THG is actively considering options to demerge its Ingenuity platform as part of its strategic realignment.
- The company’s interim results show a revenue decline of 3.6%, but a growth in adjusted EBITDA.
- Frasers Group has agreed to acquire Coggles, integrating with THG’s Ingenuity services in Australia.
- HMRC has approved tax structuring for the potential demerger, though no timeline is set.
- THG’s strategy focuses on enhancing shareholder value, with further shareholder details forthcoming.
THG, previously known as The Hut Group, has announced its intention to explore a demerger of its Ingenuity ecommerce service. This announcement is aligned with their newly adopted strategy aimed at maximising shareholder value. At present, there is no definitive timeline for the demerger, but the approval of tax structuring by HMRC marks a significant step forward.
In its interim results for the half-year ending 30 June 2024, THG reported a 3.6% decline in total revenue, falling to £934 million. Conversely, the company saw a modest increase in its adjusted EBITDA, which rose by 1.6% to £32.6 million. These figures reflect the company’s efforts to balance revenue generation with cost management during a challenging economic period.
The strategic relationship with Frasers Group has been strengthened following their agreement in June to purchase the luxury etailer Coggles from THG. This partnership aims to integrate Frasers Plus into THG’s Ingenuity platform, while Frasers Group will benefit from THG’s robust courier management services in the Australian market. This move is expected to enhance the operational synergies between the two entities.
Despite these advancements, THG has also faced internal challenges, notably the announcement in July that required staff to return to office work full-time, alongside the potential redundancy of up to 171 positions. These measures are part of a broader restructuring effort to streamline operations and improve efficiency within the organisation.
As part of the demerger process, THG will require shareholder approval to move forward. Detailed proposals concerning the demerger will be communicated to shareholders in due course. This strategic decision underscores THG’s commitment to refining its business model and concentrating on its core divisions—THG Beauty and THG Nutrition—both of which are profitable and cash generative.
THG is committed to its strategic goals, with potential demerger actions reflecting its adaptability and focus on driving shareholder value.
