THG has successfully raised £95.4 million, exceeding its original target of £75 million, to fund the spin-off of its Ingenuity tech division.
- THG’s CEO, Matthew Moulding, personally contributed £10 million to the fundraise, which attracted interest from both new investors and existing shareholders.
- Frasers Group, an existing shareholder, invested £10 million and is strengthening its partnership with THG.
- The demerger will streamline THG’s operations, focusing it as a global consumer beauty and nutrition group with improved financial metrics.
- THG reported varied financial performance across divisions, with overall revenue declining despite growth in specific sectors.
THG, the e-commerce enterprise, has secured £95.4 million in funding to facilitate the spin-off of its tech division, Ingenuity, surpassing the initial goal of £75 million. This move reflects the company’s commitment to reshaping its business structure and focusing on core areas.
The fundraising initiative saw a personal investment of £10 million from Matthew Moulding, the CEO of THG, underscoring his confidence in the strategic direction of the company. The round was oversubscribed, drawing substantial interest from new investors and bolstering support from existing shareholders.
Among the current shareholders, Frasers Group has made a notable £10 million investment. This investment supplements a broader partnership with THG, which includes a multi-year Ingenuity deal and the integration of Frasers Plus, a credit and loyalty platform, into THG’s services for its Beauty and Nutrition sectors. Additionally, Myprotein products are slated to launch in Sports Direct stores.
The planned separation of Ingenuity will simplify THG’s business model, enhancing its focus as a cash-generating entity in the global beauty and nutrition industries. The transformation is expected to improve THG’s balance sheet, capital expenditure, and cash flow outlook.
Concurrently, THG’s third-quarter trading statement highlights a complex financial scenario. While revenue in the Beauty and Ingenuity divisions rose by 2.3% and 15% respectively, the Nutrition division saw a significant decline of 13.1%. The company, however, noted a recovery in sales post-July, with September marking a high in Nutrition sales since the beginning of the year.
Despite a 5.2% drop in total revenue, THG’s CEO, Matthew Moulding, expressed satisfaction with the performance improvements within the Beauty and Ingenuity sectors, attributing this to recent operational restructuring. The successful branding overhaul of Myprotein is another positive outcome, alongside THG’s recognized contribution towards global sustainability efforts.
The company is strategically preparing for its busiest trading period, with a focus on network efficiencies to support Ingenuity clients and attract new customers.
THG’s strategic moves aim to streamline its operations and enhance financial performance amidst a challenging market environment.
