THG is set to demerge its Ingenuity arm as it simplifies its business model as a consumer beauty and nutrition group and targets inclusion in the FTSE UK Index by March 2025.
In an announcement to the London Stock Exchange, the ecommerce giant said work was underway to demerge its digital solutions arm.
THG said it is expected that Ingenuity will be demerged into an independent private company with an equity valuation of up to £100m. This simplifies THG’s business model, which will now include its remaining beauty and nutrition businesses.
The ecommerce giant said it had submitted a notification to the Financial Conduct Authority for inclusion in the equity shares (commercial companies) category, or ESCC, as a result of this change in the business.
It expects the transfer to be completed before the end of the calendar year as it sets sight to be included in the FTSE UK Index reclassification in March 2025.
The retailer also updated on its trading performance for the three months ending September 2024, which saw sales dip 2% on a year-on-year basis to £433.1m.
THG Beauty, which owns brands like Lookfantastic and Cult Beauty, saw sales grow 2.3% to £254.7m, while THG Nutrition sales decreased 13.1% to £134.5m.
Group nutrition sales improved through the quarter as the impact of the Myprotein rebrand faded. The group, which is targeting offline retail partnerships for Myprotein, most recently with Holland & Barrett, said it expects 25% of total Myprotein brand sales to come from offline channels over the medium-term.
THG chief executive Matthew Moulding said: “Today, we have separately announced significant progress on our strategy to demerge THG Ingenuity into a private company supported by major shareholders. THG Plc will remain a listed leading consumer brands group with our planned transfer to the ESCC well on track.
“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.
“We are also proud to be recognised in the top 250 companies worldwide for our contribution and efforts in sustainability thanks to our ongoing progress towards our net-zero goals.
“Preparations for our busiest trading period are well advanced with efficiencies across the network over the last 12 months delivering further benefits for our Ingenuity clients to aid new customer acquisition.”
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