THG returns to revenue growth after ‘best performance of 2023’

In a trading update for the three months to December 31, 2023, THG reported group revenue of £597.9m, which it said was an increase of 1.1% in constant currency terms as compared to the same time last year.

The group said this marked its return to revenue growth and was the best quarterly performance of 2023. However, revenue fell 1% on a year-on-year basis in the quarter.

The group’s full-year revenue was £1.9bn, a 3.3% decline on a year-on-year basis and a 2.9% decline in terms of constant currency.

Chief executive Matthew Moulding said: “2023 was a year that threw up many challenges for all businesses, and I’m delighted in how the group not only responded to these challenges but grew stronger through the year.

“A combination of automation and significant cost initiatives delivered in 2022, in addition to a receding inflationary environment, each played a key role in the group delivering an expected record EBITDA performance after cash-adjusting items during 2023. This strong EBITDA profitability and efficient stock management generated positive operating cashflow of £170m.

“Despite consciously reducing capex levels from previous years, we still made significant investments in the group’s long-term future and extend competitive advantages. In 2023, we reinvested £125m of the group’s positive operating cashflow into capex initiatives, mainly within the UK economy 

“The return to revenue growth for both our Beauty and external Ingenuity clients were clear Q4 highlights, especially given the number of changes made to their business models over the past 18 months. But arguably the most pleasing performance came from our recently automated global fulfilment network. Q4 order volumes were delivered in record times, with average global delivery times reduced by one day. These widespread service improvements were achieved alongside a meaningful reduction in the cost of fulfilment.

“The decision in 2022 to support consumers through the cost-of-living crisis, sacrificing near-term profits for long-term customer loyalty, bore fruit in 2023. This, and the easing of commodity inflation, will help Nutrition to deliver a record profit performance in the year, despite a 13% devaluation in the Japanese yen in 2023 – Nutrition’s second biggest market.  

“Whilst the economic background remains uncertain there are some optimistic signs, with consumer cost of living pressures set to ease further in 2024. We are confident that the investments and decisions made throughout the year position the Group well to build upon the positive exit momentum.”