// THG full-year operating losses deepen to £495.6m due to weakened sales and non-recurring costs
// The online retail firm said profitability had improved in the first quarter despite sales falling 8%
THG has revealed its full-year operating losses have more than doubled to £495.6m but said profitability had improved in the first quarter despite a 8% fall in sales.
The online retailer said its performance in the year to 31 December was dragged by a £275.4m non-cash impairment and £69.3m of non-recurring costs, such as stock provision, international delivery rerouting and administrative costs.
Sales edged up 2.7% to £2,239.2m last year boosted by a 9.1% growth in its Ingenuity arm and a 4.5% rise in its beauty business.
The group said it expects a similar low- to mid-single digit rise this year.
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However, first quarter sales dropped 8.6% to £496.4m in the three months to 31 March which was a largely planned outcome as a result of prioritising higher margin sales.
THG reported its adjusted EBITDA pre-SaaS costs more than halved to £74.3m last year from £161.3m in 2021.
Chief executive Matthew Moulding said: “While FY 2022 adjusted EBITDA was not where we planned at the start of the year, this was largely the result of our strategy to minimise the impact of inflation upon our customer base.
“This investment in their retention, and longer-term growth, was the principle driver behind the reduction in gross margin.
“The challenging macro and inflationary environment required decisive action across the business with around £100 million of efficiency savings delivered. A much-improved outlook on many key cost inputs gives us confidence in an improved financial performance as the year progresses.”
On Monday, THG shares surged over 40% after it confirmed it had received a very preliminary takeover approach from Apollo.
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