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(Alliance News) - Online beauty products retailer THG on Tuesday announced steps to improve its corporate governance, while also adding a representative of investor Softbank to its board.
THG, which trades as the Hut Group, said it delivered a strong trading performance in the third quarter and entered its peak trading period with confidence.
For the three months to September 30, revenue was GBP507.8 million, up 34% from GBP378.1 million last year and up 86% on 2019.
Looking ahead THG said it remains on target to trade comfortably ahead of expectations set out at the time of its September 2020 initial public offering. Then, THG had guided to 2021 revenue growth of between 20% to 25%. For 2021, THG expects acquisitions to contribute GBP260 million to revenue.
Revenue for its Ingenuity Commerce platform is expected to be between GBP108.0 million and GBP112.0 million in 2022.
Turning to corporate governance, THG has appointed Russell Reynolds Associates to undertake a search for a new independent chair as it seeks to move to the Premium segment of the London Stock Exchange in 2022. Founder Matthew Moulding will cancel his 'golden' share to facilitate the move.
THG also named a Softbank executive to its board as a non-executive director. Andreas Hansson, managing director of SB Management, will join the board immediately. Softbank back in May subscribed for USD730 million in THG shares and signed an collaboration and option agreement.
Hansson and Softbank also gave THG a vote of confidence.
"Since our initial investment, the technological capability of Ingenuity has proven compelling for several portfolio companies," Hansson said. "There is a clear need for a global, purpose-built and end-to-end e-commerce platform, we believe that Ingenuity has the right suite of products to serve this market, and we continue to be confident about our investment in THG and the Ingenuity investment opportunity."
THG shares were down 3.0% early Tuesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 7,246.06
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Hang Seng: down 0.6% at 25,971.60
Nikkei 225: closed up 1.8% at 29,106.01
DJIA: closed up 64.13 points, 0.2%, at 35,741.15
S&P 500: closed up 0.5% at 4,566.48
Nasdaq Composite: closed up 0.9% at 15,226.71
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EUR: soft at USD1.1605 (USD1.1612)
GBP: flat at USD1.3770 (USD1.3772)
USD: up at JPY113.95 (JPY113.68)
Gold: down at USD1,805.51 per ounce (USD1,807.93)
Oil (Brent): down at USD85.91 a barrel (USD86.57)
(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 BST UK CBI distributive trades survey
0855 EDT US Johnson Redbook retail sales index
0900 EDT US house price index
1000 EDT US new residential sales
1000 EDT US consumer confidence index
1630 EDT US API weekly statistical bulletin
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Millions of UK public sector workers are in line for a budget pay rise as Chancellor Rishi Sunak announced the UK's economy is "firmly back on track" after the coronavirus pandemic. Sunak has confirmed he will scrap the year-long public sector pay freeze in his fiscal statement on Wednesday, paving the way for a possible wage increase next year for those such as teachers, nurses, police and armed forces personnel. According to the latest available data from the Office for National Statistics, there were 5.7 million public sector workers registered in June. The chancellor last November "paused" public sector pay increases for 2021-22, with the exception of the NHS and those earning less than GBP24,000, after heavy borrowing during the Covid-19 crisis.
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Greenhouse gas concentrations in the atmosphere reached record levels last year, the United Nations said Monday, in a stark warning as UK Prime Minister Boris Johnson admitted being "very worried" about the COP26 summit going awry. The UN's blunt report on rising global warming comes as Johnson, the COP26 host, said it was "very, very far from clear that we'll get the progress that we need". "I'm very worried because it might go wrong...it's touch and go," Johnson said, though he remained hopeful a deal can be done at the 12-day climate talks to reduce carbon emissions and limit future temperature rises. COP26, the UN Climate Change Conference, is being held in Glasgow from October 31 to November 12.
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Ireland's Climate Change Advisory Council has outlined proposals to cut emissions by more than 50% by the end of the decade. The independent group that advises the Dublin government on its climate policy has signed off on two five-year carbon budget plans to achieve a 51% reduction by 2030. The budgets are part of the long-term strategy to make Ireland carbon neutral by 2050. The plans are now set to be brought to cabinet by Minister for the Environment, Climate & Communications Eamon Ryan.
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EU energy ministers are to meet in Luxembourg on Tuesday to discuss rising energy prices amid concerns for vulnerable households and businesses as the continent heads towards winter. The meeting comes after Germany argued against a reform of the EU energy market in a position paper seen by dpa. The paper said it shares the European Commission's recent analysis that the energy price spike relates to external global economic factors rather than the structure of the EU energy market. As such the paper said Germany "cannot support any measure that conflicts with the internal gas and electricity market, for instance, an ad hoc reform of the wholesale electricity market." The paper was signed by eight other EU member states: Austria, Estonia, Finland, Denmark, Ireland, Luxembourg, Lithuania and the Netherlands.
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China placed Lanzhou, a northwestern city of four million, under lockdown Tuesday in a bid to stamp out a domestic coronavirus spike, with residents told not to leave home except in emergencies. "All types of residential communities are to implement closed management," said the local government in a statement, as China reported 29 new domestic infections.
