THG signs fulfilment deal with Holland & Barrett and sees Q4 sales growth
THG saw revenue growth of 1.1 per cent across the ‘golden quarter,’ it told markets this morning.
Group revenue hit £597.9m in the quarter, with sales across the full financial year ending in December at £1.98bn.
THG’s Q4 performance represented the best quarter of this financial year and the firm this morning hailed a “pleasing cyber performance” as well as an increase in automated deliveries, driving down costs.
THG, which is headquartered on the outskirts of Manchester and owns brands including Cult Beauty, The Hut and Coggles, said it had also seen free cash flow breakeven for the quarter delivered alongside around £125m of capex investments.
The firm’s Ingenuity arm announced this morning it had agreed a fulfilment deal in principle to partner with the UK’s leading wellness retailer Holland & Barrett on direct to consumer operation services.
That partnership alongside other deals this year with firms including L’Oreal and PepsiCo will add around £175m of incremental merchandise value in the next financial year.
THG, which owns MyProtein, said it expected record EBITDA in its nutrition arm following the normalisation of global commodity prices.
Guidance was maintained at £117m-plus EBITDA for financial year and 2024.
The firm also confirmed that its strategy “remains unchanged” to scale THG Beauty, THG Nutrition and THG Ingenuity from Britain with their own growth and capital platforms.
Matthew Moulding, CEO of THG commented: “2023 was a year that threw up many challenges for all businesses, and I’m delighted in how the Group not only responded to these challenges, but grew stronger through the year.
“A combination of automation and significant cost initiatives delivered in 2022, in addition to a receding inflationary environment, each played a key role in the Group delivering an expected record EBITDA performance after cash-adjusting items during 2023.”
Brokers at Liberum this morning said all three THG divisions were “turning the corner into growth” and said the outlook would power share price growth.