THG PLC (LSE:THG) said underlying profits are likely to fall this year, despite improved sales in the past two months for its nutrition and beauty arms, and has agreed to sell its Claremont Ingredients business for twice what it paid for it five years ago.
A deal has been struck with Italy's Nactarome Group, which is paying £103 million in cash to the owner of the Hut Group, which bought Claremont in 2020 for £52 million.
Last year, the subsidiary generated around £14 million of revenue and £7 million of adjusted EBITDA, with the sale expected to reduce group EBITDA by £5 million in 2025 and £10 million in 2026.
"Claremont has been a huge success, building Myprotein's global licensing franchise from a standing start to partnering with category leading brands in just a few years," said THG CEO Matthew Moulding.
"After receiving a highly competitive offer, the timing was right to realise that value."
THG also provided a brief update trading, reporting estimated first-half adjusted EBITDA of £24 million, down from £37.1 million a year ago, which it said was due to higher whey pricing.
Net debt at the end of the half was roughly £330 million, falling to a pro-forma level post-disposal of nearer £230 million.
With THG Nutrition seeing double-digit revenue growth across June and July, the company expects second-half growth to be between 10% and 12%, supported by a plan to limit price increased in order to increase market share gains and customer loyalty in the long-term.
As for THG Beauty, revenue growth was said to have improved, with no more detail provided, after the last trading update guided to a fall of between 2% and 3% in the second quarter, after a 9.8% drop in the first.
THG forecasts group adjusted EBITDA of around £50 million for H2, bringing the full-year total to approximately £74 million, down from £92.1 million in 2024 and £111.3 million in 2023.