16th Sep 2021 10:42
(Alliance News) - THG PLC on Thursday said it will spin-out and list its beauty unit, as it announced a wider first-half loss and left full-year guidance unchanged.
Shares were down 3.8% to 614.00 pence in London on Thursday morning.
THG Beauty, the company's biggest unit by revenue and which includes brands such as ESPA and retailer Lookfantastic, will go public in the first half of 2022. It's the latest move in a wider corporate restructuring announced in May in which all key trading divisions will be separated in some form.
Following the Beauty IPO, SoftBank Group Corp will exercise an option to buy a 20% stake in e-commerce technology division Ingenuity for USD1.6 billion. THG will then explore an IPO or another structural option for that unit, "with the objective to maximise value for all shareholders".
THG's other main divisions are Nutrition, which makes supplements, and OnDemand, a marketing and sales service.
AJ Bell Investment Director Russ Mould said: "THG is banking on these businesses being ascribed more value by the market as separate entities and this is perhaps most pertinent to the Ingenuity arm, which has generated a lot of the excitement around the stock since its 2020 listing."
In the first half of 2021, THG's revenue grew 42% year-on-year to GBP958.8 million from GBP675.7 million. But its pretax loss widened to GBP81.3 million from GBP49.9 million.
That was partly driven by a GBP38.1 million writedown to the value of Softbank's option to buy a 20% stake in Ingenuity. The market value of Ingenuity is now considered to be more than the price to be paid by SoftBank, leading to the writedown.
The option is part of the financial and trading partnership between THG and SoftBank announced in May, under which both firms pledged to explore joint commercial arrangements.
THG maintained its guidance for 2021 revenue growth between 35% and 38%. Margin and capital expenditure forecasts were left unchanged.
"I am delighted to announce a strong first half performance across all divisions, as we continue to invest significantly in support of our strategic growth ambitions," Chief Executive Matthew Moulding said.
"We are pleased to have already established multiple live commercial partnerships between the SoftBank portfolio and our Ingenuity platform. We continue to see an acceleration in levels of enquiry from global enterprises looking to leverage the Ingenuity platform, and I believe the global growth opportunity for Ingenuity to be unparalleled."
By Ivan Edwards; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
Thg