- Slowing growth sparks 18% share price slump
- Stock has fallen from near-800p peak in January 2021
- Softbank pulled plug on Ingenuity investment in July
From £5.4 billion UK tech unicorn to serial flop, shares in online retail business THG (THG) have now lost 95% of their peak value after battling against slowing growth.
The one-time UK stock market favourite reported slower sales growth than expected and escalating half-year losses as it stuck to its plan to raise prices slower than inflation to lure under-pressure consumers.
The company revealed operating losses of £89.2 million, up 72%, on revenue 12.3% up at £1,076 million for the six months to 30 June 2022. Top line growth was below the 19% to 24% guidance the company had laid out earlier this year, and way down on last year’s 35.1%.
THG stock plunged 18% to 40.2p, the lowest its shares have traded since it listed almost exactly two years ago at 500p per share.
HARD TO STOMACH
THG Beauty’s sales increased 20% to £552.8 Million while the Nutrition arm saw sales jump 101% to £332.1 million. THG Ingenuity, its business that provide customers with an off-the-shelf suite of tools to get online, saw revenues rise 21.4% to £104.2 million. THG OnDemand fell by 1% to £51 million.
The firm said the results showed ‘substantial progress as we continue to build a strong, sustainable global platform supporting THG brands and Ingenuity clients.’
It also pointed to net cash of £266 million on the balance sheet and leading positions in its growing markets, saying founder and chief executive Matthew Moulding maintained his ‘confidence’ in the group becoming cashflow positive in 2024.
Yet many investors will look at their investment and struggle to see the optimism wood for all the poor-return trees.
Having soared in the days after listing on the London market and hitting a peak 796p in January 2021, it has been steeply downhill for the shares ever since.
Today's results come after a $1.6 billion deal that would have seen Japanese investment giant SoftBank take a near 20% stake in the Ingenuity division was abandoned in July.
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