THG has drafted in new non-executive directors (NEDs) to improve its ongoing corporate governance issues as its operating losses widened and its profits more than halved.
The retailer appointed Gillian Kent and Dean Moore to its non-executive board the same day that operating losses deepened to £89.2m for the half-year ending 30 June, 2022.
Adjusted EBITDA dropped 60.2% to £32.2m, while gross margin slipped to 42.1% and net debts blew out to £225.6m.
THG reported a 12.3% increase in group revenues to just over £1bn. THG Beauty sales leapt 20% to £552.8m, THG Nutrition sales grew 1.1% to £332.1m, THG Ingenuity sales swelled 21.4% to £104.2m and On Demand sales slipped 1% to £51m.
Chief executive Matthew Moulding said: “I’m proud to report the group achieved record H1 revenues of £1.1bn, delivering 12.3% growth against a challenging global backdrop alongside a strong prior year performance during lockdown.
“The group continues to deliver significant infrastructure development, which in turn has supported market share growth through improved localised service as well as substantial operational savings. The first half of this year saw continued strong customer metrics, with active beauty and nutrition customers now 113% higher on a three-year basis.
“Our highly engaged, global customer base, with high repeat rates, is a key asset of the business. Recently achieving 10 million app downloads from launch in early 2020 further strengthens the group’s relationship with consumers and our first-party data advantage.
“Against the tough macro-economic backdrop, we have prioritised our loyal customer base over maximising near-term gross margins focusing on retention and growth of consumers. The strength, resilience and agility of our vertically-integrated business model, coupled with automation, has enabled us to significantly invest in price protection for consumers currently facing unprecedented cost-of-living challenges.
“Supporting our consumers through 2022 has been offset through reducing 2023 capex, with the board viewing this investment as yielding a better return for shareholders and consumers alike in the near-term.
“With a strong balance sheet and category-leading positions within substantial end markets that continue to benefit from long-term structural growth, we have confidence in our ability to deliver long-term value for shareholders and remain on track to be cash-flow positive in 2024.”
New directors
Gillian Kent joins THG’s non-executive board having held various senior roles at Microsoft, including managing director for MSN UK. She was also chief executive of Property Finder.
She holds non-executive roles at Mothercare, Marlow and Ascential.
Dean Moore is a chartered accountant and was previously chief financial officer at Cineworld Group, N Brown Group, T&S Stores and Graham Group. He was formerly non-executive chair of Tuxedo Money Solutions.
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