17 September 2024

 

THG PLC

 

Interim results for the half-year ended 30 June 2024

 

 

Group continuing revenue and adjusted EBITDA growth of +2.2% CCY and +1.6% respectively

 Record H1 adjusted EBITDA across Beauty and Ingenuity helping to offset transitory headwinds in Nutrition

 

Improving momentum in Nutrition, expected to exit Q3 in revenue growth

 

THG PLC to apply to transfer to the Equity Shares (commercial companies) ("ESCC") category

 

Progressing options to demerge Ingenuity, resulting in a highly cash generative group

 

 

 

THG PLC ("THG" or the "Group"), announces its interim results for the half-year ended 30 June 2024 ("H1 2024").

 

 

H1 2024 Group trading performance

£m	H1 2024	H1 2023[1]	YoY[2] change	CCY[3]  change
THG Beauty	531.0	502.5	+5.7%	+6.9%
THG Nutrition	299.9	336.7	-10.9%	-7.5%
THG Ingenuity (external)	80.2	71.2	+12.6%	+14.1%
Group (continuing)[4] revenue	911.1	910.4	+0.1%	+2.2%
Discontinued revenue	22.9	58.9	-61.2%	-60.7%
Total revenue	934.0	969.3	-3.6%	-1.7%
Continuing adj EBITDA[5]	52.3	51.5	+1.6%
Continuing adj EBITDA %	5.7%	5.7%	-
Adj EBITDA[6]	48.8	47.1	+3.6%
Adj EBITDA %	5.2%	4.9%	+30bps
Operating loss[7]	(84.4)	(99.5)
Net Debt[8]	(350.5)	(268.3)

 

  

Matthew Moulding, CEO of THG, commented:

 

"The Group continued to deliver against its strategic priorities through H1, with the performances of both Beauty and Ingenuity particularly strong. Reporting another 6-month period of continuing sales and adjusted EBITDA growth was especially pleasing given the FX headwinds suffered within our Nutrition business, which negatively impacted H1 profitability by a further c.£5m. Local manufacturing and fulfilment is now live in Japan which will steadily scale to reduce exposure.

 

"Beauty revenue growth of +6% supported a record H1 adjusted EBITDA performance, an improvement of c.170% as the business model changes we made to focus on more profitable orders located closer to our global distribution hubs, come to fruition. 

 

"Further contract wins within Ingenuity is underpinning a steady acceleration in external revenue growth following the repositioning of the business to focus on higher value, multi-service clients. H1 adjusted EBITDA was a record performance, up +227% YoY, almost double the previous best performance in H1 2021.  

 

"The major rebrand of our Myprotein business is nearing completion, and despite the transitory rebrand disruption this has brought, we have seen positive reactions from global consumers, major offline retailers, and licensing partners alike.

 

"Recent retail listings include GNC and Meijer in the US, as well as WH Smith and Holland & Barrett in the UK. Within licensing, we entered into an exciting new long-term partnership with Müller, with co-branded dairy products launched across major retailers. Now the rebrand is largely complete, our innovation pipeline will reaccelerate.  

 

"Momentum in Nutrition is especially pleasing, with an expected return to revenue growth in September, providing a strong platform for both peak trading and the year ahead. 

 

"Following the completion of the FCA listing regime review, we are taking the appropriate steps to transfer to the ESCC category. We welcome the output to simplify the listing regime, and expect the Group to be eligible for inclusion in the FTSE UK Index Series.

 

"Finally, after extensive discussions with shareholders over the past 12 months, THG is progressing options to demerge THG Ingenuity, leaving our highly profitable and cash generative global Beauty and Nutrition businesses within THG PLC. The appropriate tax clearances have been received, while the necessary separation work has previously been undertaken."

 

 

Outlook and guidance

 

·      The second half of the year remains the Group's most profitable and cash generative period, with revenue growth and seasonal weighting in Beauty and Ingenuity expected to largely mitigate the Nutrition YoY decline.

 

·      We are pleased with underlying trading patterns and notably a recent improvement in Nutrition which we expect to exit Q3 in revenue growth, supported by a recovery in average selling prices ("ASPs"). A key variable beyond our control is the Japanese Yen headwind (H1 2024 impact: c.£5m), however, overall we expect to be towards the lower end of the analyst consensus EBITDA range[9].

 

·      Our estimates are supported by:

 

o  Beauty and Ingenuity delivering YoY adjusted EBITDA margin progression for the full year, with Ingenuity adjusted EBITDA anticipated to be ahead of market expectations, noting the strong H1 performance and the new customer wins in Q3.

 

o  an improving revenue performance in online Nutrition as ASPs normalise following the extensive global rebrand. Q3 exit revenue growth supports this view, coupled with a similar 12-month revenue trajectory evidenced during the previous Myprotein rebranding in 2018.

 

o  offline Nutrition revenues continuing to deliver substantial growth, with adjusted EBITDA margins already in line with medium-term guidance (c.12%), supported by an increasing number of licensing partnerships.

 

o  distribution cost and headcount management initiatives delivering a much greater level of operational leverage.

 

·      Year-end net debt is expected to be broadly unchanged YoY, with an improvement in cash generated from operating activities and lower capex in H2. Working capital improvements will come from the receipt of previously trapped European VAT, and normalisation of the business mix between Beauty and Nutrition.

 

·    Nutrition adjusted EBITDA margin recovery back to medium-term guidance (c.12%) in FY 2025 (FY 2023: 13.5%) will be supported by, normalising ASPs, significant growth in offline retail and licensing sales, and a greater proportion of Japan orders being locally fulfilled and manufactured.

 

 

H1 2024 segmental summary

 

 

£m	THG Beauty	THG Nutrition	THG Ingenuity	Other	Central	Inter-group elimination	Continuing Total	Discontinued categories	H1 2024 Total
Revenue	531.0	299.9	80.2	-	-	-	911.1	22.9	934.0
Inter-segment revenue	-	-	225.6	-	-	(225.6)	-	-	-
Total revenue	531.0	299.9	305.8	-	-	(225.6)	911.1	22.9	934.0
adj EBITDA	32.6	19.6	11.0	-	(10.9)	-	52.3	(3.5)	48.8
adj EBITDA %	6.1%	6.5%	3.6%		-	-	5.7%	(15.4)%	5.2%

 

 

H1 2023 segmental summary[10]

 

 

£m	THG Beauty	THG Nutrition	THG Ingenuity	Other	Central	Inter-group elimination	Continuing Total	Discontinued categories	H1 2023 Total
Revenue	502.5	336.7	71.2	-	-	-	910.4	58.9	969.3
Inter-segment revenue	-	-	248.8	-	-	(248.8)	-	-	-
Total revenue	502.5	336.7	320.0	-	-	(248.8)	910.4	58.9	969.3
adj EBITDA	12.1	46.9	3.4	-	(10.9)	-	51.5	(4.4)	47.1
adj EBITDA %	2.4%	13.9%	1.0%		-	-	5.7%	(7.5)%	4.9%

 

H1 2024 financial highlights

 

·      Group CCY continuing revenue of £911.1m, +2.2% YoY, with strong growth in Beauty and external Ingenuity helping offset online Nutrition.

