THG making ‘material progress’ as tech firm’s boss hails 2023 EBITDA growth
Cult Beauty and Myprotein owner THG saw continuing adjusted EBITDA growth of almost 50 per cent in 2023 compared to the year before, it told markets in a statement this morning.
THG saw a return to revenue growth in the last quarter of the last financial year, a return described by group CEO Matt Moulding as “pleasing” in this morning’s statement to the markets.
As a result continuing adjusted EBITDA improved to £120.4m, above the 81.2m achieved last year and beating guidance issued in January of “above £117m.”
Margin also increased to 6.1 per cent from 4 per cent. Medium term guidance was maintained, with the firm looking to achieve circa 9 per cent margin target.
Across the group, distribution costs fell year on year to 13.2 per cent of revenue, down from 15.8 per cent the year before, driven by an increased use of automation.
The group, which also owns Lookfantastic and Dermstore, saw paper revenues slide slightly year on year due to the discontinuation of loss making categories, to £1.98bn.
The firm said it had hit breakeven free cash flow and had an “extremely strong” liquidity position, with around £600m of cash and available facilities at year end.
Matthew Moulding, CEO of THG, commented: “In 2023, we made material progress against our strategic priorities, delivering significant profit growth following the support for our consumers through the cost-of-living crisis in 2022. This focus led to the Group delivering record EBITDA after cash-adjusting items in 2023, higher than at the peak of the pandemic.
“Having completed our recent infrastructure investment programme, the Group is now delivering operating leverage. Our fulfilment network is becoming increasingly optimised through a combination of robotics automation, AI and the onboarding of new Ingenuity clients utilising existing capacity,” he continued.
“The return to Group revenue growth in Q4 was especially pleasing, and this momentum has continued into 2024.”
Last year it signed a fulfilment deal with Holland & Barrett through its THG Ingenuity division, as well as other tie ups with Disney and Coca-Cola amongst others.