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(Alliance News) - Online retail platform operator THG on Tuesday reported strong revenue growth last year, but flagged a margin hit from foreign exchange movements.
Fourth-quarter revenue was GBP711.7 million, up 27% on a year ago and nearly double on a two-year basis. For 2021 as a whole, revenue rose 35% to GBP2.18 billion.
However, the beauty products retailer's full-year adjusted earnings before interest, tax, depreciation and amortisation margin is expected to be in the range of 7.4% to 7.7%, compared to market expectations of around 7.9%, after taking into account 90 basis points of adverse foreign currency movements, it said.
For 2022, the margin is expected to improve throughout the year, and revenue growth is seen in a region of 22% to 25% at constant currencies, slowing from the 38% achieved in 2021.
Revenue from Ingenuity Commerce - the e-commerce technology platform that THG offers to other retailers and that is expected to be a driver of company growth - remained a small part of the total at GBP15.4 million in the fourth quarter, though this was more than doubled from GBP7.3 million a year before.
For all of 2021, Ingenuity Commerce revenue was GBP45.4 million, up from GBP19.3 million in 2020 but still only 2.1% of total revenue.
THG Beauty remained the main revenue provider in 2021 at GBP1.12 billion, up 49% from GBP751.6 million.
THG said it has a "substantial pipeline of site launches within THG Ingenuity", and the company repeated its revenue guidance for the division in 2022 of GBP108.0 million to GBP112.0 million.
THG shares were down 4.7% at 176.80 pence early Tuesday, well below the 500p at which the stock debuted in September 2020.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.6% at 7,564.62
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Hang Seng: down 0.4% at 24,112.78
Nikkei 225: closed down 0.3% at 28,257.25
S&P/ASX 200: closed down 0.1% at 7,408.80
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US financial markets were closed on Monday for Martin Luther King Jr Day.
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EUR: flat at USD1.1401 (USD1.1405)
GBP: flat at USD1.3645 (USD1.3650)
USD: up at JPY114.81 (JPY114.60)
Gold: down at USD1,816.50 per ounce (USD1,818.80)
Oil (Brent): up at USD87.93 a barrel (USD86.01)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's key economic events still to come
1100 CET Germany ZEW indicator of economic sentiment
1000 EST US NAHB housing market index
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The UK unemployment rate unexpectedly edged down to 4.1% in the three months to November, having been forecast by analysts to remain steady at 4.2%. Annual growth in total pay - or including bonuses - was 4.2%, and regular pay, which strips out bonuses, rose 3.8%. These figures were as expected and marked a slowdown from the previous month. Both were below the annual UK inflation rate for November, which was 5.1%. The number of job vacancies in October to December 2021 rose to a new record of 1.2 million, an increase of 462,000 from its pre-coronavirus January to March 2020 level. There were 29.5 million payrolled employees in the UK in December, up 184,000 on November and over 400,000 above pre-virus levels. "All regions are now above pre-coronavirus levels, with Scotland having the largest percentage increase on the month," the UK Office for National Statistics said.
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Downing Street has denied claims by Dominic Cummings that UK Prime Minister Boris Johnson was told in advance staff were holding a drinks party in the No 10 garden in the midst of the first Covid lockdown. Johnson's former chief adviser said he was prepared to "swear under oath" that Johnson was lying when he told MPs he had not known beforehand about the "bring your own bottle" event on May 20, 2020. In the Commons last week Johnson admitted spending 25 minutes at the gathering saying he had believed "implicitly" that it was a work event. But in his latest salvo at the man he once worked for, Cummings said both he and another senior official had challenged Martin Reynolds, the prime minister's principal private secretary who sent out invitations to around 100 staff, as to whether it was within the rules. He said he believed that Reynolds then checked with Johnson who had agreed the event should go ahead. When he tried to raise the issue with Johnson directly he said his objections were brushed aside.
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BROKER RATING CHANGES
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Berenberg raises Genuit to 'buy' (hold) - price target 740 (630) pence
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Berenberg cuts Howden Joinery to 'hold' (buy) - price target 940 (1,080) pence
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Jefferies raises Fevertree Drinks to 'buy' (hold) - price target 3,400 (2,200) pence
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COMPANIES - FTSE 100
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Miner Rio Tinto saw production decline in the fourth quarter amid "challenging" operating conditions. Pilbara iron ore shipments fell 5% year-on-year in the fourth quarter and iron ore production was down 2% at 84.1 million tonnes. Bauxite, aluminium and titanium dioxide slag output declined 2%, 7% and 16% respectively, while mined copper production was flat. For 2021 as a whole, Pilbara iron ore shipments slipped 3% to 321.6 million tonnes and iron ore production was down 4% at 319.7 million tonnes. Bauxite, aluminium and titanium dioxide slag output were down 3%, 1% and 9%, respectively, and mined copper was down 7%. "In 2021 we continued to experience strong demand for our products while operating conditions remained challenging, including due to prolonged Covid-19 disruptions. Despite this, we progressed a number of our projects," said Chief Executive Jakob Stausholm.
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COMPANIES - FTSE 250
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Paving stones maker Marshalls said it expects results for 2021 to slightly ahead of previous forecasts after notching strong revenue growth. Revenue for 2021 was GBP589 million, up both on the GBP469 million achieved in 2020 and the GBP542 million reported for pre-pandemic 2019. Revenue growth in the second half of the year was "increasingly strong", the company added. Marshalls manufactures natural stone and concrete hard landscaping products. "This positive trading performance across the group has been achieved despite the continued backdrop of sector-wide raw material and labour shortages...However, cost increases were recovered through a mid-year price increase and a further price increase has been implemented successfully in January 2022," said Marshalls. As a result, it revised trading expectations for 2021 to be "slightly ahead of its previous view", and said recent trading remains positive.
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Online betting and gaming operator 888 Holdings said revenue dropped by 16% in the fourth quarter of 2021, against a strong annual comparator. Total revenue in the three months that ended December 31 was USD214 million, down from USD255 million in the same period of 2020. 888 said the revenue decline in the final quarter was in line with its expectations, with the result also affected by regulatory and compliance changes and 888's exit from the Netherlands. For all of 2021, revenue was USD972 million, up 14% from USD850 million. 888 will provide its full annual results in March.
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Tuesday's shareholder meetings
C4X Discovery Holdings PLC - AGM
Carr's Group PLC - AGM
Clinigen Group PLC - GM re cash offer by Triley Bidco Ltd
J Smart & Co (Contractors) PLC - AGM
MJ Hudson Group PLC - AGM
Tracsis PLC - AGM
Treat PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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