THG slumps after profit warning

The company said it now expects FY 2022 earnings before interest, taxes, depreciation and amortisation to come in between £100m and £130m, down on the previous year versus previous guidance for flat EBITDA. Meanwhile, revenue growth will be between 10% and 15%, down from previous guidance of 22% to 25%.

THG noted that global economic forecasts predict the outlook for consumers will remain challenging but reiterated its guidance for constant currency revenue growth guidance of between 20% and 25% for 2023.

Chief executive Matthew Moulding said: "Against the tough macro-economic backdrop, we have prioritised our loyal customer base, over maximising near term gross margins focusing on retention and growth of consumers.

"The strength, resilience and agility of our vertically-integrated business model, coupled with automation, has enabled us to significantly invest in price protection for consumers currently facing unprecedented cost-of-living challenges."

For the six months to 30 June, the company reported record sales of £1.1bn, up 12.3% year-over-year. But adjusted EBITDA came in at £32.3m, down 60.2%.

In a separate statement, THG announced that senior independent director Zillah Byng-Thorne was stepping down from the board with immediate effect, along with non-executive director Andreas Hansson. Damian Sanders will assume the role of interim senior independent director.

THG also announced the appointment of Gillian Kent and Dean Moore as independent non-executive directors. Both will join the board with immediate effect. Kent has had "a far-reaching" career in software, internet, digital media and mobile technology businesses and formerly held various senior roles at Microsoft, including Managing Director MSN UK, where she was responsible for creating one of the UK's largest online services businesses.

Moore, meanwhile, is a chartered accountant with over 35 years of public company experience, bringing with him "a depth of City and finance knowledge, together with significant expertise in the financial services and retail sectors". He was previously CFO of Cineworld, N Brown Group, T&S Stores PLC and Graham Group and is currently the interim CFO of Dignity.

At 0815 BST, the shares were down 16% at 41.35p.