THG losses widen despite revenues passing £1bn

THG has revealed its losses widened to £89.2m in the first half of the year to 30 June, despite seeing revenues surpass £1bn.

The online retailer said the loss reflected “consumer price protection investment strategy”, however its medium-term guidance reiterated with cost efficiencies and commodity price improvements should support margin recovery in H2 and 2023.

Group revenues hit £1.1bn during the period, up +12.3% YoY, which reflects a lower growth rate vs the prior period due to lockdown comparatives and “market uncertainty across consumers and corporates linked to macro-economic events”.

It added that Beauty was the key driver at +20.0% attributed, in part, to the impact of the Cult Beauty and Bentley Labs acquisitions.

Matthew Moulding, CEO of THG, 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.”

He added: “Against the tough macroeconomic 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 cashflow positive in 2024.”