26th Mar 2026 10:32
(Alliance News) - THG PLC on Thursday said it enters 2026 "on the front foot with strong trading momentum", as it reported a sharp fall in debt and better-than-hoped earnings.
The Manchester, England-based online retailer of sports nutrition and beauty products said its pretax loss narrowed to GBP69.4 million in 2025 from GBP202.4 million in 2024.
Adjusted earnings before interest, tax, depreciation and amortisation fell 8.1% to GBP76.6 million from GBP83.3 million a year ago, though this was ahead of GBP74.3 million company-compiled market consensus.
Adjusted Ebitda margin narrowed to 4.5% from 4.8% a year ago, ahead of 4.3% market consensus.
Revenue fell 2.0% to GBP1.72 billion from GBP1.75 billion a year ago, in line with consensus. At constant currency, sales rose 2.3%.
Sales at THG Beauty, which includes brands such as Lookfantastic, fell 5.4% while THG Nutrition, which includes MyProtein, sales rose 5.0%.
THG said a strong second-half performance helped to offset a softer first half.
THG said it exited the year with 7.2% revenue growth in the fourth quarter, with this momentum continuing into the first quarter of 2026.
THG Beauty had its strongest fourth-quarter revenue growth performance since 2021, driven by Lookfantastic, up 16% in the UK and Ireland.
THG Nutrition grew in all four quarters in 2025 driven by a return to online growth and significant retail footprint expansion into over 40,000 doors.
"We enter 2026 on the front foot with strong trading momentum and a focus on material free cash flow delivery," Chief Executive Matthew Moulding said.
Shares on THG rose 7.7% to 33.88 pence each in London on Thursday.
Expectations for revenue and adjusted Ebitda in 2026 are unchanged and in line with consensus, THG said.
THG Beauty enters 2026 with "strong underlying revenue growth" ahead of the second half of 2025, with a "significant" improvement in US performance year-on-year.
Mid-to-high single digit revenue growth is expected to continue in THG Nutrition, driven by further expansions to Myprotein's offline and licensing footprint and multi-category new product launches.
Net debt is anticipated to reduce to between GBP110 million to GBP130 million from GBP233.0 million in 2025, itself down from GBP304.3 million in 2024.
This is before before any strategic asset disposals, reflecting a combination of free cash flow generation (anticipated to be GBP25 million to GBP50 million) and VAT repayments.
Debt reduction in 2025 was supported by GBP103 million in proceeds from the sale of Claremont Ingredients.
THG has made a retrospective claim for VAT which it has charged on powdered protein and collagen products and certain supplements in line with HMRC guidance.
However, THG pointed out a number of competitors have chosen to zero rate some products for VAT purposes, while a First Tier Tribunal ruling said that Sunwarrior protein powders qualify for 0% UK VAT.
THG said HMRC have stated they will provide a substantive update in relation to protein powders by the end of spring 2026.
A successful VAT claim would result in a cash payment of GBP78 million, THG said.
By Jeremy Cutler, Alliance News reporter
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