THG to spin off tech platform Ingenuity as it seeks £75m funding boost
It came as the MyProtein and Cult Beauty owner revealed a fall in sales over the latest quarter.
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Online retail business THG has said it will spin off its technology platform and plans to raise £75 million in an equity raise.
It came as the MyProtein and Cult Beauty owner revealed a fall in sales over the latest quarter, but pointed towards a recovery in its under-pressure nutrition business.
Last month, THG said it was considering a demerger of its Ingenuity platform business, amid efforts to grow value for shareholders.
Late on Thursday, the business told investors it will separate the business, which works closely with warehouses to manage online sales.
Ingenuity is used by brands including Holland & Barrett and L’Oreal, as well as THG’s brands which also include Lookfantastic and Dermstore.
THG said the move would help to simplify its operations by focusing on its beauty and nutrition arms, as well as boost its balance sheet and provide more cash for investment.
The company said it is aiming to raise £75 million through a share placing and subscription in order to help fund the demerger.
Chief executive and founder Matthew Moulding has committed to investing £10 million as part of the raise.
In a separate statement, THG revealed that total group revenues were 5.2% lower at £442.8 million for the quarter to September 30, with continuing revenues down 2%.
It came as growth from its beauty and ingenuity businesses was more than offset by weakness in nutrition.
Nutrition revenues were 13.1% lower for the quarter, despite an improvement as the period progressed.
Mr Moulding said: “Today we have separately announced significant progress on our strategy to demerge THG Ingenuity into a private company supported by major shareholders.
“It was especially pleasing to see another solid quarter of delivery from both our Beauty and Ingenuity businesses, rewarding the significant overhaul of their respective operating models during 2022 and 2023.
“The short-term disruption from the major rebrand of MyProtein is now behind us, and we were pleased that in September Nutrition delivered its best sales performance since January.”