THG has said profit margins for 2021 will miss analysts’ forecasts but the UK ecommerce group expects them to recover this year.
Margins before interest, tax, depreciation and amortisation will be 7.4 to 7.7 per cent against market expectations of around 7.9 per cent, largely because of exchange-rate variations, the Manchester-based group said on Tuesday.
It added that margins should improve throughout 2022 as investment in automation and new client wins offset inflationary pressure, though this will be weighted towards the second half of the year.
THG shares tumbled at the end of 2021 as investors questioned the prospects for its Ingenuity division and criticised the group’s disclosure. The shares have shed more than 75 per cent of their value over the past 12 months.
The group responded by pledging to appoint an independent chair and to scrap a “special share” structure that gives co-founder and chief executive Matthew Moulding the power to veto hostile takeovers.
Fourth-quarter sales at the group were £711m, up 27 per cent on last year, though this was boosted by acquisitions. Revenue at Ingenuity, the ecommerce technology business that has been the subject of market interest over the past year, rose 41 per cent.
Moulding said in Tuesday’s statement that the new year had started well and the group remained confident.
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