THG’s big shake-up: What Ingenuity split, beauty growth and a £30m VAT boost mean after ‘transformative’ year

Manchester-based THG has released its first trading figures since the group effectively split in two with the demerger of its THG Ingenuity division.

They’ve revealed a mixed picture, with sales declining for the fourth quarter, but the group stating that it was on track to meet its full year expectations.

It’s also potentially in line for a £30m VAT rebate following a tribunal ruling over 0% VAT which could impact Myprotein brands, Impact Whey Protein and Impact Whey Isolate.

In a ‘transformative’ year the company completed the demerger of THG Ingenuity and THG PLC is now a “global, cash generative, health & wellness consumer brands group,” according to the group.

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The figures for the fourth quarter of 2024 show that its Beauty and Nutrition brands declined in revenue year on year (-1.3% and -12.7% respectively), but Ingenuity was up 22.9%.  Overall revenue was down -2.6% year on year.

However, it should be noted that on a Constant Currency basis, ie without taking into effects the movement of exchange rates, it’s a vastly different picture for THG Beauty, which over the year saw a +4.6% increase and +0.8% over the final quarter of the year.

In total THG’s revenue for the year, including Ingenuity was £1,879.6m

“I’m impressed by the Group’s agility and resilience during a year of significant change for THG, ranging from the Demerger of our Ingenuity business, to the sale or discontinuation of some non-core business units, and a major global rebrand of Myprotein in Nutrition,” explained Matthew Moulding, CEO of THG.

“Our Beauty business had a standout year, underpinned by strong performances in the UK and US. The continued success of our customer loyalty and reward program, and the opening of our first-ever Lookfantastic physical store, further cement our leadership position in the global Beauty market. These achievements demonstrated significant progress against our strategic priorities and set the stage for an even more remarkable 2025.

“Despite the transitory headwinds, Myprotein achieved several notable successes: entry into the dairy market through the launch of a long-term partnership with Müller; the commencement of a co-manufacturing relationship in Japan, the expansion of our Iceland partnership, and many other licensing and retail listing agreements. We are excited to further deepen our retail expansion strategy internationally in the forthcoming year.

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“I would like to thank everyone involved at THG for their immense efforts during a transformative year for the business. I’m looking forward to further strong progress in 2025.”

Returning to the potential VAT windfall, the group is referring to a Tribunal judgement earlier this month, when Global By Nature Limited won a case that its Sunwarrior protein products should be subject to 0% UK VAT and it was therefore eligible for a retrospective VAT repayment.

THG said that since the VAT rules in relation to Sports Drinks were implemented in 2012, it’s paid VAT against its powdered products in line with market practice. However, if it can make a successful claim, using the arguments from the Global By Nature case it could be due a 4-year retrospective claim of around £30m.

Looking ahead, the group stated it expected mid-to high single digit growth.

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