THG sees strong growth, company rejects multiple buyout approaches

THG sees strong growth, company rejects multiple buyout approaches

Online beauty and technology group THG reported its preliminary results for last year on Thursday, plus a Q1 trading update that showed it weathering the current inflation and supply chain storm fairly well.


But perhaps even more interesting is that CEO Matthew Moulding confirmed speculation that the company has had buyout approaches. However, it doesn’t look like it will be up for sale any time soon.

“I can confirm that the board has received indicative proposals from numerous parties in recent weeks [but] has concluded that each and every proposal to date has been unacceptable, failing to reflect the fair value of the group, and confirms that THG is not currently in receipt of any approaches,” he said.

“We continue to focus on delivering our exciting growth strategy across a number of large global sectors, and prepare to step up to the premium segment of the [London Stock Exchange] at the appropriate time.”


For the first three months of this year, it saw revenue of £520.2 million, up 17.2% against last year (YoY) and 87.9% over two years (2YoY).

It hailed “a strong result considering the particularly challenging comparable global lockdown period, with the long-term trend towards e-commerce continuing to support new customer acquisition and retention”.

THG Beauty delivered sales growth of 19.7% YoY to £264.7 million, with partnerships across leading brands “continuing to strengthen across the retail destination sites with 24 new partners joining the platform in Q1”.

Group apps continued to “drive improvements in order values and time between orders, with influencers also playing an important role in cost-efficient marketing”. They generated around 10% of total group D2C revenue for Q1 on a tracked basis.

Its key Ingenuity Commerce business that gets other brands online also had a good quarter. Ingenuity revenue was £51.9 million, up 281%. And Ingenuity Commerce revenue rose 47.9% to £11.8 million. 

In Q1, the number of live client websites was 202, up from 133 a year ago, with recurring revenue at 76% compared to 55%. 

THG said that while companies may be rethinking their capital spending due to current pressures, “digital transformation projects remain essential, reflected in the strength of the THG Ingenuity new business pipeline”.


Looking back at 2021, THG said that on a preliminary basis, revenue rose to £2.179 billion from £1.613 billion YoY. And the operating loss narrowed to £137 million from £481 million. 

Adjusted EBITDA rose to £161 million from £151 million. This represents a margin of 7.4% (down from 9.3%) reflecting cost headwinds in H2. In fact, the impact of these headwinds trebled in H2 relative to H1, but it believes “much of this pressure is short term and will dissipate over time”. 

As well as the one-year comparison on revenue, the company said that group revenue rose 95% on a constant currency basis 2YoY.

All divisions grew, with THG beauty performing “particularly well”. It saw revenues of £1.18 billion, representing 51% of the group’s total revenue compared to 47% in the previous year as strong organic sales growth was complemented by the acquisitions of Dermstore, BentleyCult

THG Ingenuity grew its revenues 42% YoY to £194 million with the Ingenuity commerce division growing 135%. Its revenue was up to £45.4 million and included 62% recurring revenue rather than 48% a year earlier. Recurring revenue includes SaaS licence fees, monthly brand-building fees, infrastructure service fees, revenue share and a number of additional services.

International sales accounted for 58% of the total, down from 61% a year earlier, after it saw very strong UK growth of 46%. This was helped both by organic growth and acquisitions.

Matthew Moulding said: “In our first full year as a public company, 2021 saw us scale revenue and expand our business model, well ahead of targets set at IPO. We delivered a record revenue performance for the year”. He added that on a two-year basis, THG has effectively doubled the size of the business.

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