 

·      Total CCY revenue of £934.0m (-1.7% YoY) includes £22.9m (H1 2023: £58.9m) of revenue relating to discontinued categories as the Group continued to execute its plan of business simplification and operations streamlining. Group UK revenues grew strongly at +9.9%.

 

·      Customer loyalty and direct engagement continues to build, driven by App participation which accounted for 26.0% of Group D2C revenue (H1 2023: 16.1%).

 

·      Adjusted gross margin remained broadly stable, with Beauty and Ingenuity margin progression offsetting a lower than anticipated result in Nutrition, driven by rebrand product clearance and the return of whey price inflation through Q2. Gross margin has expanded in THG Beauty through online retail, as previous actions to de-prioritise lower margin territories continue to yield progress.

 

·      Substantial reduction in adjusted distribution costs YoY to 11.5% of revenue, reflecting the continued optimisation of the Group's automation investment and ongoing efficiencies in the global delivery network. These optimisations have accelerated the speed of order processing and delivery to the end customer, enabling much later order cut off thresholds and shorter delivery times from point of order. These market leading service standards to customers, allied with the efficiency of operations are now playing an impactful role in supporting Ingenuity recurring revenue growth.

 

·      Administrative costs remain well controlled, with ongoing refinements to marketing strategies and greater app participation helping to offset inflation in marketing, and investment to enhance brand awareness. Organisational effectiveness initiatives implemented in Q3 2024 will further rationalise Group headcount YoY, as we drive a leaner structure to support sustainable growth and margin progression.

 

·      Continuing adjusted EBITDA for the Group was in line with prior year (H1 2024: £52.3m vs H1 2023: £51.5m) at a margin of 5.7%, reflecting effective management of costs, and the improving profitability of Beauty and Ingenuity, offsetting lower Nutrition online ASPs, Asia FX headwinds and whey input cost inflation. On a reported basis (inclusive of losses from discontinued categories), adjusted EBITDA improved to £48.8m (H1 2023: £47.1m).

 

·      The successful exit of loss-making discontinued categories and non-core assets generated a one-off non-cash charge of £9.3m, contributing to the operating loss of £84.4m (H1 2023: £99.5m), an improvement of £15.1m YoY.

 

·      Underlying cash generation[11] improved c.12% over the last 12 months (vs LTM June 2023), with an outflow of £63.8m (LTM H1 2023: £72.6m). Working capital movements reflect ongoing inventory efficiencies and sales mix towards Beauty (typically shorter payment terms for third party suppliers), with capex investments largely into Ingenuity operational infrastructure and platform development (a 25.2% reduction YoY).

 

·      The Group had cash and available facilities of £457.7m at the period end, and expects to refinance its existing debt facilities, largely maturing in December 2026, within the next 12 months.

 

 

Business strategic and operational highlights

 

THG Beauty

 

·      Stand-out performance delivered by THG Beauty with a record H1 adjusted EBITDA of £32.6m (H1 2023: £12.1m), following the successful execution of the market prioritisation strategy, retail and own-brand revenue growth.

 

·      Volume recovery within beauty manufacturing (following prior year destocking) alongside cost saving initiatives implemented during 2023, has supported margin progression back to historical averages and in line with adjusted EBITDA medium-term guidance (H1 2024: 6.1% vs H1 2023: 2.4%).

 

·      Brand partnerships continue to strengthen with increasing share of retail brand investment, curated edits to aid product discovery, and new and exclusive launches notably within fragrance, indie and dermatological skincare.

 

·    Active customers in THG Beauty (LTM[12]: 8.4m, -1.6%), reflects the strategic decision to target marketing investment towards more profitable territories and products, whilst retaining higher spending and higher frequency customers. This improvement in mix is delivering greater profitability per order across a more efficient cost base. Active customers were in growth across the UK, US and MENA key markets (LTM: +3.0%).

 

·      Lookfantastic has significantly improved its UK brand equity through Q2[13], growing spontaneous brand awareness (+3%), brand consideration (+7%) and brand preference (+18%), supported by 5* Trustpilot scores. It continues to attract beauty enthusiasts into its loyalty scheme (2.4m customers registered) with spend per customer over 20% higher. 

 

·      Following the announcement of a global licensing partnership deal with luxury hotel amenities supplier Vanity group, THG Beauty's prestige own brand portfolio is set to expand its presence into Park Plaza and Atour hotels, capturing brand awareness in a further 46,000 rooms across the UK, Europe and China.

 

 

THG Nutrition

 

·      H1 adjusted EBITDA of £19.6m (H1 2023: £46.9m) was incrementally impacted by c.£5m YoY due to continued FX headwinds in Asia, principally the weaker Japanese Yen (Myprotein's second largest market). Following a two-year project, local manufacturing recently commenced which will steadily scale to reduce exposure to Japanese Yen FX movements. 

 

·      With the rebrand now largely complete, peak disruption from the Myprotein rebranding has been felt. Performance was adversely affected by stock rotation into the rebranded Myprotein packaging, impacting online ASPs, which were c.11% lower YoY, with the smaller curated ranges for offline global retail seeing minimal disruption.

 

·      Promotional activity was higher than anticipated online as old branded stock was sold through. Whilst this reduced online ASPs, this gave more value to our online customers and protected developing offline relationships by removing a need to use offline clearance channels. Myprotein last underwent a rebrand in 2018, at which point ASPs reduced by c.8% (vs FY 2017 +c.8%), before returning to growth of +c.14% in 2019.

 

·      Customer reaction to the rebrand has been positive, with brand awareness, consideration and perception all demonstrating YoY improvements, notably via connections to HYROX and Formula 1. Myprotein benchmarks highly in driving customers efficiently through the funnel from consideration to purchase, supported by an +18% increase in new app users YoY.

 

·      Offline performance continues to be strong, helping to mitigate the total brand sales decline to -6.8% CCY. The rebrand has been fundamental in enabling access to new retail markets and partners, allowing Myprotein to expand its reach and accelerate growth in retail and licencing. During the first half, THG Nutrition has developed partnerships with:

 

o  Müller to create a tailored range of high-protein dairy products that cater for the active health-conscious customer. The long-term 'Müller x Myprotein' collaboration has launched in a range of retailers, supported by online and offline activations.

