18th Apr 2023 10:08
(Alliance News) - THG PLC shares fell back on Tuesday, after it reported a widened loss in 2022 and lower revenue in the first quarter of the new year, amid takeover talks.
THG shares were down 8.1% at 88.04 pence each in London on Tuesday morning, returning some of the 32% gained on Monday on confirmation of a buyout proposal from Apollo Global Management Inc. The stock remains well below its 2020 debut price of 500p.
The e-commerce retailer reported that revenue in 2022 rose by 2.7% to GBP2.24 billion from GBP2.18 billion a year earlier, but pretax loss ballooned to GBP549.7 million from GBP186.3 million.
Adjusted earnings before interest, tax, depreciation and amortisation of GBP64.1 million was in line with guidance but more than halved from GBP161.3 million the year before.
Looking ahead, THG expects full-year revenue growth across continuing divisions of low to mid-single digit. Adjusted Ebitda is expected to be in line with the company consensus, with a significant weighting to the second half of the year.
In the first quarter of 2023, revenue from continuing operations fell 5.6% to GBP457.4 million, with total revenue down 8.6% to GBP469.4 million.
"Whilst sales growth was negative during the period this was largely as planned, as a result of prioritising higher-margin sales," THG said.
On Monday, THG said it had received a buyout proposal from US private equity firm Apollo. THG noted that it is "a highly preliminary and non-binding indicative proposal", but did not disclose the terms of the proposal.
Apollo now is required to announce its intention to make an offer or walk away by May 15.
THG on Tuesday provided no update on the Apollo takeover proposal; however it said that its intention remains to move to the premium segment of the London Main Market.
Back in 2021, THG had said it planned such a move, but a year and a half later, it remains a standard listing. The 'golden share' held by Matthew Moulding, the founder and chief executive, prevented a premium listing at the time of its initial public offering in 2020. This means THG is excluded from FTSE UK indices.
On Tuesday, THG said the rights attached to Moulding's 'golden share' will be ceased in September.
"We continue to make good progress on executing our strategy of building a leading digital-first consumer brands group, powered by our own technology and global fulfilment operations," said CEO Moulding.
"The challenging macro and inflationary environment required decisive action across the business with around GBP100 million of efficiency savings delivered. A much-improved outlook on many key cost inputs gives us confidence in an improved financial performance as the year progresses."
By Sophie Rose; Alliance News reporter
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