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BROKER RATING CHANGES
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JPMORGAN RAISES B&M EUROPEAN VALUE RETAIL TO 'OVERWEIGHT' ('NEUTRAL') - PRICE TARGET 720 (600) PENCE
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BERENBERG INITIATES SEGRO WITH 'BUY' - PRICE TARGET 1,500 PENCE
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COMPANIES - FTSE 100
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Whitbread said its Premier Inn chain's recovery in the first half was ahead of expectations as lockdown restrictions eased in the UK and Germany. For the six months to August 26, revenue more than doubled to GBP661.6 million from GBP250.8 million last year. Pretax loss was nearly eliminated, narrowing to GBP19.3 million from GBP724.7 million. Whitbread declared no interim dividend, in line with year before. The company explained that dividend payments are not permitted under its bank covenant waiver conditions until March 2023, but it said it intends to return to paying a dividend at the first available point that it is permitted to do so. Looking ahead, Whitbread said its sales recovery is ahead of expectations, and its UK like-for-like revenue per available room run rate has "potential" to make a full recovery next year. Whitbread said leisure demand remains strong in the UK into heading into the second half, while business demand was improving.
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Bunzl said its third-quarter performance was helped by its diversification, as a recovery in its base business offset a decline in sales of Covid-19 related products. Revenue was rose 7.8% from the same time last year at actual currency rates and rose by 13% at constant rates. Underlying revenue growth at constant currency was 2.5%, as acquisitions contributed 4.2% to the revenue growth and extra trading days 6.2%. Bunzl, which saw strong demand for its services in supplying Covid-19 personal protective equipment, noted adjusted operating margin was hurt by ongoing price deflation in pandemic-related products. Looking ahead, Bunzl expects "slight" underlying revenue growth in 2021 compared to 2020 at constant exchange rates. Margin expectations for the year remain unchanged, with adjusted operating margin expected to be only slightly ahead of historical levels. It expects the group operating margin to revert toward its historical level in 2022. Bunzl also said it has completed the acquisition of US agricultural supplies distributor Intergro.
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COMPANIES - FTSE 250
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IT infrastructure product and services firm Softcat declared an increased final dividend alongside a special dividend, as pretax profit rose 27% to GBP119.0 million in the financial year that ended on July 31 on a 7.4% improvement in revenue to GBP1.16 billion. Softcat raised its final dividend by 29% to 14.4 pence from 11.2p, increasing the full-year payout by 25% to 20.8p from 16.6p. The company also declared a special dividend of 20.5p, up from 7.6p a year before. Softcat Chief Executive Officer Graeme Watt credited "robust" cash generation for the special dividend.
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COMPANIES - MAIN MARKET AND AIM
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The boss of insurance to holiday group Saga has admitted the company lost its way in how it engaged with older customers. Euan Sutherland, who joined the firm for the over-50s market in January last year, said the business failed to modernise during years of private equity ownership, and must change. His comments came as the chief executive of the 70-year-old company unveiled a rebrand in the hope of changing perceptions of older generations. Sutherland told the PA news agency: "I think for the last, probably 10 years, maybe longer than that, we have not modernised as a brand." He hopes to address the issues with the rebrand under which the company wants to see older generations as "experienced" rather than just "old". The company also wants to tap into the huge extra wealth gained by retirees who saved the most cash during the pandemic as the economy shut down.
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COMPANIES - GLOBAL
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UBS Group reported strong profit growth in the third quarter, with the Swiss bank boasting of its "disciplined execution" leading to a USD1 billion rise in operating income. In the three months to September 30, the Zurich-headquartered financial services firm recorded net profit of EUR2.29 billion, up 9.5% from USD2.09 billion a year before. Diluted earnings per share improved by 43% to USD0.63 from USD0.44. Net interest income increased by 11% to USD1.69 billion from USD1.52 billion, while net fee & commission income rose 18% to USD5.61 billion from USD4.77 billion. Operating income grew 12% to USD9.13 billion from USD8.12 billion.
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Novartis reported double-digit net income growth both in the third quarter and first nine months of 2021. The Basel, Switzerland-based pharmaceutical firm reported net sales for the three months to September 30 of USD13.03 billion, up 6% from USD12.26 billion posted for the third quarter of 2020. Sales growth was driven by its Entresto, Cosentyx, Kesimpta and Jakavi products. On a constant currency basis, sales were up by 5%. Net income jumped 43% year-on-year to USD2.76 billion from USD1.93 billion. Earnings per share were USD1.23, up 45% on the prior year, growing faster than net income due to a lower weighted average number of shares outstanding. Novartis said it is reviewing the future of its generic medicines division, Sandoz, with all options on the table – from retaining it to a sale. "Novartis has commenced a strategic review of the Sandoz division," it said. "The review will explore all options, ranging from retaining the business to separation, in order to determine how to best maximise value for our shareholders."
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Tuesday's Shareholder Meetings
Dispersion Holdings PLC - GM re share allotment
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By Tom Waite; thomaslwaite@alliancenews.com
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