THG profits have risen nearly 80% despite sales declining 8% following the group’s “action to discontinue loss making categories”.
The Look Fantastic and MyProtein owner reported adjusted EBITDA had rocketed 78% to £114.1m in the year to 31 December, up from £64.1m.
It comes as sales dropped 8.7% to £2.05bn, compared to £2.24bn in 2022, reflecting “the decision to exit several categories as part of the strategic review and the conscious prioritisation of higher margin sales”.
THG said it saw a return to revenue growth in the final quarter of 2023 and the momentum has continued into the current year.
However, on an operating basis, it was still in the red, although it cut losses from almost £500m last year to £185.4m.
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The group’s beauty division reported a 4.4% drop in sales from £1.23bn to £1.71bn, which it attributed to “short-term global de-stocking affecting manufacturing volumes” in the first half.
THG said its Ingenuity arm “continues with its pre-announced strategic repositioning” as it focusses on higher value and higher margin clients. The division’s sales fell 3.4% to £1.98bn last year.
Meanwhile, despite sales of its nutrition arm slipping, THG said there is “a significant opportunity” to grow its licenced product base and scale its brand sales through partnerships with supermarket chains and food and drink brands moving forward.
THG CEO Matt Moulding said: “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.”
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