date.
The Group has in place an agreement on commercial terms with Moulding Capital
Limited to provide property, facilities and project management services to the
entity and its subsidiaries. This agreement generated £235,382 (2023:
£307,720) for the Group, recognised within administrative expenses.
Prior to the IPO which took place in September 2020, THG divested the Propco
Group, an entity now wholly owned by the Group's CEO. The Propco Group owns
property assets occupied and utilised by THG and its operating businesses.
The amounts recognised on the Group's balance sheet in relation to the leases
with Propco for continuing operations in the year are as follows:
2024 2023
£'000 £'000
Right-of-use asset 12,742 154,682
Lease liability 24,025 174,457
The amounts recognised on the Group's statement of comprehensive income in
relation to the leases with Propco for continuing operations in the year are
as follows:
2024 2023
£'000 £'000
Depreciation arising on right-of-use assets 2,764 2,286
Expense recognised in financing costs 991 1,052
Impairment arising on property, plant and equipment 7,372 -
The table below gives further detail around the leases in place for continuing
operations:
Residual lease FY 2024
term date Rent
Number of properties divestment £'000
5 0-4 years 470
10 9-10 years 1,770
1 18-24 years 650
16 2,890
Refer to Note 9 for further details on related parties in relation to
discontinued operations.
(#_ftnref1) ( 1 )CCY defined as constant currency basis
(#_ftnref2) ( 2 )YoY defined as year-on-year statutory sales growth
(#_ftnref3) ( 3 )Lfl revenue (c.-3%) is adjusted for Easter, leap year phasing
and for Beauty territories where the model has been substantially changed
(Asia and Europe)
(#_ftnref4) ( 4 )The non-GAAP measure which is defined as Earnings Before
Interest, Taxes, Depreciation, Amortisation, share-based payments, adjusting
items and discontinued categories in respect of THG Beauty and THG Nutrition
net of central costs.
(#_ftnref5) ( 5 )The non-GAAP measure which is defined as Earnings Before
Interest, Taxes, Depreciation, Amortisation, share-based payments, adjusting
items and discontinued categories in respect of THG Beauty, THG Nutrition and
THG Ingenuity net of central costs.
(#_ftnref6) ( 6 )Including £89.0m of cash held for distribution to THG
Ingenuity.
(#_ftnref7) ( 7 )YouGov Brand Tracking, February 2025. Almost 1 in 4 UK
consumers in our target audience spontaneously name Myprotein when asked to
name a sports nutrition brand. Myprotein is the most preferred brand among 12
UK sports nutrition brands measured.
(#_ftnref8) ( 8 )Excluding discontinued categories
9 (#_ftnref9) All numbers and tables subject to rounding throughout this
report.
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