RE: Over the coming days/weeks, full rerate is coming.21 Apr 2022 12:26
(Alliance News) - THG PLC on Thursday reported annual earnings growth, a decent start to 2022 and added that it has received "numerous" takeover proposals in recent weeks.
The online beauty products platform said it rejected all the proposals as they do not reflect its fair value. It also confirmed it is not currently in receipt of any approaches.
The update came alongside THG's annual results, which showed revenue in 2021 jumped 35% to GBP2.18 billion from GBP1.61 billion the year before. Its pretax loss slimmed to GBP186.3 million from GBP534.6 million.
Chief Executive Matthew Moulding said: "In our first full year as a public company, 2021 saw us scale revenue and expand our business model, well ahead of targets set at IPO. We delivered a record revenue performance for the year, with group revenue up 38% year-on-year to GBP2.2 billion. On a two-year basis, THG has grown revenues 95%; effectively doubling the size of the business."
On more recent trading, THG said the first quarter of 2022 saw "very encouraging" consumer demand against a challenging comparable lockdown period in 2021, and added that the second quarter has started in line with expectations.
First quarter revenue was up 16% annually at GBP520.2 million. It is 84% higher than two years earlier.
For the whole of 2022, THG expects revenue to rise by between 22% and 25% at constant currency, before a 1% hit from Russia and Ukraine.
It does expect such marked growth in adjusted earnings before interest, tax, depreciation and amortisation, however.
THG's adjusted Ebitda is expected to remain at levels similar to 2021's GBP161.3 million, which was a 7.0% hike from GBP150.8 million in 2020.
THG added: "The near-term environment has evolved significantly since January due to a number of global factors including; the war in Ukraine, Covid-19 related lockdowns in Asia, and inflationary pressure across almost all cost lines. [Foreign exchange], whey commodity prices and inflation remain the key adjusted Ebitda margin drivers for FY 2022, and ongoing automation in the network, vertical integration and cost saving actions will help to offset some of these pressures.
"Given the continually evolving external considerations, the board anticipates FY 2022 adjusted Ebitda to be broadly in line with FY 2021, with a weighting to H2 2022. The full year effect of anticipated improvements primarily expected in the second half across whey commodity prices, business model efficiencies driving improved operating leverage and increased Ingenuity Commerce revenues, all support continued margin recovery in 2023 and a return to 9.0% to 10.0% adjusted Ebitda in the medium-term."
In 2021, THG's adjusted Ebitda margin declined to 7.4% from 9.3%.
THG said recent accelerations of inflationary pressure are of a "transitory nature".
On recent takeover proposals, CEO Moulding said: "You will all be aware that there has been significant speculation about possible third-party inter
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