 

o  Pre-eminent US specialist health retailer 'GNC', for in store distribution to broaden awareness and complement the US D2C strategy. Building on partnerships with Costco and Meijer.  

 

o  'HYROX', the fastest growing mass participation sport, to develop a performance range with hydration support in mind. The range is available D2C, in addition to Sports Direct and Sainsbury's.

 

o  Specialist UK food brand 'Kirsty's' to create a nutritionally balanced, high protein 'on-the-go' and convenience range. Launching in Ireland in October and available in selected UK grocers from Q1 2025, this partnership takes Myprotein into a new fast-growing convenience category.

 

 

THG Ingenuity

 

·      Further to implementing a simplified and focused go-to-market strategy, substantial growth in high-quality external recurring revenues[14] has been delivered (+33% June), with new clients onboarded and a strengthening pipeline.

 

·      Substantially improved adjusted EBITDA margin performance (H1 2024: 3.6% / H1 2023: 1.0%), due to a planned shift away from lower-value clients and a focus on more profitable services.

 

·      Leveraging our investment in automated fulfilment capabilities, during H1 we accelerated our business development focus towards clients requiring fulfilment and courier management services to improve their checkout to delivery experience. Improvements in order processing efficiency has enabled a market-leading next-day delivery cut-off to 1am, meeting the increasing demands from customers for shopping flexibility.

 

·      Across the three pillars of e-commerce enablement; technology, digital marketing and fulfilment, Ingenuity is the partner of choice for an increasing roster of international brands and retailers. New and expanded partnerships developed in key markets during H1 2024 included:

 

o  CDS Superstores T/A wilko and The Range: Fulfilment and courier management services for the home and garden retailer over a three year term, utilising recent automation investment at THG Ingenuity's Omega distribution centre;

 

o  Global partnership with HYROX, building on the successful THG Nutrition collaboration. THG Ingenuity will provide a complete commerce solution of technology, fulfilment and digital marketing services, enabling HYROX to build on the brand demand and continue its rapid global growth;

 

o  Holland & Barrett: Building on the recent D2C fulfilment partnership, THG Ingenuity has extended its service offering into THG Studios for digital creative and content production for a selection of new product launches in support of their programme of change to become the trusted health and wellness partner globally;

 

o  Disney: Expanded strategic relationship to deliver creative production of product and lifestyle content for Disney Store global sites, and television commercial content plus user generated content for social platforms;

 

o  ACG: Enabling the wellness innovation company to launch four full-service e-commerce experiences for specialist brands Eimele and SRW in the US and ANZ. An additional 15 sites (including UK) are due to launch across their portfolio by the end of 2025.

 

UK listing regime review

 

In a separate announcement today, the Group announces its intention to transfer the listing category of all its ordinary shares to the ESCC category.

 

Analyst and investor conference call

 

THG will today host a conference call and webcast for analysts and institutional investors at 9.00am (UK time) via the following links:

 

To register for the webcast, please use the below link:

https://stream.brrmedia.co.uk/broadcast/66c4bd2ba1c3df3d282ca936

 

To ask questions, you must dial in via conference line using the below details:

·      Confirmation password: THG Interim Results

·      UK dial in: +44 (0) 33 0551 0200

·      US dial in: +1 786 697 3501

 

A playback of the presentation will be available on THG's investor website at www.thg.com/investor-relations later today.

 

For further information please contact:

 

Investor enquiries - THG PLC
Greg Feehely, SVP Investor Relations Kate Grimoldby, Director of Investor Relations and Strategic Projects	[email protected]
Media enquiries:
Sodali & Co - Financial PR adviser	Tel: +44 (0) 20 7250 1446
Victoria Palmer-Moore/Russ Lynch/Sam Austrums	[email protected]
THG PLC Viki Tahmasebi	[email protected]

ENDS

Notes to editors

THG PLC operates three distinct businesses in Beauty, Nutrition and Ingenuity, each scaled from the UK to hold global leading positions in their respective sectors.

Cautionary Statement

Certain statements included within this announcement may constitute "forward-looking statements" in respect of the group's operations, performance, prospects and/or financial condition. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words and words of similar meaning as "anticipates", "aims", "due", "could", "may", "will", "should", "expects", "believes", "intends", "plans", "potential", "targets", "goal" or "estimates". By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions and actual results or events may differ materially from those expressed or implied by those statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. No responsibility or obligation is accepted to update or revise any forward-looking statement resulting from new information, future events or otherwise. Nothing in this announcement should be construed as a profit forecast. This announcement does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares or other securities in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the shares or other securities of the Company. Past performance cannot be relied upon as a guide to future performance and persons needing advice should consult an independent financial adviser. Statements in this announcement reflect the knowledge and information available at the time of its preparation.

 

 

THG PLC

 

Interim results for the half-year ending 30 June 2024

 

 

Chief Financial Officer Review

 

Our H1 performance was characterised by profit improvements in THG Beauty and THG Ingenuity from both a cash and adjusted EBITDA margin perspective, offset by a more challenging performance in THG Nutrition.

 

·      Group Adjusted EBITDA increased by c. £1.7m YoY on a reported basis and £0.8m on a continuing basis, with luxury goods classified as discontinued categories in the first half, following the sale to the Frasers Group. Within this, we saw overall gross margin reflect the mix of the three businesses including a marked improvement in Beauty sales performance. Distribution costs saw a notable improvement YoY, with administrative spend broadly neutral.

·      THG Beauty adjusted EBITDA margin of 6.1% (H1 2023: 2.4%) has more than doubled YoY following a return to revenue growth, the positive impact of the strategy to focus on higher margin sales and the normalisation of manufacturing profitability.

·      THG Ingenuity revenue improved with double digit percentage growth in external sales to £80.2m (H1 2023: £71.2m). This topline growth, combined with cost efficiencies, more efficient fulfilment services and restructuring activities led to adjusted EBITDA margin more than trebling YoY to 3.6%.  

·      H1 2024 has been a more challenging period for THG Nutrition than anticipated, driven by online D2C channels with offline retail and licensing continuing to make progress. Revenue was adversely impacted by stock rotation into the rebranded Myprotein packaging, impacting online ASPs. Recent volatility in whey commodities and persistent weakness of the Japanese Yen FX headwinds from Asian currencies has also impacted key markets. The consumer environment remains uncertain in specific territories where inflation and rising interest rates have impacted the cost of living. 

