THG PLC H1 Loss Widens, Cuts FY22 Outlook; Stock Dips

Economy

Shares of THG Plc (THG.L) were losing around 16 percent in the early morning trading in London after the e-commerce retailer on Thursday trimmed fiscal 2022 outlook after reporting wider loss in its first half.

The first-half loss before tax was 108.19 million pounds, wider than last year’s loss of 81.34 million pounds. Loss per share was 0.09 pound, compared to loss of 0.08 pound per share a year ago.

Operating loss widened to 89.2 million pounds from loss of 17.4 million pounds last year.

Adjusted EBITDA declined 60.2 percent to 32.3 million pounds from 81.2 million pounds a year ago.

Group Revenue, however, increased 12.3 percent to 1.08 billion pounds from 958.8 million pounds a year ago. At constant currency rates, revenue grew 11.9 percent.

Looking ahead for fiscal 2022, the company now expects adjusted EBITDA between a range of 100 million pounds to 130 million pounds pre SaaS cost reclassification reflecting revenue growth of 10 percent to 15 percent.

The company previously expected adjusted EBITDA to be broadly in-line with prior year’s 161 million pounds, with revenue growth of 19 percent to 24 percent. The revision in outlook mainly reflects the cost of rising interest rates and energy that are expected to place pressure on consumers.

Despite this outlook, the Group anticipates a strong second half, with another period of double-digit growth.

Further, the Board remains confident of a return to 9 percent adjusted EBITDA margins in the medium term, and strong progression into FY 2023.

The company also remains on track to be cashflow positive in 2024.

In London, THG shares were trading at 41.34 pence, down 15.63 percent.

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