THG returns revenue to growth in final quarter as losses halved

THG, the online retail group which counts Cult Beauty and Lookfantastic among its brands, said its revenue started growing again in the last three months of 2023 as it halved its losses over the year.

The business said annual revenue was down 8.7% to £2 billion, but returned to growth in the final quarter. Meanwhile its pre-tax loss went from £549.7 million to £252 million.

The business is split into its nutrition, beauty and Ingenuity arms – the latter of which provides e-commerce technology to third-party brands – all of which saw revenue decline during the year.

It made 45.8% of its sales in the UK, up from 42.9% the year before, and called the country its “key growth market”.

CEO Matthew Moulding 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.

“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.

“The return to group revenue growth in Q4 was especially pleasing, and this momentum has continued into 2024.”

The results come on the back of a turbulent year for THG. Last April the business announced that it had been approached by private equity giant Apollo, which was interested in perhaps taking the group private. But a little under a month later the firms announced that their talks had ended without a deal being reached.

Shares in THG had soared when the interest from Apollo was announced, but dropped back down to their previous levels after it was withdrawn. The board said Apollo had not adequately valued THG.

About a month later founder Moulding gave up his rights to veto any proposed takeover of the group, two years after promising to do so. This had been one of the issues that shareholders concerned about corporate governance had pointed to when they criticised the company.

The business also reduced its headcount in 2022 and 2023 by around 2,500 people.

However it remained acquisitive and in December it acquired the squalane based skincare brand Biossance (main image) from collapsed US beauty group Amyris.