THG rejects ‘numerous’ takeover approaches as cost pressures increase

The boss of online retail firm THG said it has rejected several takeover proposals as it warned that soaring costs could curb its profit growth.

Founder and chief executive Matt Moulding told shareholders on Thursday it “has received indicative proposals from numerous parties in recent weeks”.

However, he said the firm’s board concluded that “each and every proposal to date has been unacceptable, failing to reflect the fair value of the group”.

The company, previously known as The Hut Group, has faced speculation that it could be taken private after seeing a dive in its value following its 2020 stock market float.

It came as THG reported that revenues increased by 16.3% to £520.2 million for the first quarter of 2022.

The company, which owns brands including MyProtein and Cult Beauty, said this reflected “very encouraging consumer demand levels” against a strong period last year while trading has started in line with expectations for the current quarter.

But the retailer said it expects adjusted profits for the current year to be in line with 2021, representing a downgrade from analyst expectations due to soaring inflation.

THG said it has seen cost increases across its categories and highlighted particular surges in the cost of whey protein.

The firm will raise prices at a lower level than its cost inflation and use efficiencies in its operations to absorb some pricing pressures, it added.

Mr Moulding said: “In our first full year as a public company, 2021 saw us scale revenue and expand our business model, well ahead of targets set at IPO.

“I would like to thank all THG colleagues for their dedication and hard work in helping us achieve such a strong performance for the year.

“We remain confident in delivering our strategic growth plans for the year ahead and beyond, with full support from the board and our new chairman.”

Shares in the business increased by 1.1% in early trading.