 

The Group operating loss decreased to £84.4m (vs H1 2023 £99.5m). Most notably, distribution costs have reduced as a percentage of revenue, including the rationalisation of headcount. Positive management actions continue with the exiting of loss making categories. Cash adjusted items have reduced substantially relative to historic levels, but were higher YoY at £10.5m vs. £5.2m due to the restructuring actioned in the first half as well as the costs of integrating Biossance.

 

Net debt before lease liabilities at H1 2024 totalled £350.5m (H1 2023: £268.3m). Liquidity remains strong however, despite the weaker online Nutrition performance, with cash of over £287.7m which when combined with the undrawn RCF leaves c. £450m of liquidity. We have seen strong capital discipline with capex spend in H1 of £53.9m vs. £72.1m in H1 2023. This capital discipline combined with stable financing costs, and a continued positive working capital trajectory, led to the last 12 months free cash outflow being broadly consistent with year-end, but for the £52.0m disposal proceeds received in H1 of 2023.

 

CONSOLIDATED INCOME STATEMENT

ALTERNATIVE PERFORMANCE MEASURES[15]
	Six months ended 30 June 2024 £'000			Six months ended 30 June 2023 (Restated) £'000		Movement
Adjusted gross profit		395,653			424,157	(28,504)
Gross margin % (adjusted)		42.4%			43.8%	(1.4)%
Adjusted distribution costs		(107,541)			(143,713)	(36,172)
As a % of total revenue		11.5%			14.8%	3.3%
Adjusted administrative costs		(239,337)			(233,349)	5,988
As a % of total revenue		25.6%			24.1%	(1.5)%
Adjusted EBITDA		48,773			47,095	1,678
Adjusted EBITDA %		5.2%			4.9%	0.3%
EBITDA losses from discontinued categories		3,530			4,404	(874)
Continuing adjusted EBITDA		52,303			51,499	804
Continuing adjusted EBITDA %		5.7%			5.7%	-

 

STATUTORY RESULTS

 

			Six months ended 30 June 2024							Six months ended 30 June 2023
		Before Adjusted Items		Adjusted Items		Total		Before Adjusted Items			Adjusted Items		Total
			£'000		£'000	£'000				£'000		£'000		£'000
Revenue			933,969		-	933,969				969,260		-		969,260
Cost of sales			(553,661)		(8,896)	(562,557)				(554,721)		(7,174)		(561,895)
Gross profit			380,308		(8,896)	371,412				414,539		(7,174)		407,365
Distribution costs			(117,469)		(3,652)	(121,121)				(152,504)		(3,715)		(156,219)
Administrative costs			(326,881)		(7,826)	(334,707)				(330,090)		(5,427)		(335,517)
Other operating expense			-		-	-				(15,081)		-		(15,081)
Operating loss			(64,042)		(20,374)	(84,416)				(83,136)		(16,316)		(99,452)

Group revenue decreased by 3.6% to £934.0m in the first half (H1 2023: £969.3m). This performance reflects the  result of the Group exiting loss making categories and territories. Revenue generated from the discontinued categories has declined by £36.0m to £22.9m in H1 2024 compared to H1 2023.

Within continuing sales performance the principal drivers were:

-      THG Beauty returning to growth after consciously prioritising higher-margin sales and manufacturing sales returning to normalised levels;

-      Strong improvements in THG Ingenuity external revenues, following the continuation of the strategic repositioning and new contract wins with a particular strength in the provision of fulfilment services;

-      The growth in Beauty and Ingenuity was offset by a reduction in THG Nutrition online revenue. This was driven by stock rotation and higher than anticipated promotional activity linked to rebranding, continuing FX headwinds from Asian currencies, volatility in commodity pricing and the consumer environment remaining uncertain in specific territories.  

Detailed analysis by each of the three businesses is included within the segmental section later in this report.

Gross profit

Adjusted gross profit was £395.7m (H1 2023: £424.2m) equating to an adjusted margin of 42.4% (H1 2023: 43.8%), a reduction of 140bps compared to H1 2023.  In H1 2024 certain fulfilment costs are reported under cost of sales. In H1 2023 these costs were reported under distribution costs. If reported on a like for like basis, the H1 2023 adjusted gross profit would be 42.6%.  

 

Gross profit on a statutory basis totalled £371.4m (H1 2023: £407.4m) delivering a decreased margin of 39.8% (H1 2023: 42.0%). The reduction YoY has been driven by Nutrition rebranding and stock rotation during the rebrand phase, offset by a stronger mix contribution from Beauty and the margin progress made in both Beauty and Ingenuity.

 

Within Nutrition, the challenging top line performance was compounded by higher YoY input costs. Whilst 2023 saw whey pricing stabilise, H1 2024 has seen a dislocation of commodity prices, with disproportionate increases for specific product grades. Recently, a lower grade of Protein - Essential Whey - was launched to broaden the customer proposition and provide alternative input grades.

 

The Japanese Yen has been particularly challenging so far in 2024, peaking at 207Y/£ vs c. 160Y/£ at the same point last year, and 135Y/£ at IPO (a c. 47% devaluation since IPO in September 2020). This has all but eliminated profitability in Myprotein's second largest market and we have had to reduce promotional activity as a result impacting Myprotein's competitiveness within the region.

 

Gross profit has strengthened in THG Beauty through online retail sales growth (principally Lookfantastic, Cult Beauty and Dermstore) as previous actions to prioritise higher margin sales and promotional strategies have come to fruition. Beauty manufacturing has also returned to normalised levels following the adverse impact of one-off destocking throughout 2023 which has not recurred.

 

Ingenuity has benefited from stronger external revenue from new contract wins including Holland and Barrett. The strategic pivot to higher margin, larger enterprise clients and new partnership arrangements delivered in H1 2024 has been a significant factor in revenue growth and achieving economy of scale within the distribution and fulfilment network.

 

Distribution costs

 

Pleasingly, distribution costs on a statutory basis further reduced as a percentage of sales by 320bps compared to H1 2023, culminating in a cost of £121.1m (H1 2023: £156.2m), being 12.9% (H1 2023: 16.1%) of revenue and a YoY decrease of £35.1m. If certain fulfilment related costs classified as cost of sales in H1 2024 were reclassified in H1 2023 adjusted distribution costs would still have reduced to £132.8m and 13.7% of revenue, representing a decrease of £25.3m.

 

The Group has successfully leveraged established relationships across the courier network, working closely with third party providers to optimise operational flexibility, maximise efficiencies and negotiate competitive rates, thus benefiting from economy of scale. Transportation surcharges of £1.1m were taken within adjusting items primarily relating to the conflict in Israel, these are lower than the prior year total surcharges and materially lower than the historic covid equivalent.

