Consumer products giant THG says it is expecting growth in 2023 after hailing record revenues in 2022 despite disappointing earnings news.
THG - which this week revealed a takeover approach from Apollo Global Management - said group revenues for 2022 stood at £2.2bn, up 2.7% on 2021. Its adjusted EBITDA earnings figure was £64.1m.
THG, formerly The Hut Group, has also carried out a restructure this year - and BusinessLive revealed this month that 180 roles were at risk of redundancy at its THG Studios arm.
READ MORE: THG reveals takeover approach from Apollo Global Management
THG also reported today that first quarter sales for this year were down 8.6% on 2022. But it said this was “largely as planned, as a result of prioritising higher margin sales”.
The group added: “The Board anticipates FY 2023 Group revenue growth across continuing divisions of low to mid-single digit. Adjusted EBITDA is expected to be in line with the company consensus, with a significant weighting to the second half of the year.”
Matthew Moulding, CEO of THG, said: “We continue to make good progress on executing our strategy of building a leading digital-first consumer brands group, powered by our own technology and global fulfilment operations. I am hugely proud of the THG team who have delivered another record revenue performance.
"While FY 2022 adjusted EBITDA was not where we planned at the start of the year, this was largely the result of our strategy to minimise the impact of inflation upon our customer base. This investment in their retention, and longer term growth, was the principle driver behind the reduction in gross margin.
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"The challenging macro and inflationary environment required decisive action across the business with around £100m of efficiency savings delivered. A much-improved outlook on many key cost inputs gives us confidence in an improved financial performance as the year progresses.
"In THG Ingenuity, we appointed a highly experienced CEO to focus on long-term, higher value enterprise accounts. The repositioning of the division is on track with the strategy now paying dividends, evidenced by recent announcements and a strong 2023 pipeline.
"We are nearing completion of a three-year major infrastructure investment programme. While this has inevitably involved significant investment and transition costs, the less than 2-year return on investment is pleasing. The global capability it now provides gives us increased confidence in our ability to continue to capture market share whilst accelerating both profitability and free cash flow generation.
"We have the technology infrastructure and the global fulfilment capability which, coupled with our continuous engagement with our millions of customers worldwide who love the high-quality products we present to them leaves us well positioned to capitalise on this path of growth."
Shares in THG rose more than 40% yesterday morning after the company confirmed it had received a "highly preliminary and non-binding indicative proposal" from Apollo Global Management.
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