Shares in THG PLC (LSE:THG), the e-commerce and brand ownership group, rose 8% to 33.92p after full-year results showed earnings ahead of forecasts and positive trading momentum carrying into 2026.
The group reported earnings before interest, tax, depreciation and amortisation (EBITDA) of £76.6 million for the year, ahead of the £75 million forecast by Peel Hunt, which reiterated its buy rating and 80p target price on the stock.
Revenue for the year came in at £1.7 billion, up 2.3% year-on-year on a continuing basis, with positive trading trends from the fourth quarter extending into the new year, with Beauty up 6% and Nutrition up 9% on a constant currency basis.
Broker Peel Hunt noted that THG has submitted a £78 million VAT reclaim following a tribunal ruling in favour of protein powder products being zero-rated, comprising £60 million for protein powder and £18 million for other supplements, though this is not included in the broker's forecasts.
Analysts also flagged the recent sale of rival nutrition brand Huel to Danone at an estimated 2.5-to-3 times sales as a read-across for THG's Nutrition division, arguing that on this basis, with forecast sales of around £650 million for the year ahead, the unit alone is now worth more than THG's entire market capitalisation of approximately £500 million.
Free cash flow showed an outflow of around £52 million in the year, reflecting a deliberate stock build in Beauty and restructuring costs, both of which Peel Hunt expects to reverse.