THG has confirmed it is to split off its Ingenuity division into a separate trading entity with its own stock market listing.
The Company has today launched an equity raise, targeting c. £75 million, to facilitate the demerger through a Placing, Subscription and additional proceeds from a Retail Offer.
The funds raised will support Ingenuity with sufficient medium-term funding as it approaches positive cash generation on a standalone basis.
The raise will also include a retail offering that will be open to new and existing investors.
The logic behind the separation of Ingenuity from THG PLC, which is referred to as RemainCo, will become a much simpler, cash generative business that will be capable of paying future dividends, have an improved balance sheet, capex and cashflow profile.
RemainCo will consist of THG Beauty and THG Nutrition and THG Beauty, which it says in a trading statement today has grown third quarter revenues by 2.8% to £254.7m.
The Group expects that the RemainCo business post completion of the Ingenuity demerger, will be admitted to the ESCC segment and therefore eligible for FTSE index inclusion.
The trading statement also shows THG Ingenuity continuing to grow revenue by 16.0% to £44.0m.
Matthew Moulding, CEO of THG commented: “Today we have separately announced significant progress on our strategy to demerge THG Ingenuity into a private company supported by major shareholders. THG PLC will remain a listed leading consumer brands group, with our planned transfer to the ESCC well on track.
“It was especially pleasing to see another solid quarter of delivery from both our Beauty and Ingenuity businesses, rewarding the significant overhaul of their respective operating models during 2022 and 2023. The short-term disruption from the major rebrand of Myprotein is now behind us, and we were pleased that in September Nutrition delivered its best sales performance since January.
“We are also proud to be recognised in the top 250 companies worldwide for our contribution and efforts in sustainability thanks to our ongoing progress towards our net zero goals.
“Preparations for our busiest trading period are well advanced with efficiencies across the network over the last twelve months delivering further benefits for our Ingenuity clients to aid new customer acquisition.”