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LookFantastic and MyProtein owner, THG, has reported that its losses before tax have narrowed to £252m during the year ending 31 December 2023 from £549.7m in the year prior.
The news comes despite total group revenues falling 8.4% after the group’s decision to “discontinue loss-making categories”.
In addition, the group’s continuing revenues of £1.9bn declined 2.8% as THG “prioritised profitable sales and territories”, which was reflected in the adjusted EBITDA improvement to £120.4m from £81.2m in the prior year.
While the UK was THG’s key growth market during the year, international sales remain a “significant” portion of group sales at 54.2%.
In addition, the group faced increased administrative costs primarily reflecting marketing cost inflation.
However, improvements in distribution costs were reduced year-on-year to 13.2% of revenues from 15.8% in 2022.
As the group entered FY24, revenues trends continued to improve, with notable momentum in beauty following the strategic changes made during last year.
As a result, operating cash flow is expected to remain strong, supported by profit growth and lower capex of between £100m to £110m, which THG expects will drive further free cash flow progress.
Matthew Moulding, CEO of THG, said: “In 2023, we made material progress against our strategic priorities, delivering significant profit growth following the support for our consumers through the cost-of-living crisis in 2022. This focus led to the group delivering record EBITDA after cash-adjusting items in 2023, higher than at the peak of the pandemic.
“Having completed our recent infrastructure investment programme, the group is now delivering operating leverage. Our fulfilment network is becoming increasingly optimised through a combination of robotics automation, AI and the onboarding of new Ingenuity clients utilising existing capacity.”
He added: “The return to group revenue growth in Q4 was especially pleasing, and this momentum has continued into 2024.”
