Manchester-headquartered THG’s prospects of remaining in the FTSE 250 remain on a knife edge.
The online retailer was only included in the FTSE 250 Index in March and the quarterly FTSE index review is based on changes to market cap.
In March, THG’s founder and CEO Matt Moulding hailed the company’s inclusion as an ‘important moment in THG’s evolution’ following the demerger of THG Ingenuity.
The move was seen as a crucial step in raising the company’s visibility and opening up stock to index investors and active mid cap index investors.
However, Alliance News reported on Tuesday that THG was one of three companies about to exit the FTSE 250.
According to data from FTSE Russell, THG could lose its place alongside Bellevue Healthcare Trust and Mobico Group and be replaced by Avon Technologies, Gamma Communications and Wickes Group.
The final index review is released next week.
If THG does lose its place on the FTSE 250 it will drop into the Small Cap Index.
THG’s share price rallied on Wednesday and in early trading on Thursday stood at 24.89 – giving it a market cap of £347m.
This compares with a share price of 23.96p and a market cap of £337m at the start of Wednesday.
One analyst told BusinessCloud: “It’s in the balance with a week to go. A 10 per cent uplift to its share price would probably be enough to keep it in the FTSE 250.
“If it does drop into the Small Cap Index it will be one of the biggest constituents.
“If the recently issued convertible loan of £68m converts to equity THG would go straight back into the FTSE 250, were it to fall out in this review.”
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Mobico Group’s share price has dropped from 62.75p to 29.18p over the same period while Bellevue Healthcare Trust has performed better, dropping from 128p on March 24th to 118.60p.
THG was only added to the FTSE 250 Index in March, alongside Hiscox and Atalaya Mining Cooper.
THG has been approached for a comment.
Writing earlier this month, Moulding revealed THG had cut its headcount by around 40 per cent in the last three years.
He said the combination of reducing the firm’s global workforce from around 10,200 to 6,300 in the three years to 2024, and cutting back on capex, has saved THG more than £200m annually.
The 53-year-old said by reinvesting the savings back in the business, THG was perfectly placed to capitalise on the demerger of Ingenuity and a rebrand of Myprotein.
Last month THG rejected a bid worth £400-600m from former director Iain McDonald for its Myprotein brand and Moulding opened up about some of the challenges they the brand has faced.
THG is a global e-Commerce group headquartered in Manchester, operating through two leading consumer businesses: THG Beauty and THG Nutrition.
THG Beauty operates prominent online platforms including Lookfantastic, Dermstore and Cult Beauty.
THG’s share price at the time of its 2020 IPO was 500p