THG PLC (LSE:THG), better known as The Hut Group, said it has received indicative bid proposals from a number of potential suitors in recent weeks, but deemed them “unacceptable” for failing to reflect the “fair value” of the online retail platform.
The announcement follows speculation that THG is a possible bid target. The company said it is “not currently in receipt of any approaches”.
“We continue to focus on delivering our exciting growth strategy across a number of large global sectors, and prepare to step up to the premium segment of the LSE at the appropriate time,” said chief executive Matthew Moulding.
THG also posted its delayed numbers for the past calendar year and an update for the first quarter of 2022, accompanied by guidance for the coming year, with revenue still expected to grow 22-25% but profit margin guidance has been cut.
For 2021, revenue grew 38.1% to £2.2bn and underlying profit (adjusted EBITDA) rose 6.6% to £161mln.
"Our technology platform is now powering an expansive list of global brands across a multitude of sectors, and the number of third-party websites has almost doubled during the year,” Moulding said.
Margins in 2021 declined to 7.4% from 9.3%, partially reflecting increasing raw material costs, particularly for whey, and higher freight costs, which saw a “marked acceleration” in the second half.
For 2022, EBITDA margin guidance has been cut to around 6% from circa 8% due to these inflationary pressures, which it plans to not completely pass on to consumers.
Revenue growth in the first quarter also slowed to 17.2% year-on-year, but looking further ahead THG expects improvements in the second half, primarily in whey commodity prices, and increased revenues from the Ingenuity Commerce business, to support continued margin recovery in 2023 and a return to 9%-10% adjusted EBITDA in the medium-term.