 

Adjusted distribution costs of £107.5m (H1 2023: £143.7m) equate to 11.5% (H1 2023: 14.8%) of revenue. This £36.2m improvement was driven by the Group's continued focus on network optimisation and the expanded use of warehouse automation. A second Autostore facility was launched in New Jersey (US) in H1 2023, with associated benefits now embedded.

Administration costs

 

Adjusted administrative costs as a percentage of revenue totalled 25.6% of revenue (H1 2023: 24.1%), with the increase primarily driven by marketing investment with intentional spend focused on long term initiatives to build brand engagement and awareness. In order to drive sustained sales growth and profitability, the Group continues to focus its marketing investment towards more efficient and cost effective channels.

 

Restructuring costs (H1 2024: £3.3m / H1 2023: £1.0m), incurred in H1 2024 relate primarily to headcount reductions, with further actions to be completed during H2 2024 partially as a result of the discontinuation of loss-making categories and territories. The impact of severance costs and wage inflation is expected to be offset by future efficiencies, with the H1 restructuring paying back on a cash basis by the end of the financial year.

 

Administrative costs on a statutory basis totalled £334.7m (H1 2022: £335.5m), including share based payment charges of £8.5m.

 

Adjusted EBITDA and Adjusted EBITDA (continuing)

Reconciliation from Operating loss to Adjusted EBITDA				Six months ended 30 June 2024 £'000	Six months ended 30 June 2023 £'000
Operating loss				(84,416)	(99,452)
Adjustments for:
Amortisation				32,758	35,832
Amortisation of acquired intangibles				24,326	25,503
Depreciation				47,241	45,927
Adjusted items - cash				10,529	5,192
Adjusted items - non-cash loss on disposal of discontinued categories				9,845	11,124
Other operating expense - non-cash loss on disposal freehold assets				-	15,081
Share-based payments				8,490	7,888
Adjusted EBITDA				48,773	47,095
Adjusted EBITDA %				5.2%	4.9%
EBITDA loss from discontinued categories				3,530	4,404
Adjusted EBITDA before discontinued categories				52,303	51,499
Adjusted EBITDA before discontinued categories %				5.7%	5.7%

 

Adjusted EBITDA increased marginally to £48.8m from £47.1m in H1 2023. This represents a margin of 5.2% (H1 2023: 4.9%), an improvement of +30bps, with the margin improvements delivered through the Group's cost-reduction programme and the exit of loss-making categories and territories as well as a strong trading performance in Beauty and Ingenuity, helping to offset the Nutrition D2C sales performance.

 

Positive and decisive management actions continue to support the Group's ability to respond and rally against ongoing macroeconomic challenges, with the impact of previous strategic decisioning being affirmed in the overall performance of THG Beauty and THG Ingenuity. A comprehensive management action plan is in place to address the sales performance in THG Nutrition.

 

Discontinued categories

 

At 31 December 2023, certain loss making categories and territories within THG Beauty and THG Nutrition, were under strategic review. Subsequently, the Board approved the exit of these categories and territories. These operations will be fully exited throughout the course of 2024.

On 24^th June 2024, the Group announced a strategic partnership with the Frasers Group. As part of this arrangement, THG agreed to sell its portfolio of luxury goods websites, including Coggles, to the Frasers Group. The sale completed 11th September 2024, with the results presented as discontinued categories. Associated assets have been impaired to realisable value and shown within adjusted items as at H1 2024. The combined discontinued categories contributed £22.9m (H1 2023: £58.9m) of revenue and an adjusted EBITDA loss of £3.5m (H1 2023: loss of £4.4m).

We note these exits do not meet the criteria under IFRS 5: Discontinued operations, as these categories and territories are not major components of the Group as defined by the accounting standard. However, to provide further information on the ongoing revenue and Adjusted EBITDA of the Group these have been presented separately for H1 2024 and H1 2023 for comparative purposes.

 

Depreciation and amortisation

 

Total depreciation and amortisation costs were £47.2m and £57.1m respectively (H1 2023: £45.9m and £61.3m). Included within amortisation is £24.3m relating to acquired intangibles (H1 2023: £25.5m) reflecting the amortisation of previous purchased intangibles.

Depreciation remained largely consistent reflective of the current asset base, reflective of the material capex expansion programme across 2020 to 2022 now being complete.

 

The Group has invested heavily in the platform over a number of years, with  investment and amortisation during H1 2024 reflective of this.

 

Operating loss

 

Operating loss before adjusted items totals £64.0m (H1 2023: £83.1m). This loss was a result of the ongoing challenging macroeconomic environment combined with the above mentioned factors. The actions taken to exit loss-making categories and territories and a return to consumer spending are expected to reduce this loss position in the medium-term, alongside an improvement in the Nutrition D2C sales performance.

 

The Group incurred an operating loss in the period of £84.4m (H1 2023: £99.5m). This is primarily driven by reducing costs during the first half and partially offset by an increased share-based payment charges of £8.5m (H1 2023: £7.9m). In addition, other operating expense of £15.1m recognised in H1 2023 relating to the non-cash loss on disposal following the sale of non-core freehold assets has not recurred in the current period.

 

Finance costs net of finance income

 

Finance costs net of finance income have remained stable at £33.6m (H1 2023: £33.6m) driven principally by higher interest rates, which have been caused by higher interest rate environment. The  inherent cost increase is offset by a reduction in interest expense following the partial repayment of bank borrowings in H2 2023.

 

Loss before tax and tax rate

 

Reported loss before tax was £118.0m (H1 2023: £133.0m). The effective tax rate is 1.4% (H1 2023: -0.1%), based on a total tax charge of £3.1m (H1 2023: tax charge £0.1m). The effective tax rate differs from the average statutory rate of 25% (2023: 23.5%). This is primarily due to a movement in deferred tax not recognised (-21.1%), and expenses not deductible (-2.1%). The non-deductible expenses principally comprise of the share-based payments charge and non-qualifying depreciation.

 

At 30 June 2024, the total net deferred tax liability is £53.4m (H1 2023: £71.7m). The deferred tax liability in respect of intangible assets recognised on consolidation was £126.8m (H1 2023: £142.4m). The deferred tax asset in respect of tax losses recognised was £39.0m (H1 2023: £51.5m). There were £100.7m of unrecognised deferred tax assets in respect of tax losses at the balance sheet date (H1 2023: £74.4m). This non-recognition has an impact on the income statement tax charge, and this is one of the primary reasons for the effective tax rate being below the statutory rate.

 

Earnings per share

 

Loss per share was (£0.08) per share (H1 2023: £(0.10) per share). 

