THG CEO Matthew Moulding gives up ‘golden share’

THG CEO Matthew Moulding

Manchester-based consumer brands giant THG plc announced that its co-founder and CEO Matthew Moulding has given up his “golden share” rights in the company, which gave him the power to veto any takeover.

The company, which owns websites including Lookfantastic and Myprotein, also said in an AGM trading statement that it had a “strong” second quarter.

The move by Moulding is part of the firm’s efforts to calm investor concerns over governance at THG.

“The group’s intention in relation to moving to a premium listing remains as stated in its FY 2022 results in April, with timing subject to the final outcome of the FCA’s review for reform of the listing regime,” said THG.

THG went public at £5 a share in September 2020 and the stock rose to around £8. However, THG shares have since fallen about 90% to around 75p — slashing the firm’s stock market value to roughly £980 million — following a disastrous presentation to investors and concerns over the company’s structure, transparency and governance.

THG also said that Helen Jones has been appointed independent non-executive director of THG with immediate effect.

Helen is an experienced non-executive director, having had a long and successful career building premium food and beverage brands across FMCG and multi-site hospitality, both in the UK and internationally,” said the firm.

Having embarked on her portfolio career in 2014, Helen currently serves as the Chair of the Remuneration Committee at Premier Foods plc, Virgin Wines plc and Fuller, Smith and Turner plc.

“She is a Member of the Audit Committee at both Virgin Wines plc and Fuller, Smith and Turner plc, also serving as a Member of the Nominations Committee.

“Additionally, Helen acts as the Workforce Engagement Non-Executive Director for both Premier Foods plc and Fuller, Smith and Turner plc.

In addition, Helen currently holds the role of Senior Independent Director and is a member of the Audit, Nomination and Remuneration Committees at Halfords Group plc.

In 2021, she stepped down as Vice Chair of the Ben & Jerry’s Independent Board of Directors USA, a role she undertook following an extensive career leading the expansion of the brand in Europe.”

In its AGM trading statement, THG said: “The group has had a strong Q2 2023, with a continued successful focus on profitability and cash generation.

“A significant increase in H1 2023 profitability is expected, with Adjusted EBITDA in the range of £44m to £47m (H1 2022: £32.3m), and continuing Adjusted EBITDA in the range of £47m to £50m.

“Guidance for FY 2023 remains unchanged as disclosed at the time of the FY 2022 results in April, with Adjusted EBITDA expected to be in line with the company consensus.

Free cash flow performance for the 12 months to 30 June 2023 is ahead of expectations and anticipated to be a c. £40m outflow. The group remains well on track to deliver free cash flow neutrality for the full year, with adjusting items materially lower than the prior year.

THG Nutrition has had a particularly strong start to the year, with the pricing decision to support consumers through exceptional market-wide inflationary conditions in FY 2022 now paying dividends. Commodity prices continue to ease, with further margin benefits expected in H2 2023.

In THG Beauty, our online retail platforms have focussed on profitable sales in markets where our localised infrastructure can deliver economies of scale. We expect further sales momentum in the second half of the year, supported by beauty manufacturing as the temporary industry-wide de-stocking comes to an end.

THG Ingenuity continues to make good progress on building its client base across higher value enterprise accounts and its network of global strategic alliances and remains on track to add £1bn incremental GMV to the platform across Technology, Digital and Operational services during FY 2023.

“In addition to partnerships with BigCommerce, AutoStore, PwC and Elastic Path announced to date, Ingenuity has recently partnered with Commercehub, one of the world’s largest commerce networks, to extend Ingenuity’s marketplace solution and create a complementary, managed marketplace offering.

For the group, Adjusted EBITDA margin accretion into FY 2024 and beyond will be driven by annualised commodity pricing benefits, ongoing automation efficiencies and operating leverage, in addition to normalised capital expenditure, underpinning positive free cash flow guidance for FY 2024.”