Manchester-headquartered THG has reported better-than-expected first-half revenues and a sharp rise in profitability, powered by growth at Myprotein and its online beauty platforms.
Group revenue reached £828.7m in the six months to June 30, up 5.8% on a reported basis and 7.2% on a continuing constant-currency basis – ahead of the 6.5% growth guidance issued in June.
Adjusted EBITDA increased 78.3% to £42.8m. On a like-for-like basis, excluding the contribution made by Claremont Ingredients before its £103m sale last August, it was up 109% from £20.5m.
The improvement lifted THG’s adjusted EBITDA margin from 3.1% to 5.2%, while its statutory operating loss narrowed from £30m to £10.6m.
The group, which owns Myprotein and beauty platforms including Lookfantastic, Cult Beauty and Dermstore, said it had also delivered its strongest first-half free cash flow performance since 2021. Cash and available facilities stood at £238.7m, although net debt was £329.7m at the period end.
Myprotein drives growth
THG Nutrition was the standout performer, with revenue rising 9.2% on a continuing constant-currency basis to £328.5m. Excluding Asia, growth reached 12.1%.
Adjusted EBITDA from the division more than trebled on a like-for-like basis, rising from £8.5m to £26m, while its gross margin improved from 43.4% to 44.6%.
THG said the gains reflected its strategy to reduce the business’s exposure to record whey prices by expanding into higher-margin categories including hydration, creatine, collagen and activewear.
Activewear had a particularly strong half, with 18.5% of Myprotein’s online customers adding an activewear product to their basket.
The brand sold 58.5m products worldwide during the period, up 57%, and THG expects that figure to exceed 130m across the full year.
Matthew Moulding, chief executive of THG, said: “THG delivered a strong first half, reflecting our successful transition from a capex-intensive technology and consumer brands group into a highly profitable global leader in Nutrition and Beauty, focused on delivering sustainable growth in free cash flow. As a business, we delivered strong revenue growth and our Adjusted EBITDA more than doubled, driven by a stellar performance from the Myprotein brand.”
He added: “The Group is now clearly reaping the rewards of Myprotein’s global rebrand delivered across 2023 and 2024, alongside the expansion of the brand into licensing, activewear and higher-margin categories. Brand recognition continues to reach record highs, supporting a 57% increase in Myprotein branded products sold worldwide in H1, to 58.5m products. The brand is on track to sell over 130m products in FY 2026, which we believe makes Myprotein not only the world’s largest sports nutrition brand, but also the fastest-growing established brand by product volumes.”
Beauty maintains momentum
THG Beauty generated revenue of £500.2m, representing growth of 5.9% on a continuing constant-currency basis, while adjusted EBITDA increased 23.8% to £25m.
UK retail revenue grew 6.7%, supported by new premium brand launches, market-share gains and continued growth in skincare. Skincare sales at Lookfantastic increased 17.4% in the year to date.
The platform’s loyalty membership grew by around 9% to 3.5m, with returning customers accounting for approximately 90% of revenue, up from 89% a year earlier.
Korean beauty was another significant growth area, attracting more than 64,000 new customers during the first half.
THG said early sales of its beauty advent calendars had also been strong.
Near-term slowdown expected
Despite the first-half performance, THG expects revenue growth to slow to around 2% during the third quarter.
The group pointed to pressure on discretionary consumer spending, the European heatwave and new EU duties affecting beauty products, as well as the timing of some own-brand sales moving into the fourth quarter.
Growth is expected to recover to between 6% and 7% in the final three months of the year.
THG maintained its full-year expectations, with analyst consensus currently forecasting revenue of £1.802bn, adjusted EBITDA of £101.7m and free cash flow of £31.1m.
The group expects to deliver positive free cash flow of between £25m and £35m this year, with lower whey costs and improved working capital forecast to support a “material” further increase in 2027.
It is also pursuing a potential VAT refund of up to £78m from HMRC relating to protein and supplement products. Together with earnings growth, THG believes this could bring net debt down to around one times adjusted EBITDA by the end of next year.
However, investors gave the results a muted reception, with THG shares opening almost 3% lower. At the start of trading on Thursday, the stock was down around 6% over five days, 33% since the beginning of the year and approximately 95% over five years.