 

Cashflow

	H1 2024	LTM June 2024		H1 2023	LTM June 2023
	£'000	£'000		£'000	£'000
Adjusted EBITDA	48,773	115,756		47,095	78,890
Working capital movements	(74,380)	34,600		(60,802)	120,043
Tax paid	(1,327)	(5,142)		(1,595)	(4,942)
Adjusted items	(10,458)	(20,216)		(5,282)	(23,060)
Net cash (used)/generated in operating activities	(37,392)	124,998		(20,584)	170,931
Purchase of property, plant and equipment	(16,816)	(34,348)		(28,758)	(76,966)
Purchase of intangible assets	(37,121)	(73,182)		(43,307)	(86,059)
Proceeds from sale of non-core freehold assets	-	3,450		52,000	52,000
Other	(37,122)	(81,198)		(38,084)	(80,517)
Free cash flow[16]	(128,451)	(60,280)		(78,733)	(20,611)
Acquisition of subsidiaries net of cash acquired	-	(17,755)		(2,504)	(8,504)
(Repayments) / proceeds relating to  bank borrowings	-	(26,800)		-	156,000
Net (decrease)/increase in cash and cash equivalents	(128,451)	(104,835)		(81,237)	126,885
Cash and cash equivalents at the beginning of the year	416,162	392,546		473,783	265,661
Cash and cash equivalents at the end of the year	287,711	287,711		392,546	392,546

 

Six-month free cash flow totals an outflow of £128.5m (H1 2023: outflow of £78.7m) and £60.3m for the last twelve months (LTM). LTM free cash outflow, is broadly consistent with the year-end, excluding the one off cash proceeds of £52.0m received in H1 of 2023 from the disposal of non-core freehold assets. Stability has been achieved through strong capex management and working capital measures.

 

The cyclical nature of the business results in a working capital outflow in H1 each year, which reverses in H2.

The working capital outflow in H1 2024 of £74.4m has been adversely impacted from H1 2023 due to higher Beauty volumes with suppliers operating on a shorter payment term than Nutrition suppliers. Inventory has reduced by £21.2m YoY with a two year reduction of £42.9m, albeit this reduction is lower than the prior year as the stock portfolio normalises.

 

Cash outflows relating to financing activities have decreased in H1 2024, following the repayment of borrowings in H2 2023, also reducing the interest expense subsequently payable. Loans and other borrowings at H1 2024 were £640.5m (H1 2023: £671.9m).

 

Total cash adjusting items have increased from £5.2m to £10.5m, primarily relating restructuring costs. These actions will result in future cash savings however.

 

There has been a reduction in the cash spend of £11.9m on the purchase of property, plant and equipment in H1 2024, consistent with strategic decision making. The Ingenuity platform continues to be developed, however intangible related spend of £37.1m is down in H1 2024 by £6.2m compared to H1 2023, reflective of  the previous investment needed to build and maximise the platform capabilities.

 

The Group ended the period with cash and cash equivalents of £287.7m (H1 2023: £392.5m, 31 December 2023: £416.2m) and the RCF remains undrawn, following the extension agreed in H2 2023.

 

Segmental Summary^[17]

Overview

 

H1 2024 £m	THG Beauty	THG Nutrition	THG Ingenuity	Central	Inter-group elimination	Continuing Total	Discontinued categories	30 June 2024 Total
External revenue	531.0	299.9	80.2	-	-	911.1	22.9	934.0
Inter-segment revenue	-	-	225.6	-	(225.6)	-	-	-
Total revenue	531.0	299.9	305.8	-	(225.6)	911.1	22.9	934.0
Adjusted EBITDA	32.6	19.6	11.0	(10.9)	-	52.3	(3.5)	48.8
Adjusted EBITDA margin	6.1%	6.5%	3.6%			5.7%	(15.4%)	5.2%

 

H1 2023 £m	THG Beauty (Restated)	THG Nutrition (Restated)	THG Ingenuity	Central	Inter-group elimination	Continuing Total	Discontinued categories (Restated)	30 June 2023 Total
External revenue	502.5	336.7	71.2	-	-	910.4	58.9	969.3
Inter-segment revenue	-	-	248.8	-	(248.8)	-	-	-
Total revenue	502.5	336.7	320.0	-	(248.8)	910.4	58.9	969.3
Adjusted EBITDA	12.1	46.9	3.4	(10.9)	-	51.5	(4.4)	47.1
Adjusted EBITDA margin	2.4%	13.9%	1.0%	-	-	5.7%	(7.5)%	4.9%

 

THG Beauty [18]

£m			H1 2024	H1 2023 (Restated)	Change %
Revenue			531.0	502.5	+5.7%
Adjusted EBITDA			32.6	12.1	+169.3%
Margin %			6.1%	2.4%	+370bps

 

THG Beauty's return to revenue growth has contributed to margin accretion, following previous investment in acquisitions, strategic reductions in lower-margin sales and exiting loss making categories which have contributed to an 3.7% improvement in adjusted EBITDA margin to 6.1%.  Beauty loyalty programmes and marketing strategy have driven a higher mix of spend through more cost effective channels, with customer retention supporting a stable AOV[19] of £61 per basket for H1 2024 (H1 2023: £62).

The adjusted EBITDA in THG Beauty manufacturing has materially increased compared to H1 2023, following the one-off impact of destocking in the prior year.

 

 THG Nutrition [20]

£m			H1 2024	H1 2023 (Restated)	Change %
Revenue			299.9	336.7	-10.9%
Adjusted EBITDA			19.6	46.9	-58.1%
Margin %			6.5%	13.9%	-740bps

 

Whilst the rebrand has refreshed and engaged the customer base, ASP has been adversely impacted through product availability as a result of stock rotation. Revenue and margins have been further challenged during this phase as the Group have undertaken extended promotional activity in order to clear stock under the old branding whilst new packaging levels normalise.

 

As set out, the volatility in commodity pricing and FX headwinds have had a significant impact on the Nutrition business, with adjusted EBITDA decreasing principally as a result of the challenging top line performance, heavily influenced by the weakness of the Yen. The movement in the exchange rate has adversely impacted EBITDA by c.£5m in H1 2024. Local manufacturing commenced in the half year and will lead to a partial natural hedge moving forwards.

 

Pleasingly our offline business comprising manufacturing, retail and licensing, continues to make progress accounting for c.15% of H1 2024 revenue.

