THG posts hefty loss but 2021 starts well
Online retailer to spend more on acquisitions than previously planned
Online retailer THG has recorded a hefty loss for 2020 after taking a charge of more than £300m for share-based payments to staff, but the group said trading in the first quarter had been ahead of expectations and it intended to spend more on acquisitions than previously planned.
Equity participation for staff was widespread at THG even before it floated last September, and most of the share plans have vested in full owing to the strong performance of the shares, which have risen by two-fifths since listing.
As a result, the group booked a £332m non-cash charge to reflect the value of the awards. Along with a £105m impairment charge on assets held for sale, that turned a £45m pre-exceptional profit into a £481m operating loss. Sales jumped 41 per cent, led by the core beauty and nutrition businesses.
Manchester-based THG said it was too early in the year to amend full-year forecasts, but “confidence and visibility” in its existing guidance of 30-35 per cent revenue growth had increased.
It also expects to spend up to £250m on bolt-on acquisitions this year, up from an earlier forecast of £150m, although capital spending as a proportion of sales will be lower overall than last year.