THG considers spinning off tech platform as Myprotein rebrand weighs on sales

Cult Beauty and Myprotein operator THG has said it is considering spinning off its technology platform in the hope of restoring its share price, while it also reported slower sales this year.

The Manchester-based business runs a system called Ingenuity which works closely with warehouses to manage online sales.

It is used by brands including Holland & Barrett and L’Oreal, as well as THG’s brands which also include Lookfantastic and Dermstore.

But THG said it was in talks to demerge Ingenuity, which would leave it with its two consumer divisions, beauty and nutrition.

This would take place at the same time as a planned restructuring of how its shares are listed on the London Stock Exchange (LSE).

The company said it had consulted extensively with shareholders and decided it would be in their best interests.

It would also increase its chances of being included in London’s FTSE index, the firm said.

THG’s share price has come under pressure in recent years and has dropped by more than 90% since it first floated on the LSE in 2020.

Its shares started trading in London at about 500p per share, but are now worth around 60p.

Meanwhile, the company revealed it had managed to slightly narrow its losses over the first half of the year.

It reported a pre-tax loss of £118 million for the six months to the end of June, less than the £133 million loss reported this time last year.

On an adjusted basis, which strips out what it believes to be one-off costs, earnings edged up to £48.8 million over the first half of the year.

Total sales also dipped nearly 2% with the group’s nutrition division, which includes Myprotein, dragging on the wider business thanks to a 7.5% year-on-year decline.

THG blamed this on temporary “disruption” from a major global rebrand of Myprotein, with online prices affected by the rolling out of new packaging.

Shares in THG were down more than a 10th on Tuesday.