I don’t get this one…diworsification? I don’t see how this acquisition could improve any of their business areas, already quite diversified.
Looks like the deal has been done.
interesting diversification for THG…
Would be interested to see what they paid.
Obviously doesn’t seem a good fit but hey they must have good rational and plans for it
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I think it’s a shame if they sell that part of the business. I met THG through MyProtein and I think its the most valuable asset they have. Kind of have to agree with Matt on this one. UK is selling everything on the cheap to the big ones…
I would be surprised if Matt does sell it as he has a lot of passion for the brand and he still has belief in the brand becoming much bigger so it would need to be a hefty premium for him to let it go and i personally agree.
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The article misuses the term “rebrand”, a visual identity refresh is not a rebrand. Rebranding Myprotein to something else would be a big deal, changing the visual identity is just part of growing a business… and the use of “amid” in the title is poor because, per the article, the work to evolve the visual identity has been ongoing for 18 months. Presumably, THG talked about their work to evolve the Myprotein brand to demonstrate how committed they are to the business and somehow the article title has managed to communicate the opposite. Bad article.
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Interesting story in the Telegraph today about THG possibly listing the MyProtein business on the US stock exchange
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For my fellow bag holders, something’s afoot
The London-listed e-commerce group could announce as soon as Tuesday that it is considering a spin-off of its logistics arm, Sky News learns.
THG, the London-listed e-commerce group behind beauty brands such as Lookfantastic, will this week signal to investors that it is exploring plans to spin off Ingenuity, its technology services arm.
Sky News has learnt that THG, which also owns a range of brands in the health and nutrition sector including MyProtein, could announce as early as Tuesday that it is considering the move, which would transform it into a cash-generative dividend stock.
It would be the latest in a series of plans studied by THG’s board, which is chaired by Lord Allen of Kensington, to inject momentum into its share price after a fractious ride as a public company.
Matt Moulding, THG’s founder, has been a vocal critic of investors and the media, as well as London’s listing rules, which he has argued have stymied technology companies like the one he co-founded two decades ago.
A demerger of Ingenuity, which serves clients such as Frasers Group, one of Britain’s biggest high street empires, would allow THG to retain the material free cashflow generated by its other operations.
This could, according to analysts, pave the way for it to pay its maiden dividend to shareholders.
THG’s results for its last financial year revealed that excluding Ingenuity, it generated more than £80m of free cashflow.
One analyst said this could rise to more than £100m in the near term as the impact of inflation eases and profitability restores to historic levels.
Repositioning THG, which also owns the freesheet business newspaper City AM, as a dividend-yielding stock would be welcomed by many institutional investors.
The company, previously known as The Hut Group, became one of Britain’s most valuable tech start-ups, raising hundreds of millions of pounds from blue-chip investors such as BlackRock, the world’s biggest asset manager.
It went public in 2020 at a valuation of over £5bn, since when it has explored a number of significant transactions, including being taken private again.
One source said THG was also likely to announce plans to recategorise its shares on the recently reformed premium segment of the London stock market.
This would make the company eligible for index inclusion and bolster liquidity in the stock.
As a simplified wellness and beauty brand owner, THG’s board is said to believe that it would also be an easier stock for potential investors to understand.
The prospective demerger of Ingenuity would probably see the technology and logistics division become a privately held, rather than listed, company, reflecting the difficult time that capital-hungry tech stocks have had on the London market.
Ingenuity, which has also counted Homebase among its clients, already has its own leadership team, with Alastair Crane appointed as chairman last year.
As a long-term infrastructure technology player with 4,000 staff and 12 distribution centres globally, Ingenuity is likely to require significant additional funding as a standalone company.
One investor said Ingenuity’s cash consumption and three-to-five-year horizon before it breaks even meant that private shareholders were likely to be the right stewards of the business during that period.
THG declined to comment on Monday evening.
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I might be wrong but whats the bet that Matt Moulding is trying to demerge the Inginuity business so he can try and buy it on the cheap as Matt has for the last few years heavily favoured the inginuity business so my guess is he wants to get that on the cheap.
I may be and hope I am wrong but as we have seen before Matt only does things if he can see a huge benefit for himself.
Interim results for the half-year ended 30 June 2024
Group continuing revenue and adjusted EBITDA growth of +2.2% CCY and +1.6% respectively
Record H1 adjusted EBITDA across Beauty and Ingenuity helping to offset transitory headwinds in Nutrition
Improving momentum in Nutrition, expected to exit Q3 in revenue growth
THG PLC to apply to transfer to the Equity Shares (commercial companies) (“ESCC”) category
Progressing options to demerge Ingenuity, resulting in a highly cash generative group
Proposed application to transfer to the Equity Shares (commercial companies) category
of the London Stock Exchange
Progressing options for the demerger of THG Ingenuity from THG PLC
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The market doesn’t seem to like todays trading update as per usual with this one.
I haven’t been back on this topic since we went from over £5 to like 40 pence or something lol
Its a mixed bag on the results some positive and some not so much.
The bit I think is the biggest thing on the share price fall is the demerger of ingenuity business as this may be a negative on the share holders as according to the news its unlikely to be a listed company and will be a private company and in my view could lead to it being sold off cheap.
But I think the markets wants more definitive news on it before it takes a positive or negative view on the demerger
I think the fact after the rebrand of nutrition sales falling is a bit of a worry. I agree about demerging ingenuity hopefully it isnt done in a way that denies share holder fair value. Thg always seems to be a jam tomorrow company re results these ones fit the pattern.
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Good insights posted above. MM always appears to miss an open goal in regards to earning calls and forecasts.
The demerger news I hope wasnt rushed out in order to cover for the weak results, especially on nutrition. All the years of moaning about the LSE hasnt paid off for MM or shareholders. We’re not going to delist, or relist in the states. We will go into the ‘premium’ standard market, but what is missing is any kind of concrete timetable, as per usual.
12% down yesterday and so far 5% down today. This just isnt good enough.
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