Investing.com -- THG PLC's (LON:THG) fourth-quarter 2024 trading statement reported a sales decline following the completion of its Ingenuity demerger on January 2, sending its shares down over 6%, on Thursday.
This demerger marks a shift for THG, focusing solely on its beauty and nutrition brands. This aligns with broader efforts to streamline operations and improve core business focus.
For the full year 2024, THG’s group revenue fell by 7.1% year-on-year to £1.94 billion, while revenue from continuing operations, which excludes discontinued categories, was down 2.6% to £1.88 billion.
The decline reflects challenges within its nutrition segment, which saw a 12.7% year-on-year drop in Q4 2024 sales.
Beauty sales remained relatively steady, supported by a strong performance in retail and own-brand operations, offsetting some of the decline in other areas.
THG Ingenuity, now demerged, posted a 22.9% year-on-year revenue increase in Q4 2024, underlining its standalone growth potential.
The Ingenuity demerger supports THG's strategy to streamline operations and focus resources on its core Beauty and Nutrition businesses. This strategy aims for mid-single-digit revenue growth in 2025.
However, THG acknowledges challenges such as high commodity prices and foreign exchange fluctuations, particularly impacting the Nutrition segment.
“With some product withdrawals within Beauty and Nutrition pressure in Asia, FY24 came in below expectations but the outlook is more promising within both segments particularly following the demerger. With the demerger complete we reinstate our rating at EW,” said analysts at Barclays (LON:BARC) in a note.