 

THG Ingenuity

 

£m			H1 2024	H1 2023	Change %
External revenue			80.2	71.2	+12.6%
Internal revenue			225.6	248.8	-9.3%
Total revenue			305.8	320.0	-4.4%
Adjusted EBITDA			11.0	3.4	+227.1%
Margin %			3.6%	1.0%	+260bps

 

The investments made across the Ingenuity offering over a number of years, along with strategic re-positioning which commenced in Q3 2022, to focus on higher value and higher margin clients to provide improved quality recurring revenue, has started to crystalise particularly across fulfilment services. As revenue scales and the revenue mix evolves further towards the technology product offering we anticipate margins will further grow. This has been positively demonstrated through services to Holland & Barrett and Frasers Group during H1 2024 demonstrating THG Ingenuity's capability.

Internal revenue of £225.6m (H1 2023: £248.8m) relates to services provided to the wider THG Group including platform fees, customer services, fraud detection services, THG Studios, fulfilment, postage and marketing services. This revenue is eliminated on consolidation. Internal revenue declined due to the Group exiting loss-making categories and territories along with lower sales in THG Nutrition, which in turn has generated lower volumes for THG Ingenuity.

 

Central costs

£m			H1 2024	H1 2023	Change %
EBITDA loss from central costs			(10.9)	(10.9)	-

 

Central costs relate primarily to the PLC Board remuneration, professional services fees, group finance, M&A, risk (insurance) and governance costs that are not recharged to each business as they principally relate to the operations of the PLC holding company. The costs remained consistent to H1 2023 with the Group cost saving initiatives expected to drive benefit in future periods offsetting some aspects of inflation.

Adjusted items

In order to understand the underlying performance of the Group, certain costs included within cost of sales, distribution, administrative and finance costs have been classified as adjusted items.

 

The largest category of cost included within adjusted items are those relating to non-cash loss on discontinued categories of £9.3m (H1 2023: £11.1m).

 

					Six months ended 30 June 2024	Six months ended 30 June 2023
					£'000	£'000
Within Cost of sales
Non-cash loss on disposal of discontinued and the exit of loss making categories			8,896			7,174
			8,896			7,174
Within Distribution costs
Transportation, delivery and fulfilment			1,089			1,228
Commissioning - new facilities			162			1,431
Decommissioning			-			1,056
Restructuring costs			2,401			-
				3,652		3,715
Within Administrative costs
Non-cash loss on disposal of discontinued and the exiting of loss making categories				385		3,950
Non-cash loss on property portfolio restructure				564		-
Acquisitions - restructuring and integration				2,919		454
Other costs following the outcome of strategic review				657		-
Restructuring costs				3,301		1,023
		7,826				5,427
Total adjusted items before tax				20,374		16,316
Tax impact			(2,217)			(1,220)
Total adjusted items				18,157		15,096
Cash adjusting items before tax [21]				10,529		5,192

 

For full details on each category of adjusted item see note 3 to the financial statements.

 

Balance sheet

Cash and cash equivalents and net cash before lease liabilities

 

		30 June 2024	30 June 2023	31 December 2023
		£'000	£'000	£'000
Loans and other borrowings		(640,522)	(671,884)	(650,037)
Lease liabilities		(334,728)	(321,312)	(344,977)
Cash and cash equivalents		287,711	392,546	416,162
Sub-total		(687,539)	(600,650)	(578,852)
Adjustments:
Retranslate debt balance at swap rate where hedged by foreign exchange derivatives		2,265	11,074	15,653
Net debt		(685,274)	(589,576)	(563,199)
Net debt before lease liabilities		(350,546)	(268,264)	(218,222)

 

At H1 24 the Group held £287.7m in cash and cash equivalents, (H1 2023: £392.5m). The €600m Term Loan B matures in December 2026 and the incremental £131m senior-secured facility matures in Q4 2025.

 

In Q1, 2024, the RCF was extended by 17 months to May 2026. The £170 million facility remains undrawn since IPO, and there were no changes to the financial covenants or interest margin beyond the existing maturity date. From December 2024, the facility will be £150 million.

 

The extension affords the Group continued significant financial flexibility during uncertain geo-political times. As at June 2024 the Group had c.£450 million of cash and undrawn facilities providing substantial liquidity.

 

Net debt before lease liabilities and adjusted for the impact of hedging was £350.5m (H1 2023: £268.3m, 31 December 2023: £218.2m).

 

The increase in net debt period-on-period is driven by the reduction in cash and cash equivalents. Cash was strengthened in H1 2023 as a result of one off proceeds of £52m received following the sale of non-core freehold properties which has not recurred in H1 2024. Cash includes £11.2m received from HMRC received on the first working day of H1 24 but considered as free cash flow at 31 December 2023 for presentational purposes. LTM cash flows remain largely stable with year-end adjusting for this and with capital spend reductions.

 

Non-current assets

 

Property, plant and equipment totalled £263.4m (H1 2023: £298.6m, 31 December 2023: £273.2m). Intangible assets totalled £1,185.3m (H1 2023: £1,224.9m, 31 December 2023: £1,207.4m). Whilst the Group continues to grow the asset base consummate to strategic priorities, capital spend has reduced following periods of more significant investment whilst developing the platform capabilities.

 

Going concern

 

The Group remains in a strong cash position with cash and cash equivalents totalling £287.7m (H1 2023: £392.5m).

 

Net debt before lease liabilities totalled £350.5m (H1 2023: £268.3m). At 30 June 2023, the Group had a total of £170m in undrawn facilities.

 

The Group expects to refinance its existing debt facilities largely maturing in December 2026 within the next 12 months.

In making their assessment of going concern, the Directors reviewed financial projections until 30 September 2025 and considered the redemption of the UKEF debt facility shortly thereafter in October 2025.

Stress test scenarios were modelled to take into account severe but plausible impacts of a combination of the principal risks occurring simultaneously, as well as a reverse stress test.

 

In response to the ongoing uncertainty in the macroeconomic market, high inflation and global recessions, Management modelled stress tests across multiple scenarios. These included adjusting for a reduction in revenue across all divisions, impacting both direct to consumer and business to business markets, along with an increase in cost base across key inputs, with the focus being on commodity prices.  The results of stress testing demonstrated that the combination of mitigating actions available including existing cash resources, level of discretionary spend, working capital optimisation and ability to utilise the RCF were sufficient for the Group to withstand such impacts.  A reverse stress test was modelled to identify the point at which liquidity is exhausted. The model would have to see a significant decline in revenue and margins compared with the stress test set out above. Such a scenario, and the sequence of events which could lead to it, is considered to be remote. For these reasons, the Directors continue to adopt the going concern basis in preparing these condensed interim financial statements.

