THG reports £2bn in revenue as company rejects ‘unacceptable’ takeover bids

The Hut Group (THG) has recorded an increase in full-year profits and revenues as it confirmed it had rejected a number of “unacceptable” takeover bids from businesses interested in buying the ecommerce firm.

For the financial year ended 31 December 2021,THG said it was “delivering well ahead” of its revenue and expansion targets and recorded sales at £2.2 billion and adjusted EBITDA of £161.3 million.

Sales at the ecommerce firm climbed 38% year-on-year and 95% over a two-year period.

THG Beauty also saw 49% growth, while its tech division, THG Ingenuity, was up by 42%. THG Nutrition sales also grew by a steady 17% last year.

For the three months ending 31 March 2022, THG sales advanced 17.2% to £520.2 million, despite “a particularly challenging prior year period impacted by Covid-related lockdowns”.

New customer acquisition and retention has been helped by the long-term trend towards ecommerce which was fuelled during the heights of the pandemic.

THG said it would aim to limit the impact of rising costs on its consumers by absorbing some of the cost pressures. It will also raise prices “at a lower rate to underlying input costs.”

The company also highlighted challenging factors such as the war in Ukraine, stating that this year’s profits are expected to be broadly flat with a 1% revenue impact from the ongoing conflict.

On the potential sale of the company, THG co-founder and chief executive Matt Moulding said: “You will all be aware that there has been significant speculation about possible third party interest in THG. I can confirm that the board has received indicative proposals from numerous parties in recent weeks.”

“The board has concluded that each and every proposal to date has been unacceptable, failing to reflect the fair value of the group.”

He went on to say that, alongside “significant revenue growth”, 2021 saw THG “acquire and successfully integrate a number of complementary businesses, deepening our vertical integration across both beauty and nutrition and expanding our reach to consumers across the globe”.

He described the operational resilience and performance of the Ingenuity infrastructure as a “highlight”, along with the opening of an automated warehouse at the Icon technology campus, which  delivered “material improvements and cost savings across [the] global storage and delivery infrastructure”.

“Our technology platform is now powering an expansive list of global brands across a multitude of sectors, and the number of third-party websites has almost doubled during the year,” he added.

The group hired former ITV boss Lord Charles Allen as non-executive chair last month following concerns about its corporate governance as Moulding held the roles of both chief executive and executive chair.

“Charles’ extensive boardroom experience will help the group continue to drive profitable and sustainable growth, and to meet the highest standards of corporate governance,” said Moulding.

“We remain confident in delivering our strategic growth plans for the year ahead and beyond, with full support from the board and our new chairman.”

THG shares have fallen 85% over the past year. The company is now valued at about £1 billion, well below the £5.4 billion valuation when it listed two years ago.

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