THG Shares Rise as Revenue Increases, Weighs Ingenuity Demerger

Consumer brands group THG (LON: THG) has seen its shares rise by more than 6% at the open on Tuesday following the release of its interim results for the half-year ended 30 June 2024.

The company reported a 2.2% increase in continuing revenue to £911.1 million, with a 1.6% rise in continuing adjusted EBITDA to £52.3 million, driven by strong performances in its Beauty and Ingenuity segments.

Despite facing transitory headwinds in its Nutrition business, THG's overall financial health remains robust.

Matthew Moulding, CEO of THG, expressed satisfaction with the group's progress, highlighting the strong performance of Beauty and Ingenuity.

He also acknowledged the challenges faced in Nutrition but expressed confidence in a return to revenue growth in the coming months.

“The Group continued to deliver against its strategic priorities through H1, with the performances of both Beauty and Ingenuity particularly strong,” said Moulding. “Reporting another 6-month period of continuing sales and adjusted EBITDA growth was especially pleasing given the FX headwinds suffered within our Nutrition business, which negatively impacted H1 profitability by a further c.£5m.”

In addition to its financial performance, THG announced plans to transfer to the Equity Shares (commercial companies) category and is exploring options to demerge its Ingenuity business. The company said it is “actively undertaking detailed work to review potential structures to facilitate the demerger of THG Ingenuity.”

The demerger could result in what the company describes as a “highly cash-generative” group, focusing on its core Beauty and Nutrition segments.

The demerger of Ingenuity is seen as a strategic move aimed at maximising shareholder value. While the timeline for the demerger remains uncertain, THG said it is actively working on the necessary structures and has obtained the required tax clearances.

The news has seen THG's shares react positively. At the time of writing, the stock is up 6.15% at 68.2p, its highest level since July.