THG paints confident outlook after returning to sales growth

(Sharecast News) - Ecommerce conglomerate THG has reiterated full-year guidance after reporting a return to growth in the second quarter, with further improvements in revenues expected from both sides of the business in the second half. THG, which owns brands like Myprotein, Cult Beauty and Glossybox, saw first-half sales across the business fall 2.6% at constant currencies (CCY), as a 3.1% increase in the Nutrition division was offset by a 5.9% decline in the larger Beauty division.

However, the company reported a turnaround in the second quarter, with CCY sales growing by 0.9% after dropping 6.1% in the first quarter.

Looking ahead, THG expects Beauty and Nutrition CCY sales to rise by 1-3% and 10-12% in the second half, respectively.

"I'm really pleased at how THG has gained momentum throughout the first half and into Q3. A slower start to the year in Beauty, alongside record whey prices in Nutrition, initially held back performance, but we saw clear improvement in Q2, in particular supported by Myprotein offline retail and licensing sales," said chief executive Matthew Moulding.

"Our momentum is positive and Q3 will be our strongest trading period of the year so far, underpinning our confidence in the outlook."

Results for the six months to 30 June, which were well flagged in recent trading updates, showed revenues of £783.4m, down 7.6% on last year on a reported basis, while adjusted EBITDA sank 35.3% to £24m.

On the bright side, net debt reduced to £321.4m by period-end, from £350.5m the year before, and fell further to £220m as a result of the recent sale of its Claremont Ingredients subsidiary.

Shares were down 0.6% at 28.5p in early deals on Thursday.