THG’s CEO Matt Moulding loves proving his doubters wrong – not that he cares what people think.
His approach is perfectly summed up by a quote on his Instagram profile. “‘I’ve never been disliked by anyone I’d want to trade places with,” it reads.
It was vintage Moulding that he should use the news that THG had doubled its money by selling Claremont Ingredients for £103m to renew his attack on investment bank Numis (now Deutsche Numis).
As previously reported by BusinessCloud, Numis had been involved in THG’s IPO in 2020 but in 2021 they issued a memo suggesting THG had ‘irregularities in accounting’ – which they later retracted and apologised for.
Moulding has accused the investment bank of trying to discredit THG and him personally but analysts I’ve spoken to said they’re more interested by THG’s stated ambition to target a ‘neutral net cash / net debt position’.
The Claremont deal will reduce THG’s net debt from £330m to £230m in a stroke but how will Moulding get debt down to net zero without selling more of the company assets?
One analyst told BusinessCloud: “The only way he’s going to get net debt to zero in the short-term or medium-term is by adding a disposal to THG’s increasing cashflow.”
Another option to reduce debts would be to use THG’s profits – with EBITDA predicted to be £74m in 2025 and £105m in 2026 – but that would probably take several years to achieve.
Given Moulding’s stated ambition is to ‘streamline the group and focus on our core strengths’ the smart money would appear to be on more disposals – but which ones?
Nobody that I spoke to believes Moulding would ever consider selling THG’s prize asset Myprotein.
It was only this week that THG announced it was expanding its global footprint with a major new licensing deal that will bring Myprotein to more consumers in South Korea.
In April, THG ‘unequivocally’ rejected a bid worth up to £600m from former director Iain McDonald for Myprotein.
Myprotein ‘not for sale’
Myprotein has already announced it will be limiting price increases in the second half of 2025 as it looks to triple the number of retailers selling the product from 34,000 ‘doors’ to 100,000.
A more likely target for sale would be New Jersey-based prestige beauty developer and manufacturer Bentley Laboratories, which supplies THG and third parties.
THG acquired the US manufacturer of prestige skincare and haircare products in May 2021 for $255m on a cash and debt-free basis.
Speaking at the time of the deal Moulding said: “Bentley provides THG with US-based, pre-eminent in-house skincare and haircare new product development capabilities and manufacturing.”
Another asset that could be sold is US prestige skincare brand Perricone MD, which THG bought for $60m in cash in 2020.
Explaining the reason for deal at the time, Moulding said: “Perricone MD has a strong heritage, a loyal customer base and is a truly exciting addition to THG’s beauty portfolio.”
No evidence
I should point out that I’ve got no evidence that THG is looking to sell Bentley Laboratories, Perricone MD or any of its businesses – but some analysts I spoke to think he might.
However, another disposal at a big premium to cost – similar to Claremont Ingredients – would make a significant dent in THG’s debts and prove that Moulding was right about the inherent value in the group.
Watch this space.
$255m acquisition of New Jersey based prestige beauty developer and manufacturer, subject to regulatory approval in the United States
FY 2022 impact for THG of c. $77m revenues and c. $15m adjusted EBITDA
THG PLC (“THG” or the “Group”), the proprietary technology platform specialising in taking brands direct to consumers (“D2C”), has conditionally agreed to acquire Bentley Laboratories LLC (“Bentley”), an innovative developer and manufacturer of prestige skincare and haircare products. The total consideration of $255m represents a c. 17x FY 2022 adjusted EBITDA multiple, with the transaction expected to complete within 30 days, following regulatory approval in the US. The deal is immediately earnings enhancing.
No timetable. Will this reduction in net debt from further disposals?
However
- The proceeds from the £103m cash disposal will contribute towards reducing net leverage and borrowing costs in line with THG’s capital allocation strategy targeting a neutral net cash / net debt position. Reducing net debt from £330m to £230m. No timetable. Will this reduction in net debt from further disposals?
MM is highlighting value of parts of the business.
£100m is 25% of THG’s current market cap.
£7m is less than 10 per cent of the EBITDA
THG lose that after that EBITDA
- Claremont’s FY 2024 revenue was £14m with an adjusted EBITDA contribution of.£7m, with annual capex of less than £1m.
- Group FY 2025 EBITDA and FY 2026 EBITDA are anticipated to be reduced by c.£5m and c.£10m respectively following the disposal.
Financial results
- THG’s interim results will be published in September 2025, with revenue performance in line withAGM statement guidance.
- The adjusted EBITDA for the first half of 2025 (H1) was £24m (which compares with £37.1m on the same period – H1 – in 2024)
- The dip in profits reflect substantially higher whey pricing YoY in Nutrition.
- Cash and available facilities of £278m, following the Q1 2025 refinancing which substantially reduced gross debt
- Net debt of c.£330m (compares with £350m in H1 2024), before net proceeds from the disposal of Claremont (proforma c.£230m). Q: What does this mean?
- The second half of the year remains the seasonally strong cash generative period.
Strategic update, H2 2025 and FY 2026
- THG Nutrition delivered double-digit revenue growth across June and July combined. Between +10% and +12% revenue growth is now expected in H2 for THG Nutrition.
- Myprotein will limit price increases in H2 2025, enabling further acceleration of its installed base in global offline retail from c.34,000 doors today, towards a target of 100,000. Q: What does this mean? Keeping prices lowas they expand footprint into retailers. Ambitious plans to get into 100,000 retailers
- Adjusted EBITDA of c.£50m for H2, 2025. £75m EBITDA.
- Q: What assets? Commentators highlight the acquistatoon of he US beaity manufacturing biisness in $220m
The Hut Group is set to acquire US-based manufacturer of skincare and haircare products, Bentley Laboratories, in a $255 million (£180 million) deal.
The purchase is expected to complete within the next 30 days.
The Hut Group is currently a customer of Bentley which manufactures its Perricone MD brand.
Among several bus that he made post IPO
THG Holdings plc (“THG” or the “Group”), the global technology platform company, specialising in taking brands direct to consumers, today announces the acquisition of Perricone MD, a pre-eminent US prestige skincare brand, for $60 million in cash.
Founded in 1997, Perricone MD is a science-led topical skincare brand. Its skincare formulations and supplements address a broad range of dermatological needs, supported by extensive clinical and consumer studies. The brand has approximately 100 product patents and is committed to no-animal testing, clean ingredients and gluten free formulations.
As the digital-strategic leader in the beauty market, the Group is able to be extremely selective with acquisitions and it has acquired 100% of Perricone MD for a 1x continuing sales multiple. Perricone MD is profitable at the EBITDA level although THG anticipates minimal impact in the current financial year. As Perricone MD is transitioned by THG Ingenuity into a digital-first and global brand it is expected to be earnings accretive by the end of the financial year 2021, achieving double digit EBITDA margins consistent with previous THG Beauty brand acquisitions.
An analyst told BC: ‘the onkly wat he’s going to get net debt to zero in the ST and MT is by adding a dispoal to THG’s increasing cashflow.
6 beauty brand; portals.
“He’ll keep the portals in beauty and Myprotein.”
He’s not going to sell Myprotein
- H2 has also started well for THG Beauty, with an improved revenue growth rate.