THG PLC (LSE:THG) reported slower sales growth than expected and an increased half-year loss of £108mln amid its policy of raising prices more slowly than inflation to “protect consumers and drive market share gains”.
The parent of online retailer The Hut Group grew revenue 12.3% to £1.1bn in the six months to 30 June 2022, which was below the 19-24% guidance it had laid out earlier this year, and the 35.1% seen in the past full year.
It also revealed that two non-executive directors (NED) are stepping down with immediate effect, one of them after less than a year in place.
A strong second half is expected, though the company said it expects rising interest rates and energy prices to place pressure on consumers, though the sales growth in the first half and “stable consumer metrics” provided confidence.
The loss before tax was up from £81.3mln a year ago, while underlying profits (EBITDA) of £32.3mln were down from £81.2mln last time.
Painting the investment in price of its Myprotein snacks and beauty products as a move that “prioritised our loyal customer base, over maximising near-term gross margins” and “price protection for consumers currently facing unprecedented cost-of-living challenges”, chief executive Matthew Moulding said this had also been “offset through reducing 2023 capex, with the board viewing this investment as yielding a better return for shareholders and consumers alike in the near term”.
Pointing to cash on hand of £266mln on the balance sheet and leading positions in its growing markets, Moulding said the board has “confidence in our ability to deliver long-term value for shareholders and remain on track to be cashflow positive in 2024”.
Zillah Byng-Thorne, senior independent director, is leaving after four years on the board, while non-executive Andreas Hansson departs after only being appointed in October last year.
Two new appointments were announced to replace them as independent NEDs: Gillian Kent, former boss of Microsoft’s MSN UK and Propertyfinder, and Dean Moore, former finance chief at Cineworld and N Brown.
Current NED Damian Sanders will assume the role of interim senior independent director while the company said it continues to search for suitable additional independent NEDs.