THG is conducting a detailed evaluation of possible demerger structures for its Ingenuity service.
- The company aims to streamline its operations into two main entities: THG Beauty and THG Nutrition.
- There is no fixed timeline for the demerger, but necessary tax clearances have been approved.
- Final approval for the demerger will require shareholder consensus and further details will be shared in due course.
- Interim results show a revenue drop yet a slight EBITDA growth, framing the backdrop of the demerger announcement.
THG is actively engaged in reviewing potential structures to facilitate the demerger of its Ingenuity service. This strategic move coincides with the company’s commitment to maximizing shareholder value, as announced during the disclosure of its half-year financial results. Although the demerger’s timeframe remains uncertain, the necessary tax clearances have already received approval from HMRC.
Following the possible demerger, THG intends to focus on its core businesses, THG Beauty and THG Nutrition. These segments are lauded as globally leading consumer businesses known for their profitability and ability to generate cash, positioning them well for potential dividend payouts.
The company has advised that any demerger proposal will need to receive shareholder approval. THG has assured that shareholders will be provided with comprehensive information regarding the proposed demerger in due course, ensuring transparency throughout the process.
Financially, THG’s interim results for the half-year ending June 30, 2024, show a 3.6% decline in total revenue, amounting to £934 million. Despite the downturn, there was a modest adjusted EBITDA increase of 1.6%, reaching £32.6 million. This financial context underscores the strategic rationale behind the demerger consideration.
In addition to the demerger discussions, THG has entered a strategic partnership with Frasers Group. This collaboration includes the integration of Frasers Plus into the Ingenuity platform and the use of THG’s courier management services in Australia, highlighting THG’s ongoing efforts to enhance operational synergies and efficiency.
The potential demerger of THG’s Ingenuity service underscores a pivotal restructuring aimed at strategic growth and shareholder value maximization.