 

Responsibility statement of the directors in respect of the condensed interim financial statements

 

We confirm that to the best of our knowledge:

·      the condensed set of financial statements for the half year ended 30 June 2024 has been prepared in accordance with UK adopted IAS 34 Interim Financial Reporting;

·      the interim management report includes a fair review of the information required by:

o  DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the 2024 financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

o  DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

 

Matthew Moulding                                                                                                             Damian Sanders

Chief Executive Officer                                                                                                       Chief Financial Officer

16 September 2024                                                                                                           16 September 2024

 

 

 

Interim condensed consolidated statement of comprehensive income for the six months ended 30 June 2024

 

		30 June 2024	30 June 2023
	Note	£'000	£'000
Revenue	2	933,969	969,260
Cost of sales		(562,557)	(561,895)
Gross profit		371,412	407,365
Distribution costs		(121,121)	(156,219)
Administrative costs		(334,707)	(335,517)
Other operating expense	6	-	(15,081)
Operating loss		(84,416)	(99,452)
Finance income		5,407	5,476
Finance costs		(39,089)	(39,040)
Loss before taxation		(118,098)	(133,016)
Income tax charge	4	(3,132)	(67)
Loss for the financial period		(121,230)	(133,083)
Other comprehensive expense:
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translating foreign operations, net of tax		6,802	(26,687)
Net (loss) /  gain on cash flow hedges		(3,866)	6,704
Total comprehensive expense for the financial period		(118,294)	(153,066)
Loss per share (£'s)
Basic		(0.08)	(0.10)
Diluted		(0.08)	(0.10)
Earnings before interest, taxation, depreciation, amortisation ,adjusted items, share-based payment charges and other operating expenses - non-cash loss on disposal of freehold assets (Adjusted EBITDA)
		30 June 2024	30 June 2023
	Notes	£'000	£'000
Operating loss		(84,416)	(99,452)
Adjustments for:
Amortisation	6	32,758	35,832
Amortisation of acquired intangibles	6	24,326	25,503
Depreciation	6	47,241	45,927
Adjusted items - cash	3	10,529	5,192
Adjusted items - non-cash	3	9,845	11,124
Other operating expenses -non-cash loss on disposal of freehold assets	6	-	15,081
Share-based payments	5	8,490	7,888
Adjusted EBITDA		48,773	47,095

 

 

Interim condensed consolidated statement of financial position as at 30 June 2024

 

		30 June 2024	30 June 2023	31 December 2023 Audited
	Note	£'000	£'000	£'000
Non-current assets
Intangible assets	6	1,185,284	1,224,914	1,207,383
Property, plant and equipment	6	263,375	298,582	273,171
Right-of-use assets	6	286,786	281,443	303,635
Investments	7	1,400	1,400	1,400
Other non-current financial assets	7	8,413	17,988	7,999
		1,745,258	1,824,327	1,793,588
Current assets
Assets held for sale	6.1	-	1,100	-
Inventories		298,909	328,983	297,143
Trade and other receivables		244,830	267,313	271,782
Other financial assets	7	5,318	5,222	1,915
Cash and cash equivalents	7	287,711	392,546	416,162
		836,768	995,164	987,002
Total assets		2,582,026	2,819,491	2,780,590
Equity
Ordinary shares		7,225	7,072	7,072
Share premium		2,024,824	2,024,824	2,024,824
Merger reserve		615	615	615
Capital redemption reserve		523	523	523
Hedging reserve		(26,548)	(3,771)	(20,020)
Cost of hedging reserve		27,945	20,958	25,283
FX Reserve		22,406	35,172	15,604
Retained earnings		(1,143,800)	(927,221)	(1,032,234)
		913,190	1,158,172	1,021,667
Non-current liabilities
Borrowings	7	608,087	631,789	621,011
Other financial liabilities	7	28,550	-	-
Lease liabilities	7	288,661	275,942	301,440
Provisions	9	19,246	18,087	22,130
Deferred tax		53,405	71,692	55,698
		997,949	997,510	1,000,279
Current liabilities
Contract liability		23,520	25,808	22,864
Trade and other payables		542,800	531,775	638,350
Borrowings	7	32,435	40,095	29,026
Current tax liability		3,224	1,952	1,266
Lease liabilities	7	46,067	45,370	43,537
Other financial liabilities	7	17,121	15,974	19,763
Provisions	9	5,720	2,835	3,838
		670,887	663,809	758,644
Total liabilities		1,668,836	1,661,319	1,758,923
Total equity and liabilities		2,582,026	2,819,491	2,780,590

 

Interim condensed consolidated statement of changes in equity for the six months ended 30 June 2024

 

	Ordinary shares	Share premium		Merger reserve	Capital Redemption reserve		FX reserve		Hedging reserve	Cost of Hedging reserve	Retained earnings	Total equity
	£'000	£'000		£'000	£'000		£'000		£'000	£'000	£'000	£'000
Balance at 1 January 2024	7,072	2,024,824		615	523		15,604		(20,020)	25,283	(1,032,234)	1,021,667
Loss for the period	-	-		-	-		-		-	-	(121,230)	(121,230)
Other comprehensive expense:
Impact of foreign exchange	-	-		-	-		6,802		-	-	-	6,802
Movement on hedging instruments	-	-		-	-		-		(6,528)	2,662	-	(3,866)
Total comprehensive expense for the period	-	-		-	-		6,802		(6,528)	2,662	(121,230)	(118,294)
Issue of ordinary share capital	153	-		-	-		-		-	-	-	153
Share-based payments	-	-		-	-		-		-	-	8,490	8,490
Deferred tax effect in equity	-	-		-	-		-		-	-	1,174	1,174
Balance at 30 June 2024	7,225	2,024,824		615	523		22,406		(26,548)	27,945	(1,143,800)	913,190
Balance at 1 January 2023	6,903	2,024,452		615	523		61,859		(6,221)	16,704	(803,096)	1,301,739
Loss for the period	-	-		-	-		-		-	-	(133,083)	(133,083)
Other comprehensive expense:
Impact of foreign exchange	-	-		-	-		(26,687)		-	-	-	(26,687)
Movement on hedging instruments	-	-		-	-		-		2,450	4,254	-	6,704
Total comprehensive expense for the period	-	-		-	-		(26,687)		2,450	4,254	(133,083)	(153,066)
Issue of ordinary share capital	169	372										541
Deferred tax effect in equity	-	-		-	-		-		-	-	1,070	1,070
Share-based payments	-	-		-	-		-		-	-	7,888	7,888
Balance at 30 June 2023	7,072	2,024,824		615	523		35,172		(3,771)	20,958	(927,221)	1,158,172

Interim condensed consolidated statement of cash flows for the six months ended 30 June 2024